“Don’t worry about me, you must use all your effort to fight against the World Trade Organisation (WTO)” said Lee Kyung-Hae to a friend, before the 54-year-old farmer stabbed himself in the heart with a knife. He committed suicide over a year ago during the summit of the World Trade Organisation held in Cancun. Lee was protesting against European and American exports which are sold below the cost of production, a phenomenon known as “dumping”. The fall in prices caused by dumping has condemned millions of small farming communities, like Lee’s, to total poverty as they are unable to compete with heavily subsidised products. The WTO, rather than protecting the poorest countries from the policies of northern America, has recently ruled in favour of a policy of protectionism for richer countries, and of free market for poorer countries.
The following appalling examples highlight the use of these policies. According to data released by Oxfam International, the EU and the USA are responsible for half the exports of wheat sold at around 40% of the cost of production. Europe is the world's largest exporter of powdered milk, which is sold at 50% of the cost of production, and it is also the largest exporter of white sugar, which it sells at a quarter of its cost of production.
How does this effect development?
Dumping has devastating effects. The opening of Jamaican markets to imports of powdered milk, as ordered by the World Bank, has completely ruined local producers who can not compete with the heavily subsidised European imports. This practice, which has been repeated in each and every one of the world’s poorest countries, shows the incoherency of international support. For each dollar donated to lesser developed counties in the form of aid, these counties lose two dollars due to trade barriers placed by Western countries.
For example, after the disastrous floods in Mozambique in 2000, the EU donated 170 million euros. However, this gesture was hypocritical as they simultaneously flooded the sugar market with heavily subsidised sugar cane, ruining the livelihood of local producers who were unable to compete - despite producing the most cost effective sugar cane in the world. Furthermore, EU law forbids the importation of processed Mozambique sugar and reserves the rights and benefits of the refining process for European companies (such as Tate and Lyle in the UK, Sudzucker in Germany and Beghin in France) which already receive exportation subsidies worth more than 600 million euros.
Despite the split in European commercial policies, it may be that Lee did not die in vain as the desperate cry of the Korean farmer has perhaps speeded up the fight against dumping. After ruling that the American system of cotton subsidies was illegal, the WTO, in a historic statement, declared that EU sugar subsidies are over four times higher than the legal limit. Could this be the beginning of the end for dumping?
Economic liberalism has failed if one of its objectives is to help eradicate world hunger. The CAP’s model of intensive agricultural production entails progressive rural decline and the ruin of small producers. European society should pressurise its governments for a change in the CAP, with an emphasis on national food production: the right of the people to decide their agricultural policies without the current phenomena of dumping. This alternative to neo-liberal agriculture was developed by the Farming Movement Via Campesina, which first debated in the World Agricultural Summit in 1996. This movement is pushing for the removal of the powers of the WTO, which has proven itself to be totally inadequate when dealing with these issues. National food production gives priority to local production over imports, allowing countries to adopt protectionist anti-dumping measurers. It also provides public help and subsidies to farmers whose products are not destined for export. Moreover, this guarantees price stability on an international level through internationally agreed levels of production.
According to figures published by Oxfam International in Africa, if south-east Asian and Latin American countries were to increase their export levels by just 1%, the benefits would be enough to help remove over 128 million people from poverty. However, the reality is that, as the writer Uruguayo Eduardo Galeano puts it, “the subsidies received by each cow in Europe - more than two euros per day - is twice the amount of money that the average farmer in a third world country would earn per year.” A European cow earns more than an African. Does this fact perhaps not deserve international recognition?