THE 1996 WORLD food summit defined food security as ‘ Food security at the individual, household, national, regional and global level is achieved when all people, at all times, have physical and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life.’

However, the current system of multilateral rules, which was agreed by consensus, are a major threat to food security as this was basically designed by the elite, powerful states of the north primarily to promote their interests at the expense of poor states of the south. WTO and its agreement on agriculture (AoA) is perceived as a major debacle for the agricultural economy of developing countries. The AoA has promoted an industrial model of agriculture that has jeopardised food security in developing countries.

The agreement has legitimised the use of subsidies in western countries (WCs), while narrowing the options available to developing countries (DCs), which are competing in an increasingly global market. The result is the worst of both worlds. Food security, and the potential of agriculture as an engine of growth for the South, has been undermined. The global food chain is increasingly distorted by the disparities in power between global agribusinesses, on one hand, and farmers and consumers on the other. This is driving the liberalisation of agriculture and the food trade in directions inimical to the public interest. Many DCs have unilaterally liberalised their trade regimes (often as part of structural adjustment programmes), in reforms they are prevented from reversing by the WTO. There has been no reciprocal liberalisation in the north.

As it has been pointed out earlier, agricultural liberalization is the basic issue for developing countries as this is the only sector where DCs have some level of control and self-sufficiency. In addition to this, there are various factors that also enhance the importance of agriculture for DCs , it is their main source of livelihood. It employs over 70 per cent of the labour force in the DCs, 30 per cent in the middle-income countries and only four per cent in high-income countries. Agriculture is the main contributor of GDP in DCs. Between 1990- and 1996, the contribution of agriculture as a proportion of GDP was an average of 34 per cent for low-income countries as compared to eight per cent of upper middle-income countries, and 1.5 per cent for the high-income countries of the OECD. It is the most important source of foreign exchange for DCs, accounting for 27.3 per cent for developing countries and 34 per cent for the least developed countries. In contrast, agriculture accounted for only 8.3 per cent of developed countries’ exports. Despite knowing the importance of agriculture for DCs, developed countries are not considerate towards their genuine demands. One of the major issues that is perturbing DCs, is the double standard of the WC. Under the pressure of international financial institutions and their policies of Structural Adjustment DCs have started liberalizing their agriculture.The support and safety-net that they provided to their farmers in the past, is gradually declining. In contrast developed countries are constantly providing safety nets to their farmers, this protectionism and biased attitude of the developed countries has come under criticisms of DCs.

To understand the discriminatory functioning of the AoA in favour of WCs, it would be beneficial to understand the main concepts of this agreement. There are several boxes and provisions that are made for the working of the AoA. Red Box outlaws the non-tariff measures, as the measures have to be replaced by tariffs in the process known as traiffication. The Amber Box entails that the payment and subsidies paid to the producers are to be reduced but not yet eliminated. These measures are based on aggregate measures of support (AMS), which is cash equivalent of total government support for agriculture producers. The Blue Box allows countries unlimited spending for direct payment to farms as long as these are linked to production-limiting programmes based on fixed areas or yield.

The irony is that production-limiting provision is available in the AoA, however production increasing support by the government to farmers is not available, which is needed by developing countries. In the Amber Box domestic spending is restricted but in the green one, domestic spending can be made in the name environmental programmes, pest and disease control, infrastructure development and food aid. There is also a peace clause; it prohibits countries from protecting their markets against exporters who subsidise their agriculture within parameter set by the AoA.

It will expire in 2003 and it is the only provision that puts pressure on EU which relies heavily on export subsidies. Another provision of special safeguards (SSG) was meant to safeguard the interests of DCs but WCs are the ones, which benefit from it. It specifies that countries that have converted non-tariff measures into tariffs for each crop would reserve the right to apply safeguard tariffs to protect against sudden import surges or falls in world prices for a limited time, to protect their domestic industry. This is beneficial for the WCs due to the fact that only 21 DCs have access to this provision, the rest having opted for the provision to declare general ceilings for tariffs across all their imports, the choice that precluded them from using SSG measures. These are the mains of AoA, and if one critically analyses these provisions, it is quite evident that they serve the interests of WCs more than DCs. Under the AOA, developed countries are gaining, as these countries do not have to undergo the IMF-sponsored the vicious structural adjustment programme (SAP). For instance, the EU would be able to protect its agriculture. And developing countries, which have been already liberalised under the SAP, have limited access to the market. Ironically, the most flexible part in AoA is the spending level and it is the area where developing countries are powerless. They are usually short of money and the money which they have, is spent on debt repayment.

The AoA works in favour of WCs judged by the fact that WCs, applied average tariff on main agriculture products (is at least twice the level applied by DCs (approximately 40 per cent against 20 per cent). Industrialised countries have the de facto, monopoly of the SSG (which was only open to countries having tarified their import protections. Amber box also solely works for the benefit of WCs as only 10 per cent of DCs have shown positive AMS due to the lack of finance.

Moreover, the countries that have positive AMS have notified it in domestic currencies.With much higher inflation rates as compared to WCs due to the structural reasons, they find it difficult to keep the prices according to the current specific AMSs. Another provision that is said to be for the benefit of DCs is the general level of government spending on agriculture. For developing countries the minimum ceiling is of 10 per cent of AMS and for developed countries it is 5 per cent of AMS, though DCs do not have budgetary resources to grant them.

Furthermore, WCs also do not permit any provision that helps the poor countries of the south to be incorporated in AoA. The one instance is the decision taken at Marrakech ministerial conference that was supposed to protect the net food importing developing countries (NFIDCs) from the price spikes by caused the AoA. In the event, however, prices rose but developed countries members refused to implement the decision.

Another issue for developing countries is the violation of the AOA, though it was made particularly to fulfil their interests. Thus, according to Organisation for Economic Cooperation and Development the ‘producer support equivalent’ (PSE) remains high. Moreover, the AoA objective of reducing domestic support to agriculture has not been realised. In the US in 2000, domestic spending on agriculture climbed to $28 billion, not including food aid. The OECD estimates that farmers in Japan, the EU and the US receive an average of US$20,000 per year in domestic support. . In DCs on the other hand, unilateral cuts in the import tariff have further reduced government revenues, making it even harder for them to support poor farmers. The WCs are evidently violating the rules of WTO and as the world price for agriculture declined, the EU and the US provided increasing subsidies to their farmers. The EU accounts for 90 per cent of export subsidies as calculated under the WTO rules.

Thus the US, like the EU, continues to sell many of its crops at less than the cost of production, both domestically and abroad. This scenario is quite deplorable, as on the one hand WCs are arguing for reduction in tariff as DCs were getting revenue from tariff and that revenue could be used to provide cushion to the local farmers in case of any crisis and on the other, developed counties are strengthening their agriculture industry and providing safeguards to their farmers at the expense of the poor farmers of DCs.