momagri, a new way that combines the goals of the Doha Round, the Millennium Round and the Rio Conference ____________________________________________________________________
The current deadlock in the Doha Round questions the WTO strategy based on the non-regulated liberalization of international exchange, particularly agricultural exchange.
But beyond this, it creates a void in terms of an international development policy and poses an essential question for the future of humanity: which international strategy should we implement today to combine the objectives of the Doha Round, the Millennium Round and the Rio Conference?
As we have been demonstrating over the last several months, the objectives targeted by the International Community all concern agriculture.
However, at present, no institution is proposing a world development strategy which:
› fully assesses the role of agriculture;
› is the object of a consensus on an international scale;
› meets international, but also regional challenges.
This is why we believe it is time to establish, during the suspension of negotiations, the foundations of a world governance for agriculture, responsible for promoting regulated liberalization of international agricultural exchanges as a complement to actions initiated by the WTO and the FAO.
Since the beginning of the 1990s, the International Community has defined three objectives to improve wellbeing in the world, in a sustainable manner, particularly in developing countries (DCs):
› The fight against poverty, the terms of which are given in the Millennium Development Goals (2000).
› Sustainable development and environmental protection within the framework of the Rio Conference (1992).
› The establishing of an equitable and liberal international trade system targeted by the Doha agreements (2001).
However, although the expected benefits of these three objectives are undeniable, we have to admit that the strategies pursued in order to reach them have proved to be inefficient:
› Poverty is increasing in most regions of the world,
› Little progress has been made in the three components of sustainable development (environmental, economic and social).
› And the Doha Round has reached deadlock.
But, it appears that the non-regulated liberalization policy of international agricultural exchanges to reach the Doha objective is incompatible with the Millennium Development Goals and those of the Rio Conference.
However, and this is what we are describing here, these three objectives can only be reached if there is real international cooperation in favour of world governance for agriculture, because these three objectives are all related to agriculture.
I. Agriculture is at the heart of the Millennium Round and the Rio Conference.
The objectives targeted by the Millennium Round and the Rio Conference are closely linked, and agriculture is a central issue. In fact, as the main objectives of the Millennium Round and the Rio Conference are respectively the fight against poverty and environmental protection, agriculture is the strategic variable on which we must act to be able to reach these objectives.
A. Agriculture: the key to the Millennium Round?
1. The seven Millennium Development Goals
In order to begin the 21st century under favourable conditions, the United Nations Member States, in 2000, agreed on seven essential and universal goals to be reached by 2015, called the Millennium Development Goals (MDGs). These goals, which include reducing extreme poverty by half, primary education for everyone and the fight against the spread of HIV/AIDS, comprise a schedule of plans for the beginning of a better world.
These seven goals are the following:
Goal 1 – Eradicate extreme poverty and hunger in the world.
Goal 2 – Achieve universal primary education.
Goal 3 – Promote gender equality and empower women.
Goal 4 – Reduce child mortality and improve maternal health.
Goal 5 – Combat HIV/AIDS, malaria and other diseases.
Goal 6 – Ensure environmental sustainability.
Goal 7 – Develop a global partnership for development.
But we already know that these goals will not be reached by 2015:
› Poverty is increasing in most regions in the world, and this phenomenon is now affecting developed countries.
› Social inequalities remain numerous and are even increasing in certain regions.
› The spread of serious infectious illnesses (HIV/AIDS, malaria, tuberculosis…) has not been curbed.
› Damage to the environment is increasing, and particularly in DCs where impoverishment of the biodiversity is reaching alarming levels.
2. The strategic role of agriculture to reach the objectives of the Millennium Round
Priority must be given to the agricultural economic sector if we wish to reach the objectives of the Millennium Round, because its development would enable us:
› To fight hunger in the world, and particularly in developing countries.
The fight against hunger and poverty implies the necessity for developed and competitive local and regional agriculture, which would ensure food security and sovereignty for DCs.
› To encourage autonomy and economic growth in DCs.
The objectives of the Millennium Round mainly concern DCs, where the agricultural sector plays a fundamental role because it employs a large part of their population, and represents most of their GDP.
Thus, the development of the agricultural sector would enable farmers to make a living from their produce and would initiate virtuous circles of growth, with many advantages: reduction of extreme poverty and hunger, development of education and autonomy for women, reduction in child mortality…
It is important to point out that no country in the world has experienced stable and sustainable economic growth in the past without prior development of its agricultural sector.
