United Nations

ENV/DEV/671
28 August 2002

AGRICULTURAL SUBSIDIES, MARKET ACCESS, SUPPORT
FOR SMALL FARMERS AMONG ISSUES DISCUSSED AT
SUSTAINABLE DEVELOPMENT SUMMIT

(Received from a UN Information Officer.)

JOHANNESBURG, 27 August -- The impact of agricultural subsidies on developed and developing countries, market access for the products of the developing world and support for small farmers were among the issues discussed this morning, as the World Summit on Sustainable Development examined a framework for action in agricultural productivity.

This morning's session was the third in a series of five "partnership plenaries" dedicated to the issues identified by Secretary-General Kofi Annan as key to progress at the Summit -- water, energy, health, agricultural productivity and biodiversity. The Summit, which expects more than 100 world leaders to attend its high-level plenary next week, is meeting to build a commitment to better implement Agenda 21, the roadmap for achieving sustainable development adopted at the 1992 United Nations Conference on Environment and Development - the Earth Summit - held in Rio de Janeiro, Brazil.

S. Swaminathan of the Swaminathan Foundation, the first recipient of the World Food Prize, opened the discussion on this morning's theme, saying that agriculture was the best safety net against poverty and hunger. He stressed that agriculture was not just a food-producing machine, but also the backbone of the livelihood and ecological systems of most developing countries.

Every country, he said, must have an agriculture compact with three components: defending the gains already made; extending the gains made into marginal areas such as the semi-arid and mountainous areas; and making new gains, using agroprocessing and diversification, among other things. To accomplish all that, he continued, institutional structures to manage change were necessary.

Also addressing the theme, Pedro Sanchez, Executive Director of the International Center for Research in Agroforestry and the 2002 recipient of the World Food Prize, drew attention to the "ominous paradox" in which agriculture in the developed world evoked notions of pollution, overproduction and subsidies, while in most developing countries it was still the engine of economic growth. To end that contradiction, the global community had now the opportunity to address key actions on agriculture with a view to reducing poverty and hunger, facilitating growth and protecting the environment.

He added that it was time to dispel misconceptions about small farmers in developing countries, such as the notion that farmers in poor areas could not produce because there were no accessible markets and agro-industries, and that there was no private investment in farm schemes because there was no rural infrastructure. In Africa, the objectives of rolling back hunger, improving funding and reversing soil infertility could be achieved. The question was whether there was enough political will.

The discussion that following the opening statements included a panel of 15, representing United Nations agencies, non-governmental organizations, community activists and business. The debate was moderated by the Secretary-General's Special Envoy to the Summit, Jan Pronk.

A number of panellists addressed the issue of market access for developing countries to countries of the North, and the tariffs and subsidies paid to farmers in the North, which "crippled the life of farmers in the South". One panellist wondered about the impact if only a small portion of $1 billion a day in farm subsidies paid to northern farmers could be put to work ending poverty and hunger in the developing world.

Following the panel, several Member States and representatives of major groups also participated in the discussion. The Minister of Agriculture of the United Republic of Tanzania noted that a successful way to increase the production of small farmers to marketable surplus was the use of credit financing. However, many financial institutions were reluctant to engage in that activity in countries such as his, because of unpredictable weather. He also questioned the dichotomy on the part of the World Bank and International Monetary Fund that allowed subsidies in the North, but told the South not to subsidize.

Ethiopia's Minister of Agriculture pointed to serious constraints to making agricultural growth a part of sustainable development, including poor rural infrastructure, poorly functioning rural financial markets, unfinished policy and institutional reforms. Those restraints needed an injection of finance, along with the implementation of the broader agriculture-related Millennium Development Goals. Financing agricultural development was, in a way, financing sustainable development environments.

Also participating in the discussion were the government ministers and representatives of Cape Verde, United States, Austria, Iraq, Uruguay, Lesotho, Côte d'Ivoire, Bangladesh, Malawi, United Kingdom, Equatorial Guinea, Australia, Syria, Romania, Senegal, South Africa and Venezuela. Representatives of the Consultative Group on International Agricultural Research and the European Commission also took the floor.

