Programme of the Session PDF version of the summary
SUMMARY of the IFAP session on agriculture
WTO Public Forum, Geneva 26 September 2006
“Outstanding Issues in Agriculture and Impacts on Farm Policies”

 

Abstract: Organised by the International Federation of Agricultural Producers (IFAP) this session brought together leaders from national farmers’ organisations throughout the world with ambassadors from the main negotiating groups: Australia, Brazil, European Communities, India, Japan and the USA. The objective was to explore the issues that have yet to be resolved in the WTO negotiations on agriculture, and how these impact on present farm policies and farmers in different regions.

 

In front of 270 participants, each of the six WTO Ambassadors (from G-6 countries) presented their views on “the one main outstanding issue of particular concern to them in getting to a result in the negotiations”. Five farmer leaders, from different regions, were invited to react to the interventions of the panel of negotiators. Questions and discussion from the floor followed.  The closing remarks were delivered by the Chairman of the Negotiating Sessions of the WTO Agricultural Committee, Ambassador Crawford Falconer.

 

For farmers, even though the WTO negotiations are currently suspended, it is important to continue the dialogue on agriculture between negotiators and farmer leaders so that when negotiations resume there can be real benefits for producers in the final agreement. Farmers want to take the opportunity of the pause in the negotiations to make sure that the final agreement delivers fair prices for their products and a system that make sure this goal is achieved.  “We are here today to remind decision-makers that there will be no good agreement on agriculture without improving farmers’ incomes”, said the IFAP President Jack Wilkinson when he opened the meeting.

 

Summary of the main points raised by each panellist:

1. Australia (Cairns Group) – WTO Ambassador Bruce GOSPER: He focused on the importance of market access.  Ambassador Gosper said that even though the market access offer on the table compares well with what was achieved in the Uruguay Round, there is still a “lot of water in the tariffs”. Tariff cuts in agriculture need to be in the 60-80 per cent range in order to get more trade flowing, he said.  The Cairns Group continues to see tariff quotas as a transitional mechanism that will disappear in future negotiations, once tariffs adjust to a level at which normal trade will flow.  The ambassador felt that the approach of these negotiations is capable of delivering the long term objective of many members, which is a fundamental reform of agricultural market access.  He stressed that negotiations that only ends export subsidies and gives a substantial reduction in domestic support will not deliver a fundamental reform unless they are accompanied by real substantial improvement to market access.

 

2. Brazil (G-20) – Deputy Permanent Representative Paulo MESQUITA: He focused on the importance of domestic support.  He recalled that the long term objective is the establishment of a market oriented system for agricultural trade. What did that mean?  In the case of market access, that tariffs have to come down, but there is no agreed principal that they have to come down to zero.  However, trade-distorting subsidies have to come to zero at one point.  Such subsidies depress prices and stimulate production.  He insisted that there is a strong case in political and economic terms, even in moral terms, to bring trade distorting support drastically down, with the view to eventual elimination (not in this Round) so that we have a situation in agricultural trade that is comparable to that in industrial trade. At the same time, he said that there should be no compensation for reducing trade distorting support in terms of granting increased market access. 

 

3. European Communities – WTO Ambassador Carlo TROJAN: If he was forced to choose just one issue to focus on it would be “geographical indications”, said Ambassador Trojan, but he will not.  The reason why the negotiations broke down in July was lack of agreement on “the exchange rate” between the three pillars: domestic support, market access, and export subsidies, as well as non-agricultural market access.  Negotiators were pretty close to an agreement in July, but differences in domestic politics got in the way.  Reacting to the two previous speakers, he said that domestic support is of crucial importance because substantial reductions of domestic support can only be achieved in multilateral negotiations, while reductions in agricultural tariffs could be also obtained in bilateral FTAs.  The EU has made dramatic reforms to its Common Agricultural Policy and others should do the same, he said. The EC committed itself, on certain conditions, to eliminate export subsidies by the end of 2013 and the direct effect can already been seen on world markets. He agreed with the two previous speakers about the importance of ensuring improved market access for all products. What is on the table for market access is three times more ambitious than what was on the table at the end of the Uruguay Round. “If we let slip this opportunity, he concluded, I do not think it will easily come back” he said. 

 

4. India - Deputy Permanent Representative Ravi BANGAR: He stressed the critical importance of agriculture for the economy of India. It accounts for 22 per cent of GDP and the livelihoods of million of subsistence farmers. Thus India has no choice but to focus on agriculture for the development of its economy and to increase per capita income. Agriculture is at the heart of this Round, he said, and should constitute the main deliverables. For the 2 billion subsistence farmers in the world, it is unacceptable to have trade-distorting domestic support in developed countries. Most farmers in India are subsistence and they need to increase agricultural production. “By no stretch of imagination could developing countries’ agricultural policies be considered as trade-distorting, he concluded. “We must recognise the asymmetries and do away with them in this Round”.

