Global Policy Forum

Gerard Doornbos and Kees Blokland

To bring prosperity to developing countries, nongovernmental organizations are pressing for a reduction of export subsidies in developed countries and increased access for developing countries to the European market. Claiming to represent civil society, they also advocate reduction of agricultural subsidies in the rich countries as the solution for poverty and sustainable agriculture in the developing world.

But it is mistaken to think that development problems can be solved in this way. And why do NGOs address only agriculture? We advocate addressing problems within the developing countries and building strong producer organizations. And the dominant position of multinational companies in world markets needs attention.

Poverty and hunger are the two major issues on the international agenda. Hunger kills eight times as many people every day as died in the attacks of Sept. 11. Today 24,000 people will die from hunger; it will be the same tomorrow. Trade liberalization has a contribution to make in the effort to solve these problems. Europe has already granted very substantive access to its markets to developing countries. It now is the world's largest importer of farm products from developing countries. It imports more farm products from the least developed countries than all other OECD countries combined.

In addition, Europe has made the effort to reduce export subsidies by 36 percent, and this has led to a reduction of exports. But will reducing subsidies in Europe help the poor people in developing countries? Jamaica, for example, imports subsidized milk from Europe. Cutting the subsidy induces it simply to switch to importing unsubsidized milk from Australia or New Zealand, since this is cheaper than locally produced milk.

What is needed to help local farmers is a change in policies in the developing countries themselves.

Market access opportunities in Europe for developing countries have improved dramatically in the last decade. With the signing of the "everything but arms" initiative, the least developed countries will have full market access to the European Union after 2008.

A change in the European sugar regime would harm farmers in the 18 ACP countries, the former European colonies, which receive the same guaranteed price for sugar as their colleagues in the EU. Multinational trading companies, owners of the large sugar estates and sugar plants in certain countries, would surely benefit from a change of regime, but not small farmers or farm laborers.

When we take steps that affect our economy, we should be careful that benefits actually accrue to the groups and persons who are suffering from poverty and hunger.

Policy reform in developing countries and stronger focus on more trade between developing countries would contribute enormously to reducing poverty. Maurice Schiff and Alberto Valdez, of the World Bank's trade unit, found that farmers in developing countries could have earned 43 percent more income from 1960 to 1985 had their governments not plundered agriculture, imposing indirect and direct taxes through exchange rate manipulation and turning the terms of trade against agriculture. And developing countries have only used 70 percent of the possibilities of the trade arrangements that they have with Europe.

Access to land, water, capital and genetic resources is essential. Economic freedom and a legal system that guarantees democratic rights are of the highest importance. Freedom for farmers to associate in organizations for advocacy and business is a basic requirement for achieving democracy and economic development.

Trade liberalization is not an end in itself, but it has a contribution to make to increasing developing countries' wealth and the eradication of hunger.

NGOs keep on attacking agricultural support in the developed world, but they are neglecting the most important targets. They neglect the very important benefits that can be gained when import restrictions of OECD countries are lifted on processed foods derived from products produced in developing countries, such as coffee, cocoa or cotton.

The Dutch government calculated that the proposed liberalization of services and manufacture would contribute 22 times as much as liberalization of agricultural trade to developing countries. We do not advocate new protection or even abolishing the liberalization track. We just argue that other sectors should also contribute.

European farm policy is an easy target, but NGOs should address the market distortions caused by industrial concentration in the agro-food chain, where multinational companies have gained a far too dominant position.

Liberalization of trade should focus on making markets work for the poor, including guaranteeing international competition and combating monopolies.

Gerard Doornbos is president LTO Nederland, a Dutch farmers' organization, and a past president of IFAP, the International Federation of Agricultural Producers. Kees Blokland is managing director of Agriterra, which promotes cooperation between rural people in the Netherlands and in developing countries. They contributed this comment to the International Herald Tribune.

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