› To contribute to the fight against the spread of infectious diseases.
As Marc Gentilini, former president of the French Red Cross, highlights, a good diet is a necessary condition for the elimination of infectious diseases: « the three criteria necessary to aspire to sustainable development are health care, education and food. Most infectious diseases that are spreading in poor countries are aggravated by malnutrition and/or undernourishment: a correct diet is the basis of correct health care. AIDS for example can be stabilized by antiviral treatments, but an undernourished patient will die if he does not receive the correct treatment »1
B. Agriculture was the major preoccupation of the Rio Conference
1. The Rio Conference popularized the concept of sustainable development
In an attempt to meet the challenges of growth, the United Nations Conference on environment and development, adopted, in June 1992 in Rio de Janeiro (Brazil), a declaration enlarging the concept of rights and responsibilities of countries in environmental matters, by popularizing the concept of sustainable development.
The objective was to define a plan of action for the 21st century, known as Agenda 21, which set out the fundamental principles to achieve sustainable development on Earth, development that society on our planet can support, taking into account the needs generated by demography and by the growth of business, without endangering the interests of future generations.
The Rio declaration thus shows that there is dialogue between industrialized countries and developed countries on the link that exists between economic growth, world pollution (air, water, oceans…) and the wellbeing of people throughout the world:
› Some wished to highlight the necessity of protecting the planet.
› Others wanted the subjects that concerned them to be examined in detail, and their sovereign rights to development to be highlighted.
Although since 1992 some progress has been made on the environmental issue of sustainable development, little progress has been made on economic and social issues.
And yet these issues are essential to the implementation of sustainable development and agriculture plays a fundamental role in this.
2. The strategic role of agriculture to reach the objectives of the Rio Conference.
Just as the development of local and regional agriculture is a necessary condition to reach the Millennium Development Goals, priority must be given to the agricultural economic sector if we wish to reach the objectives of the Rio Conference, because this sector is central to the issue of sustainable development:
› Agriculture is directly linked to the environment.
It can therefore take part in the fight against negative external influences that affect the environment on a local level (deforestation, land pollution…) and on a world scale (damage to biodiversity, desertification…).
It can in fact generate positive external influences for the environment, by maintaining the land, preserving the rural social fabric and encouraging biodiversity.
› Agriculture is the only economic sector that can be the object of international cooperation.
Sustainable development is a universal concept that necessitates cooperation between all nations in the world. Agriculture, because of its strategic and specific dimension, is the only economic sector that can initiate cooperation on a world scale with a view to promote development.
II. The Doha Round can be an obstacle to achieving the objectives of the Millennium Round and the Rio Conference.
The strategy chosen to reach the objectives of the Doha Round involves the liberalization of international agricultural exchanges. However, the deadlock in negotiations shows that this strategy is ineffective in dealing with the question of agriculture. And, as agriculture is at the crossroads of stakes as strategic as those targeted in the Millennium Round or the Rio Conference, it is clear that the WTO strategy can be an obstacle to achieving these goals that are essential for the future of humanity.
A. Deadlock in the Doha Round is the result of an error of judgment on the role of agriculture
1. The Doha Round or the “Development Round”..
The Doha Round began in 2001 in Qatar. It is also called the “Development Round” in order to show to all countries in the world that its objective is to solve the DCs’ trade problems, which had been brought to light during previous negotiations.
The Doha Round, a series of multilateral negotiations, under the aegis of the WTO, aims to set up a liberal and equitable international trade system, to meet the future challenges of agriculture, services, industry, intellectual property rights concerning trade, electronic trade and the environment.
2. Agriculture: a sensitive issue for the Doha Round
Although the Doha Round concerns many economic sectors, the major part of the negotiations was focused on agriculture because of:
› the basic premise according to which the liberalization of international agricultural exchange would improve the wellbeing of all countries in the world and particularly DCs. In this respect, we must realise that traditional economic models used during negotiations have played a major role in legitimizing the benefits of total liberalization of markets. 2
› - the “delay” in the liberalization of international agricultural markets in relation to major industrial or financial markets.
› - the desire to focus discussions in the Doha Round on the poorest developing countries, where agriculture is the dominant economic sector.
For this, the WTO Member States made a commitment to conduct global negotiations, using a programme of reform consisting of firm rules and specific commitments concerning agricultural support and protection from public powers.
