Farm trade at Rio+20: Towards "the future we want"?

18 June 2012

"Climate change is already happening," an African farmer told me at a recent global agriculture meeting. "In Ghana, the timing of the rainy season is becoming more and more unpredictable." Another cautioned that poverty and hunger were likely to remain problems in his country as long as farmers remained marginalised and voiceless - cut off from markets as well as decision-makers in government.

These challenges - food security, poverty and threats to the natural environment - are among a myriad of issues on which government negotiators are frantically trying to reach agreement ahead of the Rio+20 summit on sustainable development. Trade, and trade policy, also figure amongst the topics they are trying to address and have the potential to unlock progress in other areas.

If governments in poor countries can increase support to agriculture without distorting trade, that could help provide a much-needed boost to farm productivity at a time when urbanisation, rising average incomes in developing countries, evolving dietary patterns and demographic changes are widely expected to create new patterns of supply and demand. Increasing spending in areas such as extension and advisory services, or research on pests and diseases, could help tackle low yields on small farms in the developing world. This, in turn, could help to overcome food insecurity in rural areas, and go some way toward meeting rising demand for food without further eroding land and water resources, or clearing forests.

At the same time, if developed countries were to reform policies such as biofuel blending mandates, subsidies for products such as cotton, or high tariff peaks on rice and sugar, competitive producers in poorer countries could stand to gain. In recent years, the food price spikes that have been blamed for pushing millions more people into poverty and hunger have also refocused attention on the role of export restrictions in exacerbating shortages for products such as rice and wheat. Subsidies in wealthy countries that contribute toward unsustainable patterns of production and consumption, including in the livestock sector, have also come under the spotlight as climate change climbs up the political agenda.

There is little chance that Rio will deliver anything specific in any of these areas. However, it might yet sketch out some of the broader connections between trade and sustainable development that could provide a framework for subsequent action. At the very least, the gathering is due to renew political commitment to sustainable development, and, most probably, take the initial steps needed to help establish a set of "sustainable development goals," which are widely expected to complement the existing millennium development goals or MDGs.

Preparatory talks have reportedly been marred by rifts over the concept of a "green economy" - which developing countries have argued must be seen in the broader context of sustainable development and poverty eradication - and over the institutional framework for achieving progress in the years ahead. Important though they may be, the nuanced diplomatic controversies risk obscuring the real connections between social, environmental and economic problems in the world today.

In the eighty-page draft declaration that diplomats are currently poring over, trade is classed alongside finance and technology as a "means of implementation;" in other words, trade is a tool to help governments achieve sustainable development, rather than an end in itself.

The clauses on subsidies are perhaps the most controversial of those in the trade section, mainly because of the implications for government support to fossil fuel producers. However, the language in this part of the text would also have implications for trade-distorting farm subsidies - another topic on which governments have sharply divergent views.

An end-May draft from the co-chairs of the negotiating process would have governments "commit to take action, where appropriate, to phase out subsidies that are market distorting and inhibit sustainable development, taking into account the specific conditions and different levels of development of individual countries."

According to a more recent text, dated 2 June, Australia and New Zealand have proposed deleting the ubiquitous "where appropriate" from this clause, while Canada, Japan and Norway have suggested that governments agree to "get substantial reductions of" these subsidies instead of phasing them out. The EU has instead proposed that countries "gradually eliminate environmentally harmful subsidies that are incompatible with sustainable development," while the G-77 developing country group appears to prefer the original text proposed by the co-chairs.

Talks in the WTO's Doha Round, aimed at achieving "substantial reductions in domestic support" in agriculture - amongst other things - have reached an impasse. However, the Rio outcome could still inform domestic discussions over farm policy directions, such as those on the EU's Common Agricultural Policy, the US Farm Bill, or over farm support in China and India. The latter has increased substantially in recent years, although almost all has been reported to the WTO as "green box" support, which causes only minimal trade distortion.

A separate section of the draft on sustainable agriculture, food security, and nutrition also looks at the role of trade. The text reaffirms the value of a "universal, rules-based, open, non-discriminatory and equitable multilateral trading system," and encourages governments to eliminate "barriers and policies that distort production and trade and lead to negative environmental outcomes." It also invites them to promote policies that enhance trade in agricultural products as a contribution to sustainable agriculture and food security, and to note that, while obstacles to trade can have "a serious impact" on the world's poor, trade opportunities can also help small-scale and marginalised producers in developing countries.

Amongst the general sentiments on the potential benefits of trade and the importance of reducing poverty, there is little here that governments can be expected to disagree on. At the same time, while it is unclear how these precepts could translate into practical action in more controversial areas, we might well be wrong to assume that Rio will deliver nothing of importance to African farmers or others who are disadvantaged by today's agricultural trading system.

Agreement at Rio on how farm trade could contribute to broader sustainable development goals could be a valuable stepping stone towards progress in other areas - especially following stalemates in recent years in high-profile negotiations on topics ranging from climate change to trade. To provide a meaningful basis for doing so, however, the summit declaration will have to respond adequately to both the urgency and gravity of the challenges facing people in countries around the world.

Jonathan Hepburn
Programme Manager for Agriculture, International Centre for Trade and Sustainable Development (ICTSD)

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