GENETIC RESOURCES, FOOD SECURITY AND RURAL DEVELOPMENT FOR SURVIVAL

Statement of Kristin Dawkins
The Institute for Agriculture and Trade Policy
Minneapolis, Minnesota, USA

TO THE AFRICA REGIONAL CONFERENCE ON GENETIC RESOURCES, FOOD SECURITY AND RURAL DEVELOPMENT FOR SURVIVAL

21-25 April, 1997
Addis Ababa, Ethiopia

INTERNATIONAL TRADE AND FOOD SECURITY

Good morning. I wish to add my thanks to our hosts: "Amaseganalu!" I also wish to compliment the Ethiopian government for its commitment to achieve food security and its very thoughtful Five-Year Development Plan.

However, I offer a word of warning. Some of the key provisions of this Plan could be considered "illegal" according to international trade law. For example, on page 11, the Development Plan says, "To help stabilize the market the government will also directly buy produce from farmers at fair prices when it becomes unduly cheap, and sell it also at fair prices when it becomes unduly expensive." Certainly, this is an essential policy for food security in a global market dominated by very low world prices resulting from the highly subsidized exports of the United States and Europe. And yet, the Uruguay Round of the GATT, the General Agreement on Tariffs and Trade, determined that each country must quantify in monetary terms all governmental support for agricultural production and then reduce it. The developing countries must reduce this support by about 13% over 10 years. So Ethiopia, over 10 years, would not be allowed to stabilize the market by this means.

Actually, there are three rules of the Uruguay Round that are particularly important to understand, because they eliminate essential tools of governments for achieving food security. Overall, they can be seen as a package designed simply to allow the United States and European Union to export more and more of their surplus agricultural production into developing countries. The reduction of domestic support programs is the first one.

The second one legalizes dumping. As you know, dumping is the sale of products in another country at prices below the cost of production. These low prices drive local farmers out of the market, because they cannot compete, and countries become dependent upon imports. It's worth noting that the low prices do not help out farmers at home, either; millions of U.S. farmers have been driven to bankruptcy by this low price policy, which simply helps the big trading companies to take over ever greater shares of the global market. In the Uruguay Round Agriculture Agreement, the industrialized country governments are required to cut back export subsidies -- 21% in terms of volume and 36% in terms of price. This sounds good, but actually, the negotiators were very clever.

Remember, the U.S. negotiator for the Uruguay Round Agriculture Agreement, appointed by President Ronald Reagan, was a career executive officer of the Cargill Company, probably the biggest grain trading company in the world. And if you recall the history of the Uruguay Round, its conclusion was delayed many times over several years because the U.S. and Europe could not agree on rules for agriculture. In the end, the U.S. and EU were negotiating alone -- without the participation of any other governments. When they finally reached an agreement, called the "Blair House Agreement" after the name of the building where they were working in Washington DC,the entire Uruguay Round was concluded in short order. And the agreement they had reached was to calculate these 21% and 36% reductions in subsidies according to 1986 levels, which just happened to be a year of record high subsidies. As a result, the U.S. has been able to continue subsidizing agriculture exports at very high levels. And U.S. exports have grown 40% since 1992! Very clever!

The third rule of the Uruguay Round which contradicts food security is the requirement that all countries import a minimum of 2% to 5% of all basic foods. In other words, no country is allowed to be food self-sufficient! Each country actually negotiated its own level of minimum imports, called a "schedule," and some developing countries succeeded in negotiating exemptions for staple foods -- but the general law prohibits self-sufficiency.

Developing countries were quite aware of the threats that these three rules presented to their agricultural systems, and managed to negotiate a back-up mechanism in case their fears were realized. This instrument is called "The Marrakesh Decision," referring to Marrakesh, Morrocco where the Uruguay Round was finalized. The Marrakesh Decision states that if the net food-importing least developed countries do suffer negative impacts as a result of the Uruguay Round Agriculture Agreement, they are entitled to some form of compensation and relief.

Yet in Singapore last December at the First Ministerial Meeting of the WTO, the World Trade Organization formed to implement the Uruguay Round, the industrialized countries refused to consider implementing The Marrakesh Decision. Even though the U.N. Food and Agriculture Organization had found that the least developed countries would suffer $10 billion worth of agricultural losses by the year 2000, and that at least $1.4 billion of this could be traced directly to impacts of the Uruguay Round, the International Monetary Fund argued that none of these economic losses could be blamed on the Uruguay Round. And so, the compensation and relief mechanisms of The Marrakesh Decision have not as yet been implemented.

Another area of major interest to the developing countries during the Uruguay Round negotiations, and of primary importance to food security, is that of intellectual property rights. In this case, the United States' negotiators were assisted by an "Intellectual Property Committee" consisting of 13 transnational pharmaceutical companies including Pfizer, Merck, Johnson and Johnson, and so on. Similar groupings of transnationals from Europe and Japan were also very involved.

Therefore, it is not surprising that the resulting Agreement on Trade-Related Aspects of Intellectual Property, known as the "TRIPs" Agreement, establishes new international law benefiting the transnational corporations. For example, the TRIPs Agreement requires all countries to provide patents or an "effective sui generis" system for plant varieties. (Sui generis means "of its own making.") This suggests that governments can create their own appropriate system to reward farmers and plant breeders for their intellectual contributions to the development of genetic resources; however, the term "effective" guarantees that the WTO will exercise its own political judgement over whether or not a sovereign nation's intellectual property laws are to be considered "effective" or not.

The industrialized countries' preference for patents is due to the fact that patenting allows private corporations to claim private monopolies over genetic resources for 17-20 years and even longer. Simply by manipulating the genetic structure of a plant, companies can claim an "innovation" and the right to exclude all others from utilizing that plant. In some cases, companies have claimed patents over entire species.

Of course, this trend creates significant problems, apart from the act of privatizing and monopolizing what has heretofore been a community resource. The incentive to develop transgenic species creates problems of biosafety risk. Patents also inhibit research, since scientists are encouraged not to share their work until after a patent has been secured in order not to share any of the potential financial benefits to their corporate employers. The high cost of establishing a patentable plant variety and the patent claim itself encourages huge monocultural plantations of the uniform variety, adding to problems of disease and genetic erosion.

Surely these problems suggest that patents are not supportive of the goals of the Convention on Biological Diversity -- the conservation and sustainable use of genetic diversity -- and indeed, are counter to these goals. Therefore, many non-governmental organizations around the world are arguing that there should be no patents on living material at all, and the sui generis clause of the TRIPs Agreement should certainly be understood to allow governments to exclude from patenting all genetic resources.

Likewise, many international non-governmental organizations are proposing an initiative within the auspices of the United Nations to protect food security from the norms of international trade. A U.N. Convention on Food Security could insist that sovereign nations have the right to exclude staple foods from the provisions of the Uruguay Round Agreement on Agriculture -- a provision which would permit Ethiopia to implement the market stablization scheme on page 11 of the Development Plan. A U.N. Convention on Food Security could also support the establishment of local and regional reserves of basic grains, to insulate communities and regions from the extreme volatility of the global market and help in times of food insecurity.

Fortunately, both the TRIPs Agreement and the Agriculture Agreement of the Uruguay Round must be reconsidered. The TRIPs patenting clause must be reviewed in 1999, and the Agriculture Agreement must be renegotiated by the year 2000. Therefore, I am not so hopeless about the problems I have presented in this talk, and believe that the growing awareness of both civil society and governments regarding the impact of the Uruguay Round on food security will lead to the negotiation of appropriate solutions that protect and promote genetic diversity, preserve the livlihoods of smallholder farmers, and ensure food security.

Thank you very much.