The goal was to find a solution to the restrictions and disturbances that affect world agricultural markets, which are:
› abolish all trade barriers that impede market access;
› reduce then abolish all forms of export subsidies;
› dismantle all types of trade disturbing domestic support.
The Doha Round, which should initially have lasted only three years, has today reached deadlock. The United States, the European Union, or the countries of the Cairns Group did not want to make more concessions on the agricultural issue. This breakdown in negotiations, which is paralysing the Round, is much more than a simple “break” in discussions:
› First, it questions the validity of the WTO strategy, which is the liberalization of agricultural markets without safeguards and the application of Ricardo’s comparative advantage theory to promote a world price based on a system of the lowest bidder on an international level, when only 10% of world consumption comes from product exchanges.
› And above all, it shows the strategic importance of agriculture at in international level. As G.W. Bush, president of the United States says, “It is important for our nation to grow produce in order to feed our people. Can you imagine a country that is unable to produce enough food to feed its population? Such a nation would be under international pressure. Such a nation would be in danger. So, when we talk about agriculture, …we are actually talking about a matter of national security".
B. The liberalization of international agricultural exchange promoted by the “Doha Round” is a new risk for DCs.
1. The liberalization of international agricultural exchange without safeguard carries risks for the economic growth of DCs.
The liberalization of international agricultural exchange will result in considerable collective costs particularly for the most vulnerable DCs:
› The falling rate of world prices and farmers’ incomes will lead to unemployment, desertification of rural areas and an increase in poverty.
› A weakening of the rural social fabric and production chains will produce negative effects on land and environmental development.
› The decline in the security of supply will have a strategic impact on food dependence.
In addition, as current negotiations in the Doha Round aim to dismantle all trade barriers and at the same time implement minimum agreements concerning intellectual property (TRIPS agreements), it is highly unlikely that DCs will benefit at all from the liberalization of international exchange.3
In fact, contrary to Southern Countries, developed countries have a wide range of intellectual property policies and great capacity for research, which will limit innovations in the South and their circulation to the North.
Therefore, if no regulation measures are implemented, the Doha negotiations will lead to a new type of anti-competitive situation, characterized by the free circulation of agricultural products, which could, in extreme cases, belong to one country or a group of countries. In this way, an Indian farmer could legally be condemned to pay royalties to an American company for growing the rice his ancestors had grown.
2. The liberalization of international agricultural exchange without regulation could be a “poverty machine” in DCs
The liberalization of international agricultural exchange sought by the Doha Round will lead to the abolition of trade barriers, domestic support, export subsidies, as well as preferential agreements, from which DCs benefit. Thus, unequal production systems will be in direct competition with each other, and the strongest will define world price levels.
However, there are differences in productivity, which can range from 1 to 1,000 in the same market, between modern agricultures in developed countries and traditional agricultures in DCs. From now on, DCs, which earn most of their income from agriculture, will become poorer because they will not be able to maintain such non-lucrative price levels in the long-term, and most of the benefits from the liberalization of agricultural markets will be gained by a few producers in developed and emerging countries.
At the same time, the abolition of preferential agreements will result in the diversion of trade flow towards the regions that benefit from unwarranted earnings (vast territories, lack of welfare, contempt for the environment), which will cancel out the so-called positive effects of the creation of trade flow caused by the dismantling of exchange barriers. Thus, after the abolition of preferential agreements, it is likely that Brazilian exports will replace African exports because African products will be more expensive than Brazilian products.
Therefore, if no regulation of international agricultural exchange is implemented, the Doha Round:
› will lead to increased poverty in the poorest countries, which will become trapped in a state of under-development caused by unemployment, child mortality and the deterioration of sanitary conditions…
› will hamper economic growth in DCs, even if they are capable of exporting and withstanding competition from developed countries, which is far from being the case. In fact, the existence of non-commercial barriers in developed countries (phytosanitary, quality…) would limit their exports and as the proprietors of innovation patents are mostly foreign companies, DCs would be deprived of the surplus generated.
International cooperation in favour of world governance for agriculture is therefore more than ever necessary.