 

5. Japan (G-10) – Deputy Representative - Economic Affairs Takehiro KAGAWA: He started by announcing the appointment today of the new Japanese Prime Minister, Shinzo Abe. The new Minister of Agriculture is pro-active on agricultural policy reform, he said.  Japan is fully committed to the Doha Round, although as an agricultural importing country, Japan has to take a defensive position in the negotiations.  Japan would like to contribute more for a successful conclusion of the Round.  However, the market access concessions of net agricultural importing countries should be balanced with the domestic support reductions.  He recalled that, since this is a development Round, Japan announced a development initiative in Hong Kong last December to increase duty-free quota-free market access from 90% to 98% for LDCs.  Despite the suspension of the negotiations, Japan is now implementing this initiative.  It is important to have a conclusion that gives benefits to developing countries in this Round, he said.  He highlighted the consensus among leaders that the negotiations should be resumed as soon as possible.  He said that the G6 countries have bigger responsibilities in this regard.

6. USA – Deputy Chief of Mission David SHARK:  He started by underlining the strong commitment of the USA to all WTO members to unblock the negotiations and lead to balanced, comprehensive and ambitious conclusions.  On top of agriculture, there is a need to find solutions as well on NAMA and services in order to get a balanced package.  He would not choose any one priority issue saying they are all important and part of the package.  He recalled what the US put on the table, saying that the 50 per cent cut in trade-distorting support, which was raised to 60 per cent, will require changes in domestic farm policies.  These are real, meaningful cuts, he said, and the US is prepared to make additional cuts as they said during the Cairns Group meeting last week.  However, strong results on improvements in market access from other countries are critical to successfully conclude the Round.  “Ultimately, what we have seen offered will not provide the meaningful new market access opportunities that are needed,” said Mr. Shark.

 

Summary of the discussions that took place following the presentations:

• Reactions of leaders from farmers’ organisations

1. Peter Gaemelke, Vice-President of IFAP; President Danish Agricultural Council: He said that farmers in Europe want a multilateral agreement in WTO.  They are concerned about the present increase in bilateral agreements, which are no alternative for farmers both in developed and developing countries. He said that European farmers are open to liberalization, but it should be recognized that they have to live up to very high food safety, animal welfare and environment standards compared with many other countries. Further, EU farmers have seen a significant reform of EU agricultural policy that will lead to a reduction in EU food production.  The implementation of the WTO agreement will require sufficient time for EU farmers to adjust.  He invited the negotiators to go back to the table in order to have an agreement with results for farmers.  “To the ones who keep asking for more and more, I would like to say that it might be better to take few steps than jumping so far you don’t know where you will be landing” he said.  “Even after the WTO negotiations, conditions for agriculture will still be different in different countries, owing to different currency movements, taxes, regulations, and many other things. We will not solve everything in WTO” he concluded.

 

2. Ajay Vashee (from Zambia), Vice-President of IFAP; Chair of the Southern African Confederation of Agricultural Unions (SACAU): For many of the developing countries of Africa, there has been a painful transition to market liberalisation. It has been done too fast, and the expected positive results have not come internationally. There is a diversity of farmers in Africa, from small subsistence farmers to commercial farmers but both groups have been disadvantaged with trade liberalisation.  The new trade structures have not come with transitional mechanisms and it has been painful for African farmers.  The WTO is not a development organisation, but there are some development issues that have to be taken on board in WTO agreements. In order to integrate developing countries into global trade, it is necessary to mainstream ‘aid for trade’.

 

3. Fernando Lopez, Chair of IFAP’s Latin American and the Caribbean’s Farmers Committee; President of the Comisión Nacional de Fomento Rural of Uruguay: He mentioned that the 80% of farmers in Latin American are family farmers and peasants and will never be a threat to the rest of the world. Also, there are big income inequalities in the region. In addition, there are problems from developed countries policies. Mr. Lopez regretted the increase in bilateral agreements: “what are the capacities for small countries to negotiate bilateral agreements with countries like the USA?” The WTO should be better serving the developing countries, he said. Member governments in WTO are the same as in the UN and the FAO, and so they need to have more coherence in what they say in different institutions.  He called for an end to export subsidies, and asked for improvements in market access “that would preserve the domestic market for small farmers to allow their sustainability and important role they play in the food security for our countries”. The WTO should be a tool for economic development and social justice in the sense that it can help to improve trade in multilateral negotiations. It can also help to ensure that issues like animal health and geographical identifications are not used as new barriers to trade from developing countries. Mr. Lopez concluded by asking if there is a real will to reach an agreement, for “the worse impact of failure will be on small farmers”.