The Summit will meet again at 3 p.m. to hold a partnership plenary on cross-sectoral themes.

Interactive Partnership Plenary

The first of two presenters on the theme of agriculture, S. SWAMINATHAN, Swaminathan Foundation and first recipient of the World Food Prize, said progress in agriculture was the best safety net against poverty and hunger. Agriculture was not just a food-producing machine, but also the backbone of the livelihood and ecological systems of most developing countries. There was a polarization between two groups. The first group was large agribusiness, using technology, capital and policies; the other was small-scale peasant farmers. It could be characterized as mass production and production by the masses.

He said, today, all international agencies had identified micro-enterprises as a means to achieve the Millennium goal of poverty eradication. Policies, therefore, must be conducive to survival of micro-enterprises. The most important micro-industry was agriculture. Every country must have an agriculture compact with three components. The first component was defending the gains already made in a period of changes, such as in the climate. The second component consisted of extending the gains made into marginal areas, such as the semi-arid and mountainous areas, which so far had been neglected. The third component should consist of making new gains, such as agroprocessing, diversification and integration of non-farm agricultural employment with farm employment.

To accomplish all that, he continued, institutional structures to manage change were necessary. He highlighted three of the most important changes in agriculture: technology; changes in ecology, including in climate, water, biodiversity and land; and trade. Marketing opportunities were key to progress in agriculture, he said. Youth would be predominant in the rollback of hunger in Africa, but retaining youth in farming was a challenge. Unless farming became rewarding and satisfying, they would not be engaged. Battling hunger in the short term was possible through the creation of a grid of community foodbanks. Such banks could battle chronic hunger, hidden hunger through micronutritient deficiencies and transient hunger from drought or civil strife. The New Economic Partnership for African Development (NEPAD) should give high priority to creating those food banks.

The morning's second presenter, PEDRO SANCHEZ, Executive Director of the International Center for Research in Agroforestry and the 2002 recipient of the World Food Prize, said that an ominous paradox hovered over the perception of agriculture. In the developed world, it was a "dirty word" as it evoked notions of pollution, overproduction and subsidies; while in practically all developing countries it was still the engine of economic growth.

Now was the time to end that contradiction, he continued, as the global community had the opportunity to address key actions on agriculture, with a view to reducing poverty and hunger, facilitating growth and protecting the environment. He said the framework for action on agriculture would aim to, among other things, increase agricultural productivity, while sustaining or enhancing natural resource bases. An overarching concern would, of course, be contributing to efforts to eradicate poverty and ensure environmental sustainability. That would be critical for many African countries, particularly in the sub-Sahara, where the most frequent problems encountered by farmers were lack of water and the soil infertility.

That region of Africa was the only region in the world that did not produce enough food, but where farmers paid six times international norms for fertilizers. Replenishing soil fertility was the key. After the soil fertility and replenishment, it would then be necessary to diversify small farms by promoting growth of vegetables, trees, even cattle -- in other words "all the things that rich people want to buy". Highlighting some successful diversification efforts, he reiterated that the true way forward was to implement projects which scaled up the capacities of African farmers.

He went on to say that now was time to dispel other misconceptions about small farmers in developing countries, including the notion that farmers in poor areas could not produce because there were no accessible markets and agro-industries, and there was no private investment in farm schemes because there was no rural infrastructure. To address those issues, the international community must make policies that promoted private partnerships, as well as partnerships between local governments and non-governmental organizations. As Chair of a millennium development task force on agricultural issues, he sought to involve a wide range of people in efforts to roll back hunger in Africa, improve funding and reverse soil infertility. Those objectives could be achieved. The question was whether there was enough political will.

In the interactive discussion that followed, JAN PRONK, Special Envoy of the United Nations Secretary-General to the Summit, addressed specific questions to panellists, representing United Nations entities, major groups, experts and advisers.