III. momagri: a new way that combines the goals of the Doha Round, the Millennium Round and the Rio Conference
Combining the goals of the Doha Round, the Millennium Round and the Rio Conference is necessary to meet the future challenges of humanity. However, at present no international institution is examining these three series of objectives. It is this void, which produces a certain risk for future generations, that momagri would like to fill, by creating a world governance for agriculture responsible for promoting, by consensus, a regulated liberalization of agricultural exchanges that would satisfy world but also regional challenges.
A. momagri: a global and completely new approach to agricultural reality
momagri is not opposed to any international organization (WTO, FAO, UNDP…) but aims to provide the essential missing element to be able to reach the objectives fixed by the International Community:
› The fight against poverty, the terms of which are described in the Millennium Development Goals.
› Sustainable development and environmental protection within the framework of the Rio Conference.
› The implementation of an equitable and liberal international trade system targeted by the Doha agreements.
To do this, momagri is creating world governance for agriculture responsible for promoting, by consensus, a regulated liberalization of agricultural exchanges in order to:
› counter any speculative drifts that destabilize agriculture throughout the world.
› ensure that world agriculture does not become concentrated in just a few geographic areas that benefit from unwarranted earnings (vast territories, a lack of welfare, contempt for the environment) that could affect food security on a world wide scale.
› avoid collective costs that our societies would have to pay tomorrow if agriculture disappeared in certain regions of the world.
› improve the systems and decision-making tools (economic models, methods and the foundation stone of WTO negotiations…) which can no longer meet the challenges that agriculture represents for the future of humanity in terms of fighting against poverty, satisfying growing food requirements and ensuring the independence and sovereignty of States.
The WOA will be based on three pillars that will help it reach the objectives it has fixed for itself, while respecting the constraints of transparency, credibility and responsibility that a mission such as this implies.
1. First pillar: An equitable economic agricultural model (the momagri model)4
International negotiators do not currently have a reliable decision-making tool to enable them to evaluate, on a credible and transparent basis, either before or during negotiations, the probable consequences of a national or international agricultural political scenario.
This is why momagri has decided to create an economic model, the New Agricultural Regulations (NAR) model, which, by taking into account the specificities of the agricultural sector, basing itself on innovative construction principles capable of respecting these specificities, and by integrating the seven criteria that any equitable agricultural model should respect5 will be a major decision-making tool for all negotiators and international decision-makers.
2. Second pillar: An international assessment and grading agency (the NAR agency))6
Agriculture is situated at the crossroads of matters as strategic as poverty and famine in the world, the environment and energy. However, at present no international institution is responsible for promoting world governance that would encompass all these matters, would advise the different countries in the world on the coherence and the pertinence of their agricultural policies, and would be capable of giving recommendations to ensure that agricultural policies currently in effect are in line with the major objectives fixed by the International Community.
To fill this void, the construction of an international assessment and grading agency is the optimal choice because:
› it will regularly advise and guide international decision-makers on the agricultural sector and its stakes;
› it will be much more reactive than an International Institution and it will improve the functioning of agricultural markets.
› it will have a larger capacity for recommendation because of its grading of different agricultural policies;
› it will reinforce actions carried out by existing International Institutions (WTO, FAO, PNUD…).
Thus, for example if competition in a region is detrimental to the environment, regulatory action will be recommended, by consensus, informing those concerned of the cost for the community of the environmental damage. With this system, and thanks to the tools developed by the New Agricultural regulations (NAR) the WOA and trade-regulating organizations can tomorrow take the necessary measures to remedy, on a national and international level, the distortions that take place.
3. Third pillar: The principles of governance7
momagri’s raison d’être is to arouse international awareness and promote the creation of a World Organization for Agriculture.
The principles of governance explain the functioning of the future World Organization for Agriculture. They consist of two types of principles:
› The general principles of a regulatory system, which could be a basis for government decisions on agricultural, food and development issues.
They are based on two main ideas:
› The definition of an equilibrium price per product, calculated periodically by a recognized international body in partnership with the NAR Agency. It will integrate elements of monetary variability and the specificities particular to the major regions in the world to take account of the level of development and the minimal protection relative to human, social and economic needs in the regions concerned.
› These price levels will be chosen in order to guarantee an equitable level of income for farmers, fixed by consensus at an international level, taking into consideration parameters related to the degree of development of the countries.
Applying this principle will enable us to:
› eliminate harmful effects caused by extreme price volatility;
› reduce and even eliminate production aid;
› reinforce, if necessary, structural aid;
› guarantee equitable prices by region, for producers as well as consumers;
› extend to all regions in the world a system equivalent to the CAP, with deductions and restitutions at the frontiers of major regions.
