Global Trade Mailing List Archive

["Ruchi Tripathi" <<address removed>>]

Developing country priorities and policies .... 

ActionAid believes that the removal of trade distorting subsidies will have a 
positive impact on world prices and reduce poverty; in the north, the evidence 
suggests that they would farm less intensively (thus reducing production) 
whilst in the South it would give a positive signal to producers (and increase 
farm incomes). But ActionAid is fully aware that there are net food supply 
implications for a number of different groups of people. The poorest urban 
households, which may be disadvantaged through old age or unemployed, will be 
affected by increases in food prices. Similarly those in rural households that 
are not themselves agricultural producers may also be affected. These impacts 
could possibly be minimised through three complementary factors:

*       The impact on consumers, NFIDCs and LDCs can be minimised through the 
overhaul and implementation of the WTO's Marrakesh Decision. This would oversee 
the creation of a revolving compensatory fund to cushion the impact of higher 
import bills.
*       The use of support mechanisms in developing countries to address the 
failure of the market to distribute affordable food to the poor (and the 
developed world should assist in these programmes).
*       Net consumers of food in the rural economies will be potential 
beneficiaries from higher prices as spill-over effects bring benefits - such as 
higher rural incomes.

But ActionAid also believes that further agricultural trade liberalisation at a 
global scale is only likely to be effective in reducing poverty if the 
following pre-conditions are met. The developed world and international donors 
should support developing countries to: 

1. Develop national strategies to address inequalities in access to productive 
and marketing resources, especially for women, and make them available on 
favourable terms. These include land, water, credit, inputs, market information 
and services, appropriate technologies and well as tackling supply side 
constraints (SSCs). 

2. Establish national policies to ensure that low-income producers and workers 
benefit from further trade liberalisation through the integration of trade 
policy with poverty reduction strategies, particularly in the agricultural 
sector. To this end there should also be a radical re-orientation of the use of 
conditionality so that it is reduces poverty. A review of Tanzania's PRSP 
reveals how some of these conditions are not being met. "In its substance, the 
PRSP represents a limited and short-sighted approach to Tanzania's development 
options which replicates the neo-liberal conditionalities of earlier structural 
adjustment policies". The PRSP prioritises budget allocations to social sector 
spending "at the expense of the longer-term structural issues like factor 
productivity, employment, the viability of small-holder agriculture and 
agro-industrial linkages".

3. Countries - particularly those in the developing world - should have the 
right to only open up their economies when they reach a certain degree of 
sophistication, complexity and competitiveness (just as many northern and 
Asian-tiger economies have done). In agriculture, given that some food crops 
are fundamentally important for food security, rural livelihoods and to combat 
poverty in developing countries, ActionAid believes that a number of self 
-selected products and crops should be exempt from agricultural trade import 
liberalisation and should have special safeguard mechanisms.

4. Establish policies that would bring developmental benefits from the opening 
up of market access, not only into developed countries by also at the domestic 
level. One issue is that SSCs are hindering the trade of products and services 
onto international markets but also more importantly for local and national 
markets. Trade reform and integration in this area would have a positive impact 
on poverty. The international community must ensure that policies are enacted 
to remove these constraints:

·        Inadequate transport, storage and marketing infrastructure; 

·        Weak legal and regulatory arrangements; 

·        Weak institutional and policy frameworks;

·        Unreliable provision of public utilities; 

·        Low labour productivity;

·        Technical issues relating to standards and rules of origin.

But ActionAid would also question whether current market access to northern 
markets truly works in favour of the poor and development. Production and trade 
is conducted, in the main by large companies and TNCs; these activities tend to 
be environmentally damaging, exclude small-scale producers (ie monocropping), 
have poor labour conditions, and traders tend to export raw materials for 
processing in the developed world. A more pro-poor agricultural model would:

*       Ensure that low-income and small-scale producers benefit from any 
widening of market access; 
*       Promotes more sustainable production and which prioritises local 
production for local consumption;
*       Add value in situ and the transfer of appropriate technology;
*       Devise methods of stabilising primary commodity prices at remunerative 
levels.

Tim Rice

Food Rights Policy Officer
ActionAid International UK
Hamlyn House 
MacDonald Road 
London N19 5PG 
Ph: 44 207 561 7560 

 


ActionAid's vision is a world without poverty in which every person can 
exercise their right to a life of dignity. Registered Charity No. 274467
www.actionaid.org.uk 

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