The morning's panel, 15 people representing United Nations agencies and major groups, was made up of: Philip Dobie, United Nations Development Programme (UNDP); Ann Herbert, International Labour Organization (ILO); Mehmet Arda, United Nations Conference on Trade and Development (UNCTAD); Rodney Cooke, International Fund for Agricultural Development (IFAD); Hartwig de Haen, Food and Agriculture Organization (FAO); Nwanze Okioegbe, World Bank; Kristen E. Sukalac, business; Bailhache Remi, farmers; Debra Harry, indigenous; Somyo Sakhumzi, South African local communities; Fred Kalibwani, non-governmental organizations; Lebo Lehutso-Phooko, scientific and technological community; Sue Longley, trade unions; Vandana Shiva, India (women's groups); Alouka Fena, Togo (youth groups).

Mr. PRONK asked participants to react to the "message of hope" about rolling back hunger presented by the speakers.

The representative of farmers said that he was in favour of most of the points raised. The development of infrastructure was vital, if farmers were to participate in decision-making on such issues as new technologies and ending hunger.

Mr. SANCHEZ said that agriculture was essential to make progress on the issue of biodiversity worldwide. Farmers were very directly concerned with the environment. It was important for all stakeholders to be involved in strong partnerships. Sustainable agriculture should allow every farmer to live off farming, as well as bring in new, young farmers.

The World Bank's representative said incentives were needed for small farmers to produce enough for their households, as well as market their surpluses. For that to happen, it was necessary to have a level playing field for small farmers and agrobusinesses. The discussion should not focus on one or the other, but on how to promote both.

The FAO's representative agreed that small farmers needed marketable surplus, technology and market incentives. In that connection, rural development and infrastructure development were crucial. He added that it was important that small farmers had access to technologies for sustainability of their limited resources, as well as opportunities for non-farming employment.

Mr. SANCHEZ explained how the logjam could be broken -- namely by getting the right technologies and having small farmers produce things that rich people wanted to buy. The involvement of the private sector and government polices were needed for that to happen.

Agriculture, stressed the representative of non-governmental organizations, was more than money -- it was a way of life, especially for the peasantry. It was necessary to think differently about how the whole issue of agriculture was approached.

The representative of women said that the majority of farmers in the world were women, the majority of the hungry and malnourished were women and children, and the solutions to end the hunger trap lay with women. Wasn't agrobusiness eating into the political and economic space of small farmers? Further, the issue of women's land rights needed to be a priority. Also, food security could not be achieved if water and biodiversity were privatized.

Asked if those issues were being addressed in the international debate, she said that while it had been hoped that delegates would build on Rio, it seemed that they were abandoning the processes begun in Rio.

Reacting to those comments, the representative of IFAD said it was necessary to also empower the organizations of the poor to produce change, paying close attention to women. It was necessary to work with the rural poor and their organizations to influence national politicians.

The central role must be played by local communities themselves, emphasized the representative of local authorities. In that connection, it was necessary to have capacity-building, particularly for women and youth.

Asked about the "Green Revolution" in Asia, Mr. SWAMINATHAN noted that India was now the largest milk producer in the world. How had India climbed to that position? It had done so through cooperatives, which provided health insurance and marketing facilities, among other things. The Green Revolution in Asia was largely a technology-driven approach. He added that anything that was done for women benefited the whole family, while the opposite might not be true.

The representative of indigenous peoples said that indigenous people were not a marginal sector when talking of agriculture resources. They were owners of much of the world's biodiversity. It was necessary to have limits on the extent of coverage to patents. Also, governments needed to safeguard traditional farming practices and to ensure that indigenous people had rights to protect and control their territories on their own terms. She asked the United Nations to reaffirm the vital role of indigenous people in sustainable development.

Asked if there was a role for business in agriculture, the representative of that sector said the short answer was -- yes. Defining business was key, however, because business had a huge range of actors, such as cooperatives, small local enterprises, national enterprises and multinational corporations. Partnerships were needed. The role of business in agriculture had traditionally been to provide services and products to farmers. Some food-processing companies had started sustainable agriculture initiatives and were working together with local communities to meet marketing demands.