 

4. Sutrisno Iwantono, Chair Advocacy Centre for Indonesian Farmers: He said that liberalisation is hurting small farmers in Indonesia. Over 40 per cent of the population is in agriculture; their most important crop is rice. However, as a result of trade liberalisation after the WTO Uruguay Round in 1995, rice imports increased significantly, from 0.5 million tonnes to 3.7 million tonnes. A similar situation occurred with other food crops such as soybeans whose imports increase two times and sugar whose imports increased almost three times. Food import surges threaten food security in Indonesia and push more people into poverty. Indonesia joins with the G-33 proposal to protect against food import surges through the concept of “Special Products” and a “Special Safeguard Mechanism”, which should be simple, flexible and reflect the problems of farmers in developing countries. Concerning the other pillars of the negotiations, Mr. Iwantono did not mind countries giving their farmers subsidies so long as they did not disrupt domestic markets of other countries.

 

5. Robert Friesen, President of the Canadian Federation of Agriculture: He said that he was puzzled by the claim by the US that their proposal would results in deep cuts to trade-distorting farm subsidies, when according to him it would in fact allow the USA to use more trade-distorting subsidies than they are using now.  He was puzzled too by Australia’s claim that TRQs should be transitional, since he maintained that TRQs with zero in-quota tariffs give more real market access than any “gratuitous reduction in over-quota tariffs”. Mr. Friesen said that Canadian farmers are coming out of the worst three years of farm income in history and are looking at the Doha negotiations to try to improve the situation through reducing trade-distorting subsidies and increasing profitable market access. He expressed concern about proposals to undermine farmers’ marketing organisations in this Round.

 

• Reactions of other participants in the room

A brief question period followed the remarks of governmental and farmers leaders.

The President of ANOPACI (national farmers organisation in Côte d’Ivoire), Mathias N’Goan asked why the WTO was not doing anything about the trade distortions caused by the effects of currency exchange on farmers.  Ambassador Trojan responded that it was not the job of WTO.

Another questioner referred to a statement by the USA delegation at the Cairns Group meeting last week that they were prepared to go further in reducing domestic support, and asked if the EU would respond accordingly on market access. Ambassador Trojan replied that the EU had already stated that it was prepared to go well beyond its October proposal towards the G-20 proposal. However what the US had put on the table in terms of cuts in domestic support would in fact allow them to increase subsidies from a present amount of $19 billion to a new limit of $22 billion. US representative Shark contested these figures saying that they included new blue box measures that the USA had agreed to cut by half. On the market access proposal of the EU, Mr. Shark said that this had been rejected as inadequate by the USA, the G-20 and the Cairns Group.

 

The last question concerned the USA and G-33 settling their differences on Special Products and Special Safeguard Mechanism. US representative Shark said they had accepted that both SP and SSM would be part of the package. However the USA would not agree to implementation of them that severely restricts any benefits that might come out of the agreement.

 

• Reaction and closing remarks by the Chairman of the Negotiating Sessions of the WTO Agricultural Committee, Ambassador Crawford Falconer

In his closing remarks, Ambassador Falconer expressed his disappointment to see that negotiators cannot agree, even at this point of the negotiations.  The main reason why the negotiations are suspended is politics, he said. “I don’t think the differences are fundamentally difficult, in technical terms”. However, if we are to have any chance of advancing the negotiations, members have to spend time to understand the other person’s point of view and not score political points, he continued. Ambassador Falconer drew attention to the fact that the EU and Japan had made fundamental reforms to their agricultural policies, and that the US has an opportunity to do so with its new Farm Bill. He was disappointed that negotiators could not get together to agree to what amounts to “somewhat contractualizing the existing state of affairs”.  There is agreement to eliminate export subsidies in all forms, substantially reduce trade-distorting domestic support and no one is arguing to eliminate agricultural tariffs.  If the Round fails, it will not lead to the collapse of agricultural markets or make a profound difference on stock markets. But, politically, it makes a huge difference.”  In a world where there is no multilateral reinforcement, there will be “picking and choosing” of friends in an uncertain world and a lot of people will be left out.

 

• Intervention by IFAP President Jack Wilkinson

Before closing the session, Mr. Wilkinson stressed that for farmers it is important to get a WTO deal, but a good deal that improves farmers’ incomes. Farmers must press back home for a multilateral solution.

 

Conclusion

The discussion during the IFAP session demonstrated that the negotiations were suspended for political reasons more than economic reasons.  All speakers underlined that they were very close to an agreement.  Everybody agreed on the elimination of export subsidies and the need the improve market access. Farmers pressed the leaders to go back to the negotiations table because a multilateral agreement on agricultural trade is critical for them.