The global food system places enormous pressures on the planet’s ecosystems while failing to meet the nutritional needs of large segments of the world’s population. Fossil fuel–based industrial agriculture is one of the major sources of anthropogenic greenhouse gas emissions and has increased the vulnerability of the world’s food supply to catastrophic crop failure by significantly decreasing its genetic diversity.
In the regulation of global agricultural trade, international trade law has taken precedence over human rights and environmental protection. The Agreement on Agriculture (AoA, 1995) has had a particularly profound impact. The AoA seeks to liberalize trade in agricultural products by requiring World Trade Organization (WTO) members to eliminate quantitative restrictions, lower tariff barriers, and reduce trade-distorting agricultural subsidies. To truly understand the impacts of the AoA, it is essential to place it in historic perspective.
The rise of industrialized agriculture. In the aftermath of World War II, the United States and the European Union (EU) subsidized the domestic agricultural sector, imposed significant tariffs on agricultural imports, and encouraged the rapid transition from small, self-sufficient farms to large-scale industrial agriculture in order to maximize food production.
Beginning in the 1950s, the Green Revolution transplanted industrial agriculture to the developing world and revealed the limits of technology-based solutions to chronic malnutrition. The Green Revolution sought to combat world hunger by encouraging farmers in developing countries to cultivate new varieties of rice, wheat, and corn that produced high yields in response to fertilizers, pesticides, and irrigation. While the Green Revolution was successful from the standpoint of food production, it intensified rural poverty and produced serious environmental harm. Wealthy farmers benefited, but most poor farmers could not afford the agrochemicals and irrigation systems needed to produce high yields. As global agricultural production increased, food prices plummeted, destroying the livelihoods of small farmers in developing countries, causing many to abandon farming and exacerbating poverty and inequality.
The industrialization of agricultural production in both developed and developing countries also produced serious environmental harm, including loss of agrobiodiversity, deforestation, soil degradation, and agrochemical contamination of water resources. Farmers became increasingly dependent on costly seeds, fertilizers, and pesticides manufactured by transnational corporations.
Structural adjustment. The debt crisis of the 1980s inaugurated a series of free market economic reforms in developing countries (known as structural adjustment programs) that placed small farmers in ruinous competition with subsidized agricultural producers in the United States and the EU. As a condition for new loans, the International Monetary Fund (IMF) and the World Bank required debtor nations to open their markets to foreign competition by reducing tariffs, removing non-tariff barriers, and drastically curtailing subsidies, social safety nets, and other forms of assistance to local farmers. As a consequence of these reforms, cheap agricultural imports from the United States and the EU flooded developing country markets—devastating rural livelihoods, depressing domestic food production, and accelerating rural-to-urban migration. Within a few decades, developing countries that were once net exporters of food became net importers.
The structural adjustment programs imposed by the IMF and the World Bank also required developing countries to shift land and resources from food crops to cash crops to boost export revenues and service foreign debt. This reduced domestic food production, reinforced dependence on food imports, accelerated deforestation, and hastened the transition from peasant-based farming to industrial agriculture.
Continued disparities. The AoA sought to address some of the imbalances in global agricultural trade by requiring WTO members to enhance market access and reduce trade-distorting agricultural subsidies. First, parties were required to convert non-tariff barriers to tariffs and to reduce these tariffs over time. Unfortunately, the method of converting non-tariff barriers to tariffs was not clearly specified. The majority of industrialized countries engaged in “dirty tariffication”—adopting tariffs that were more trade-restrictive than the non-tariff barriers that they replaced. In addition, many industrialized countries maintained extremely high tariffs on processed agricultural products, which made it difficult for developing countries to diversify into the lucrative food processing industry. Second, parties were required to reduce export subsidies and trade-distorting domestic subsidies (in relation to a base period of extremely high subsidies) and were prohibited from introducing new forms of support (beyond de minimis levels) if they had not historically subsidized agricultural production. This approach essentially “grandfathered” the agriculture subsidies of the United States and the EU while restricting the ability of most developing countries to subsidize the agricultural sector for the first time.
The AoA failed to reduce agricultural protectionism in the United States and the EU but succeeded in constraining the ability of developing countries to raise tariffs when confronted with surges of cheap, subsidized agricultural products. Although the AoA did not create the inequities in global agricultural trade that perpetuate poverty and environmental degradation, the AoA did institutionalize these inequities by reinforcing the double standards introduced under structural adjustment that permit protectionism in wealthy countries while prescribing market openness in poor countries.
The redirection of food production toward foreign markets rather than domestic markets has increased the market power of the multinational grain traders, agrochemical corporations, seed manufacturers, and supermarket chains that dominate the global food system. These transnational corporaztions utilize their market power to extract high prices for agricultural inputs while paying low prices for agricultural commodities—to the detriment of small farmers who generally receive only a small fraction of the final retail price of their products. These transnational enterprises also exacerbate climate change by fostering long production chains that require road, sea, and air transportation of food products across vast distances. They have also been the key beneficiaries and main proponents of agricultural subsidies.
Finally, the biofuels boom and financial speculation in agricultural commodity markets threaten food security by increasing food prices. The decision of the United States and the EU to subsidize the production of biofuels to promote energy security and mitigate climate change was the primary driver of the global food price surges of 2006–2008 that sparked worldwide social unrest, particularly in countries that had become net food importers as a consequence of structural adjustment.
In sum, the AoA promised to increase the income of small farmers and developing countries by encouraging developing countries to export cash crops and open their markets to cheap, imported food. Far from promoting prosperity, these policies place small farmers in direct competition with highly subsidized transnational agribusiness. They exacerbate poverty and food insecurity by increasing the vulnerability of poor farmers and net-food-importing developing countries to global food price shocks, and they accelerate the destruction of local food systems.
The need for change. The converging food, climate, and agrobiodiversity crises have made it imperative to transform the global food system. Removing agriculture from the WTO is the necessary first step. The more challenging step is devising a system of global governance that overcomes the fragmentation of international law, scales back the power of corporate agribusiness, invites the participation of civil society, and promotes sustainable approaches to food production, distribution, and consumption.
ABA Environment, Energy and Resources Section
This article is an abridged and edited version of one that originally appeared on page 7 of Natural Resources & Environment, Winter 2012 (26:3).
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