India and China thwart the agribusiness monster
Out of the failed World Trade Organisation talks has arisen a new arena for Sino-Indian co-operation. For the second time in recent history, India and China defied the west and forged a common stance on a vital international issue. The first was global warming; this time it was food. Underscoring the historic rivals independently arriving at the same conclusions is their refusal to accept a series of food myths disseminated by industrial-scale western agribusiness intent on undercutting the world's poorest farmers.
Emotions ran high during the WTO negotiations, where India scuppered such plans and became the target of western, especially American, fury. In the ensuing recriminations, China matched India's stand and lambasted the 'selfishness and shortsighted behaviour' of wealthy nations.
The US claims that the talks became untangled because of a Special Safeguards Mechanism. India's negotiators believe that the mechanism was a convenient tool to avoid talking about western subsidies and to finish talks which the west never wanted to conduct - not if it meant allowing some of the world's poorest farmers to keep their only source of income.
Two intertwined myths were at the centre of the collapse. First, it is not just the poor who protect their markets. The rich do so, too. Africa continues to demand that subsidies to US cotton farmers be removed - but this was not even discussed. Second, while maintaining their own subsidies, western nations demand that the global south drop trade barriers to food - especially cereal. Doing so would mean 1 billion subsistence farmers having to compete with mechanised, subsidised and international western companies.
The effects of western firms exporting to the global south would be catastrophic. Industrially produced grain would undercut subsistence farmers. Poor consumers would buy cheaper western grain, putting subsistence farmers out of business and destroying their only source of livelihood. As an incensed Kamal Nath, India's lead negotiator, put it: 'The most important thing was livelihood security, the vulnerability of poor farmers, which could not be traded off against the commercial interests of the developed countries.'
Another benefit of the south's barriers is that they protect the environment. The west wants the global south to lower its food barriers because there are large profits to be made, but this requires shipping vast amounts of grain. Transport would translate into a huge increase in sea-borne traffic and pollution.
Common sense suggests that cheap subsidised and mechanised western grain is the antidote to rising food prices. The idea rests on another myth; that food price rises are due to newly prosperous Asia's insatiable appetite for meat. It has supposedly led to an explosion in livestock farming and a corresponding increase in demand for feed, which ultimately drives up grain prices. In fact, India's demand for wheat is growing by just 2 per cent annually and China will require the same amount of wheat next year as it did three years ago.
Rising food prices have little to do with Sino-Indian prosperity. The European Commission reported in April that the price of food was increasing disproportionately to the increase in the price of the commodity used to manufacture it. Bread, for example, costs 10 per cent more now, though the price of wheat increased by just 3 per cent.
The EC says that, though energy, transport and labour costs have risen, 'it is possible that somewhere along the food chain someone may be doing well out of this. We are not drawing conclusions; we are just presenting facts'. The profiteers are giant businesses who run Europe's food supply and want to extend control to the rest of the world.
India and China will not allow it. Global food supply is too important to be controlled by a tiny cartel of producers, processors and distributors.