The representative of trade unions said the recognition of the role of 450 million agricultural workers was missing from the analysis, so far. Their share of the agriculture production was increasing. For agriculture workers, agriculture meant low pay and dangerous work, as agriculture was among the three most dangerous industries. Safe jobs and decent working conditions were critical for progress in agriculture. Plantation workers and small farmers had a common agenda in sustainable agriculture, she said.

The representative of the ILO said, in order to be serious about addressing rural poverty, local labour had to be employed for living wages to spur the growth of small enterprises. Giving an example, she said building the very important rural feeder roads using employment-intensive approaches cost 30 per cent less than using a capital-intensive approach.

Addressing a question about export, the representative of UNCTAD said the issues of tariffs were important, but the problem in international trade was not only one of market access, but also of market entry. As subsidies were important in certain countries, developing countries were losing their share and did not have the resources to subsidize. The gap between the prices producers and retailers got for certain products, such as coffee, was growing, and producers got an ever-smaller share.

Mr. SWAMINATHAN said the most important decision to be taken in the World Trade Organization (WTO) negotiations after Doha would be the creation of greater market access and entry. Most developing countries did not have a sufficient infrastructure. Trade would destroy livelihoods. Hunger was due to lack of jobs and income. Large chain stores were destroying the jobs of millions of street vendors. If industrialized countries were serious about reducing poverty, it was important to look at the bottom line of livelihood security.

The FAO representative said market access to rich countries was important, but the poorest countries were getting increasingly dependent on food imports. The WTO must, therefore, also focus on productivity competitiveness. He hoped negotiation would lead to an agreement by which donors would help improve domestic productivity in developing countries. The official development assistance (ODA) to agriculture was now half the level of the 1980s. That trend had to be changed. Otherwise, lack of domestic competitiveness would lead to more import dependency in developing countries.

The youth representative said he appreciated the efforts to ensure food security, but things were moving very slowly. It was important to reduce subsidies that lead to overproduction, and encourage eco-agriculture. Genetically modified foods could not resolve food problems and more research in that area was necessary. He would like to see more women and youth in negotiations, so that agriculture had as its main target poverty reduction.

The business community representative said it was important that developing countries had the opportunity to export their products, but, if that were the only issue, the problems being discussed today could be solved easily.

Mr. PRONK went on to challenge the panel to take concrete positions on the issue of farm subsidies. Could farmers in the North survive without such subsidies? Could the concerns of both northern and southern farmers be reconciled by ending subsidies altogether?

The women's representative said there was no question that small farmers were being crippled by unpayable debt. Farm subsidies should be removed, because they were not "farmer" subsidies, but "business" subsidies.

The farmer's representative said what was clear was that farmers were asking for only one thing -- to be able to earn a living farming. If production costs were compatible with market prices, then no subsidies would be needed. Subsidies were in place to compensate for imbalances. It was not that farmers were clamoring for subsidies -- subsidies were a requisite of the current world market.

Asked if international agencies should shift their focus away from agricultural initiatives in the South and concentrate on reforming production and marketing issues in the North, the representative of UNDP said perhaps it might be necessary to concentrate on activities in northern countries and ask them to carry out better agricultural policies. The agency would continue to extend every effort to ensure that international community was made aware of the potential and the essential importance of small farmers, particularly those in the South.

Asked what message the Summit should send on the issue, Mr. SWAMINATHAN said world leaders throughout the North should consider giving small farmers "a little space" in the world marketplace. He added that perhaps the next Group of 8 Summit should be devoted to examining ways to promote policy changes in the North that would foster more equitable and sustainable farming and agricultural schemes.

Mr. SANCHEZ said the Summit had uncovered yet another paradox: subsidies to farmers in the North preserved a way of life, while such subsidies at the same time crippled farmers in the developing world. He wondered if only a small portion of $1 billion a day in farm subsidies paid to northern farmers could be put to work ending poverty and hunger in the developing world.

