Civil society expresses shock at draft agriculture text

Published in SUNS #8159 dated 18 December 2015

Nairobi, 17 Dec (Ranja Sengupta) – Civil society representatives present at the WTO Ministerial Conference (MC10) have expressed deep shock and disappointment over a draft text on Agriculture released in the early hours of the morning here on the third day of the Conference.

The text was circulated by the Ministerial Facilitator on Agriculture (Lesotho) together with the Chair of the Committee on Agriculture in Special Session (Ambassador Vangelis Vitalis of New Zealand).

Civil society representatives, present at the Ministerial, expressed deep shock and disappointment over the text released today. The text has yielded nothing on the demands of developing countries, most civil society groups here felt.

Expressing deep disappointment over the text, Timothy Wise, Tufts University, USA, said, “The draft text on agriculture is a serious disappointment. It offers no progress on key deliverables demanded by developing countries – public stockholding and special safeguard for import surges – fails to even mention new disciplines on domestic subsidies, and in its one deliverable on export competition, the small progress on export subsidies is diluted by weak language on export credits and food aid, the two main instruments used by the US government to promote its exports. This text utterly fails to advance the development agenda.”

Deborah James, on behalf of Our World is Not for Sale (OWINFS), a global network of NGOs and social movements (www.ourworldisnotforsale.org), said “the agriculture text shows that all civil society concerns voiced over the years and specific concerns expressed by developing countries in the lead up to this Ministerial have been ignored”.

Yash Tandon, President, SEATINI, Uganda, said “the draft text of Agriculture is certainly not one of the desirable ‘deliverables’ from MC10”.

The section on public stockholding has nothing on the permanent solution except to say, “negotiations … shall continue to be pursued as a priority in the Committee on Agriculture in Special Session, in dedicated sessions and in an accelerated time-frame”.

Those have been continuing for two years now in Special Sessions of the Committee on Agriculture, but any discussion on the two proposals submitted by the G-33 have been blocked by the developed countries.

Today’s draft text simply reaffirms “the commitment of WTO Members to agree and adopt a permanent solution on the issue of public stockholding for food security purposes by the 11th Ministerial Conference” and confirms that the “interim mechanism as set out in the Bali Ministerial Decision on Public Stockholding for Food Security Purposes, and the General Council Decision of 28 November 2014, shall remain in force until a permanent solution on the issue of public stockholding for food security purposes is agreed and adopted”.

There is nothing for developing countries on special agricultural safeguards either. The draft text simply says: “work on a Special Safeguard Mechanism for developing Members shall be pursued taking account of proposals by Members and in the broader context of agricultural market access”.

The Text stands stoic in refusing to grant any immediate safeguard mechanism to developing countries against import surges, which has been a longstanding demand of developing countries.

The G-33 had in fact watered down its proposals before the Ministerial, and had proposed the SSG which is already used by 39 Members mainly consisting of developed countries, but with special and differential treatment, especially in the form of using the last 3 years’ average prices instead of 1986-88 prices. But even that has not been conceded in this text.

Moreover, by linking the safeguard instrument specifically to market access talks, the text refuses to recognize the developing country argument that, even in the absence of progress on market access, such an SSG is justified because of the high trade-distorting subsidies provided by the developed countries to their farming sectors.

“It is clear from the new text on agriculture that developing countries are getting nowhere in these negotiations. In particular, there is no forward movement on a permanent solution for food security proposal for public stockholding even after two years of negotiations since the Bali Ministerial. The special safeguard for agriculture has also not seen any progress even after several step-down in G-33 proposals. The developing countries should reject this proposal in no uncertain terms,” said Biraj Patnaik, from the Right to Food Campaign India.

EXPORT COMPETITION

Export competition is claimed as the pillar that has something to offer comprising export subsidies, export finance, State Trading Enterprises and food aid.

Export competition discussions have been going on for some time and after the Hong Kong Ministerial there was an agreement to eliminate export subsidies by 2013.