› The principles of the organization of international agricultural exchange that define for each country and/or region the optimal solution between internal production, export and import.
Because these general principles are new, it is necessary to describe the principles of organization that would be used to set up and manage the organization.
The three major basic principles of organization are the following:
First principle: Taking into account the specific and strategic character of agriculture.
This principle does not exclude other major international bodies from the agricultural question because the WOA, as upstream regulator, would facilitate their work and give them better insight into agricultural reality.
Second principle: stable world and regional prices by sector, defined by management committees made up of the major producer and consumer countries.
The WOA will be composed of the major regions of major producer countries, taking agricultural sector by agricultural sector. But if we do not wish to fall into an oligopolistic pattern, it is necessary, in order to manage each of these sectors, for the main consumer countries to be involved and to participate in the definition of equilibrium prices, without which we would create a supply market.
Third principle: Transversal management committees based on the major issues that are specific to agriculture.
A preliminary study shows that three committees should be created:
› A phtyosanitary and product quality committee,
› A scientific and technological committee linked to research, innovation and yields.
› A food and development committee, which would deal with food stability of populations, their development and the relationship between agriculture – environment – growth.
We can add to these principles the conditions needed for their application, which would facilitate the organization of decision-making and the settlement of disputes.
B. momagri’s motto: “Think global, act local” or implement regulated liberalization of international agricultural exchange on a global level as well as on a local level in order to take into account regional specificities.
1. The momagri model will incorporate the Millennium Development Goals as well as those of the Rio Conference.
The agricultural question is central to the sustainable development issue, and cannot be dealt with solely from a commercial angle, abandoned to the free play of an unregulated international market and the power struggle between developed countries.
Therefore, by incorporating the Millennium Development Goals and those of the Rio Conference into the momagri model, momagri will guarantee that the decisions taken concerning the liberalization of international agricultural exchange will also act in favour of the fight against poverty and for sustainable development.
2. The NAR Agency will guarantee the credibility and the “supportability” of implemented agricultural, environmental and development policies.
By evaluating, advising and grading agricultural, environmental and development policies implemented in different regions in the world through the NAR Agency, momagri:
› will develop an information and assessment network, extending over the entire planet, which will improve the policies implemented by International Institutions (WTO, FAO…).
› will guarantee that the objectives announced are correctly followed and will therefore work towards reaching the major objectives targeted;
› will provide strong recommendations, accepted by the majority.
3. The WOA will combine the international regulations of agricultural markets with development criteria that are particular to each major region in the world: “Think global, act local”.
The future of many countries, and particularly developing countries, is defined by frameworks that are becoming more and more restricted as a result of international negotiations, which limit the leeway they have to adapt international policies to their own problems even more:
› WTO agreements determine customs policies, commercial policies, intellectual property policies, industrial and service policies.
› The World Bank declares the conditions of good governance, and gives financial and technical support to all developing countries.
› The IMF’s mission is to promote international cooperation and guarantee financial stability.
› Agreements on biodiversity and desertification influence forest and agricultural policies.
Thus, by implementing, by consensus, an international regulation strategy for world agricultural markets, and adapting it on a local level to respond to regional specificities, momagri will set up a pertinent, efficient and sustainable world governance for agriculture, capable of meeting international as well as regional challenges: “Think global, act local”.
1 Declaration by Marc Gentilini during the conference organized by momagri on 19th October 2006 “In search of a strategy for world agriculture: how to combine liberalism and development”. Cf www.momagri.org website, podcasts / first round table section
2 momagri has carried out extensive studies of these models, and has found that they are imperfect and ill-adapted to their use. (Cf. www.momagri.org website, Proposals and Missions/The momagri model section).
3 Cf the article entitled “Note on intellectual property in the field of agriculture” available on the www.momagri.org website in the Editos and Points of View / Points of View section
4 A full presentation of the momagri model is available on the www.momagri.org website in the Proposals and Missions section.
5 This is the degree of independence from the outside world, climatic and market risks, poverty, growth and intergeneration effects, innovation and intellectual property, the environment and sustainable development.
6 A more detailed presentation of the NAR Agency is available on the www.momagri.org website in the Proposals and Missions section.
7 A more detailed presentation of the Principles of Governance is available on the www.momagri.org website in the Proposals and Missions section.