When the discussion was opened to delegations, they were asked to respond to two questions. First, what should be done in the next 10 years to make it possible for small farmers to increase productivity income and to give them a better marketable surplus? Second, what ought to be done to improve governance in agriculture in the North to get a more sustainable future in the South?

Responding to the questions, the Minister of Agriculture and Fisheries of Cape Verde said without the proper use of water there could be no sustainable agriculture. Another important issue was the mobilization of political will and resources to support agriculture. The time had come to not just do studies, but to actually begin projects.

A farmer himself, the Deputy Secretary of the United States Department of Agriculture said that, while national policies were important, it was farmers at the local level that really made the difference. The United States stood ready to help in the next 10 years in terms of partnerships, which his Government would be announcing in the coming days. The United States could provide insight and value in local areas around the world where improvement was needed. The record of his country showed that it was working to address some of the issues mentioned today.

On how to strengthen small farms, the Deputy Minister for Water, Agriculture and Environment of Austria said that his country had the highest number of organic farmers in the European Union. Perhaps organic farming could be a solution. It was necessary to concentrate on rural development, particularly infrastructure and renewable energy. Only with functioning structures in rural areas could farmers farm their lands. Producing what the consumers demanded required investment in logistics and marketing. Consumers needed to support farmers so they could produce what the market demanded.

A successful way to increase the production of small farmers so they had a marketable surplus, said the Minister of Agriculture of the United Republic of Tanzania, was through the use of credit financing. However, many financial institutions and insurance companies were reluctant to engage in that activity in countries such as his, because of unpredictable weather patterns. The North should remove distorting subsidies. He wondered why there was such a dichotomy on the part of the World Bank and International Monetary Fund (IMF) that allowed subsidies in the North, while telling the South not to subsidize.

Sustainable development could not be achieved, stated the Minister of Housing and Environment of Uruguay, if the subsidies and various other barriers of the developed countries continued. It was essential to fulfil international agreements, especially by those with a higher degree of responsibility. The Summit must help to resolve that issue.

Côte d'Ivoire's Minister of Environment said agriculture needed to be stabilized and land tenure laws needed reform. Diversification of cash crops was a must. More local processing of agricultural products, using small-scale technologies, was also necessary. Mechanization would alleviate the burden on women in agriculture. In order to achieve those policies, however, support from the international community was necessary.

The Minister of Agriculture of Ethiopia said there were serious constraints to making agricultural growth a part of sustainable development, including poor rural infrastructure, poorly functioning rural financial markets, unfinished policy and institutional reforms. Those restraints needed financial injection, along with the implementation of the broader agriculture-related Millennium Development Goals. He added that financing agricultural development was, in a way, financing sustainable development.

Lesotho's representative drew attention to the fact that today, as the Summit took place, some families in the sub-Sahara region were actually dying from starvation as a result of the acute drought there. She appealed, therefore, to participants to get the priorities straight: life came first, and sustainable development followed. She asked for clarification on the problem on whether to go for higher productivity or to stick to biodiversity, as some countries lacked sufficient information on that issue.

The representative of the Consultative Group on International Agricultural Research drew attention to the fact that, since agriculture started 10,000 years ago, the world's population had increased 600 fold. The production capacity of the land must increase without jeopardizing its future carrying capacity.

Sharing national experiences, several speakers emphasized the importance of water management and dealing with drought. The Minister of Environment and Forest of Bangladesh appealed for a programme of action to enhance in a sustainable manner use of land, water and fisheries. Iraq's Minister of Planning noted that, despite the sanctions imposed on his country, in which farmers received land and irrigation for free, it had achieved progress in the field of agriculture and water management.

Malawi's Minister of Natural Resources said his President had declared the country a disaster area earlier this year, because of disastrous crop failures. That move had been disheartening, because just three years ago Malawi had been largely food sufficient. The country had had in place a programme that targeted rural, small-scale farmers with seeds and fertilizers. Bumper crops followed and produce surpluses were routine. Despite those results, international supporters stopped their assistance, because it could create, they said, a "dependency syndrome".