Since then 2020 has been discussed as the target year for elimination of export subsidies and 2023 being the year for developing exporting countries. The current text proposes the elimination of export subsidies of developed countries by 2020 and those of developing countries by 2023.

While it is important to get this commitment, the declining share of export subsidies makes this far from the “big deliverable” the developed countries have made it out to be.

The other components of export competition have been more complex and problematic with the US wielding substantial influence over the talks. Export credit discussions in particular have already witnessed huge blocks by the US.

Timothy Wise argues, “It is inexcusable that the US government is using the current negotiations to legitimize its current levels of export credits, which are large and extremely trade-distorting. Over the last six years they have amounted to several billion dollars, with $1.25 billion going to African countries. This is equivalent to an export subsidy of $100 million, a large distortion that favours US exports over African domestic products and over the exports of other countries.”

There are several concessions to the US in the text. For example, the current draft text allows the US to give credit for 18 months instead of the 6 months that was allowed in the Rev.4 text.

A civil society expert also argued that there was a carve-out based on special and differential treatment (SDT) for developing countries for export subsidies related to marketing and transport in Article 9.4 in the Agreement on Agriculture (AoA).

But according to the text released today, this carve-out will be terminated in 2028 or 2030, which reflects again a pushback on SDT in this Ministerial.

Sophia Murphy of the Institute for Agriculture and Trade Policy (IATP), said: “The draft agriculture text puts the US in its favourite position: win-win. There is no reform in the draft proposed language on export credits. By allowing an exception to time limits for not just the poorest countries but also any net food importing developing country (which includes Egypt and Kenya) the loophole covers all major recipients of export credits. WTO members have no interest in making concessions for what is already common practice. The proposed text gives the US what it wants from the EU on export subsidies, which the US hardly uses and which it has long wanted to eliminate. And it has made no commitment to reform its own export support, which remains all but untouched in the draft text now before the governments.”

The civil society here has expressed deep concerns on the Food Aid segment, where the text remains weak. This is one area where developing countries and civil society in general had wanted binding disciplines as residual food aid is creating distortions in domestic food markets across the world undercutting farmers’ prices and incomes.

The current text only has best endeavour provisions, still allows monetization and is weak on local procurement.

Sophia Murphy, from IATP, said: “The draft text on food aid is a disgrace. It’s a big step back from the reforms included in the draft WTO texts seven years ago (Rev.4) and is less than most of the US development community are asking for. In a letter sent to USTR Froman last week (http://www.iatp.org/documents/letter-to-the-ustr-on-global-food-security ), NGOs called on the US to end the monetization of food aid, in recognition of both its trade-distorting effects and because it undermines markets for the rural economies the aid is intended to support. The US position demonstrates how little the government wants to see a successful outcome to the Ministerial.”

Prerna Bomzan, speaking on behalf of LDC Watch, a civil society organization that works for 53 LDCs, said: “The Chair’s text on food aid is very weak and even regressive since it does not contain a ‘safe box’ i.e. distinction between emergency and non-emergency food aid, as mandated in the 2005 Hong Kong Ministerial Declaration. It legalises dumping by labelling food exports as food aid. This is a key concern for us since Sub- Saharan Africa, home to the majority 34 LDCs, accounts for around 60-65% of food aid flows and hence, it is imperative that we anchor stronger disciplines on food aid in Nairobi”.

“African farmers will be undermined if the draft agriculture text stands during the WTO negotiations today. If the final text does not distinguish emergency aid from food aid more broadly it will create an enabling environment for dumping cheap food into local markets, undermining local farmers,” said Marie Clarke, Executive Director of ActionAid USA.

The Agriculture text will be discussed with Members today, reports said. The aim of the Text “is to assist Ministers to find common ground, and in keeping with this aim they should be considered to expire at the end of the Tenth Ministerial Conference”. In its current form, it is unlikely to be able to do that.