Rice farmers in Viet Nam. Cotton growers in Kenya. Campesinos in southern Mexico. Millions of people around the world depend on agriculture, either directly or indirectly, to earn their livelihoods. Farming is especially crucial for the world's rural poor -- 70 percent of this most vulnerable of populations depends on agriculture as their sole source of income.

But despite booming world trade in food products -- the value of which has roughly doubled over the last two decades, according to FAO -- agriculture in the developing world continues to struggle. Today, the share of developing countries in world food trade adds up to about 27 percent of the total -- essentially the same level as 20 years ago.

Indeed, for all the economic opportunities associated with international trade, poor farmers in the developing world often find themselves unable to compete in overseas markets. Also, they are frequently outcompeted by foreign imports at home as well. This is largely due to unfair, subsidized competition. Since 1980, the total food import bill of the developing world has grown some 60 percent.

Many of the challenges underlying this situation -- lack of credit, inadequate infrastructure, lack of technology, and in some cases social strife -- are internal.

Others are not.

In particular, development advocates, including FAO, have long pointed to the agricultural subsidies and tariffs used by wealthy countries to support their farming sectors as having a serious, if not fatal, drag effect on the sustainable development of agriculture in the poor parts of the world.

In 2001, faced with a groundswell of voices from developing nations urging that imbalances in global trading rules be redressed, countries attending the fourth ministerial meeting of the World Trade Organization (WTO) in Doha, Qatar, agreed to put these issues front and centre in their negotiations.

A previous series of trade talks (the Uruguay Round, 1986-1994) had produced an agreement that called for reductions in export subsidies, domestic support to farmers and tariffs on imports of agriculture products -- policies long targeted by developing countries as a barrier to their participation in the global marketplace.

At Doha, however, many poor countries argued that those reductions hadn't done enough to level the playing field. As a result, in the final declaration adopted at Doha, WTO members committed themselves to undertaking "comprehensive negotiations aimed at: substantially improving market access; reduction of, with a view to phasing out, all forms of export subsidies; and, substantial reductions in trade-distorting domestic support."

Observers greeted these goals as a good first step towards creating a fairer global marketplace.

But two years later, negotiations regarding "modalities" -- the guidelines, procedures and deadlines that govern how those goals will be achieved -- remain ongoing, even though they were to have been ironed out by now.

Recently, the United States and the European Union forged a bilateral agreement to eliminate subsidies over time on products of "particular interest" to developing nations in order to pave the way for progress at the WTO ministerial conference in Cancún, Mexico, from 10 to 14 September. Observers have cautiously greeted the move as improving prospects for implementing the agenda charted at Doha. However, some have noted that the agreement fails to identify those products or to establish a timeline for the removal of subsidies.

"For the first time there is some movement in the right direction," FAO Director-General Jacques Diouf says. "But it is just a step on a long road, which would lead to what I hope would be a true level playing field in the area of agricultural trade, that would create conditions that are more favourable to developing countries."

Will developing countries' concerns be resolved at Cancún? Prospects remain uncertain. Many poor countries continue to insist on deeper commitments to reducing subsidies and domestic supports in developed nations and are unwilling to compromise on other areas until that happens.

"For the world's 840 million hungry people, there is a lot at stake," warns Diouf. "Agricultural development and improved job opportunities in rural areas could mean the difference between life and death. Their fate may decide whether we live in a stable world, or one wracked by failing economies, political turmoil and social chaos."

For an overview of trade issues related to food security that FAO will be raising at the upcoming Cancún WTO ministerial, browse the stories and links to the right.


September 2003


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