Whatever the reason, the decision to end assistance had cost the international community nearly 10 times what had been initially allocated to the pilot project. Had that initial programme been supported, the country would not be in the position it was in today. Fortunately, however, the programme was being revived and next year 3 million families had been targeted for assistance. History had shown that such initiatives were an absolute must -- vital for food sufficiency, laying a strong foundation for cash crop production and the creation of agro-industry. With that in mind, he said that the problem was not a lack of political will, but a lack of economic support.

An NGO representative said it was imperative to ensure that agriculture and land use were viewed in the context of globalization. In the field of development, the traditional economies of indigenous peoples had been routinely ignored or eradicated when the practice of super-consumption had overtaken the marketplace. In that new environment, indigenous people had been forced to leave lands with no hope of competing. The world had destroyed traditional agriculture and ignored indigenous technology. It was shocking that speakers today had mentioned produce excesses in the North, while literally billions of people were starving in the South.

The Secretary of State of Environment, Food and Rural Affairs of the United Kingdom said it was important to recognize regional variations in problems of productivity. Overall, it was essential to ensure land tenure, and improve access to credit and financial markets and services for small farmers. There was a need to get food that had been produced to markets at the international, as well as local, levels.

The Minister of Agriculture of Equatorial Guinea said it seemed like countries of the South had been making the same appeals for the past 30 years and still hunger, malnutrition and poverty prevailed. He was beginning to get the feeling, therefore, that development plans were consistently being built on an erroneous premise -- one which appeared to be anti-development. What was clear was that agriculture was a way of life in the South affecting everything from water and electricity to education and sanitation.

The Secretary of Agriculture and Forests of Australia said his country was strongly opposed to overproduction and trade-distorting policies. Still, it was important to recognize that there were a few relatively modest or "good" subsidies which focused on research and development, marketing and information dissemination, community planning -- facilitating self-reliance and building capacities of farmers in small communities.

The Minister of Youth, Environment, Hygiene and Public Health of Senegal said perhaps 100 per cent of the people of the country were in some way dependent on agriculture. So, when Senegal's agricultural machinery worked, things were fine, but when it didn't the country could come to a standstill. Natural disasters and desertification were just a few of the risks facing the country. He appealed to the international community to put in place mechanisms that would allow developing countries to support their farmers. Such mechanisms would in turn be critical to ensuring some success in the battle against poverty and hunger.

South Africa's Minister of Agriculture and Environment said it was impossible to overstate the importance of agricultural research and land reform schemes, particularly land rights for women. Strategies to mitigate natural disasters, particularly by improving early warning systems, were also important. She said the issue of market access remained a challenge for developing countries. In all this, enhancing the role of farmer organizations was critical.

A representative of business and industry said the business community had the resources, skills and knowledge to address many of the issues that had been discussed today. She believed that building networks with non-governmental organizations and governments could provide hope, particularly for small rural farmers who were often marginalized in the current market economy. It was important in that regard to promote synergies and strategic partnerships with indigenous communities. Operating at the grass-roots level, local business had specific knowledge that could ensure that targeted business plans were created.

The representative of the European Commission asked two questions: what kind of policies could developing countries pursue to improve productivity? and what sort of assistance could be given to developing countries to that same end, while achieving objectives of market access and resource sustainability? He said new trade rules were the bridge that could lead to answers and, most importantly, set a framework through which governments in both the North and South would set their policies in the future.

In closing comments, Mr. SANCHEZ said that the Summit could be a historical turning point, because there was obvious consensus that agriculture was important in the developing world and an engine for growth. It could also be a missed opportunity. What could be done to assist the 800 million who went hungry? It was necessary to improve agricultural production in developing countries. Everyone knew how that could be done. It was important to leave the Summit with a commitment that agriculture was crucial for sustainable development.

There was no time to relax on the agriculture track, added Mr. SWAMINATHAN. The livelihood of small farmers required improvements in agricultural production. Attention must be paid to women and young farmers and on building institutional capacity. "We must roll back hunger." There was no excuse for hunger in today's world. In the longer term, trade should serve to strengthen the livelihood of the poor and not erode their livelihood.

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