The Threat To Third World Farmers

The Threat To Third World Farmers – World Trade Organization

Vandana Shiva

Two WTO agreements are seriously undermining agricultural livelihoods, and biological and cultural heritage in the developing world.

Economic globalisation, as promoted by the World Trade Organisation, is a planned project of exclusion that siphons the resources and knowledge of the poor of the South into the global marketplace and strips people of their life-support systems, livelihoods, and lifestyles. Global trade rules, as enshrined in the WTO’s Agreement on Agriculture (AOA) and in the Trade Related Intellectual Property Rights (TRIPs) agreement, are primarily rules of robbery, camouflaged by arithmetic and legalese. In this economic hijack, the corporations gain, and people and nature lose.


Agriculture is still the primary source of livelihood for three-quarters of humanity, and is as much a cultural activity as an economic one. The AOA is a rule-based system for trade liberalisation of agriculture that was pushed by the United States and its global agribusiness corporations. Its effect is to impose global competition on the domestic farm sector, undermining the viability of small farms that are unable to compete with cheaper imports. As a result, it will drive millions of small farmers off the land and ensure that agriculture is controlled by global corporations. In so doing, it will constitute the biggest refugee creation programme in the world.

There are three components to the AOA: Domestic Support; Market Access; and Export Competition.

Domestic Support

The WTO clauses on Domestic Support demand that developed countries reduce domestic ‘support’ to producers by 20 per cent of 1986-88 levels by 1999. For developing countries, this has been reduced to 13 per cent to be implemented over ten years.

There is a false assumption that this will make small farmers and the Third World more competitive and lead to prices that reflect the true cost of production. This is not true for a number of reasons. The articles on Domestic Support target only a small fraction of subsidies in agriculture. Additional subsidies enjoyed by global agribusiness and trading interests, such as subsidies for investment, fertiliser, marketing, and infrastructure, meanwhile, are all exempted.

Also exempted are direct payments to support the incomes of farmers. This has allowed the US government, for instance, to announce in June 2000 a $7.1 billion increase in direct payments to US farmers. In contrast, the incomes of Third World farmers are derived from production and trade, not from direct income support from governments. Third World farmers, therefore, will be at a real disadvantage: vulnerable to changes in global trade patterns and international prices of agricultural commodities.

Market Access

The WTO agreement on the import of food is entitled Market Access. All signatory countries must convert quantitative restrictions and other non-tariff measures into ordinary customs duties. Countries have to provide minimum market access to imports, beginning with one per cent of the domestic consumption in the first year of the implementation period, to be increased in equal annual installments to two per cent at the beginning of the fifth year, and four per cent after that.

Developing countries must reduce customs and other duties on imports by 24 per cent to facilitate imports at cheaper prices. Quantitative restrictions on imports of agricultural commodities must also be removed.

As a result of such measures, according to the UN’s Food and Agriculture Organisation (FAO), Africa’s food import bill will go up from $8.4 billion to $14.9 billion by 2000. For Latin America and the Caribbean, the value of increased imports will be $0.9 billion. For the Far East, the import bill will increase by $4.1 billion. For the Near East, the import bill will increase to $27 billion by 2000. The impact on small domestic farmers will be severe. To meet the minimum access requirement of the WTO, the Philippines, for example, will have to import 59,000 metric tonnes of rice, which would lead to the displacement of 15,000 families annually.

Export Competition

The section of the AOA entitled Export Competition constitutes the official justification for the AOA; namely the removal of export subsidies that have facilitated the sale of large European Union and US surpluses on the world market. Accordingly, developed countries are committed to reducing the volume of subsidised exports by 21 per cent, and the expenditure on subsidies by 36 per cent, both over a six year period (1995-2000). For developing countries, the reduction commitments are 14 per cent and 24 per cent for volume and expenditure respectively, while the implementation period lasts until 2004. Export bans are also precluded, even in years of domestic shortages.

While the liberalisation of exports was justified by the argument that Northern agricultural markets would open up to India, India’s exports to Europe have actually declined from 13 per cent to six per cent. One of the reasons for this is that high subsidies (totalling $14.5 billion) and protectionist barriers are still largely maintained in the North.

The export subsidies that are allowed to developing countries (to cover the cost of marketing exports of agricultural products, including handling, processing and the costs of international transport and freight) are not subsidies to Third World farmers or the poor, because farmers do not export, companies do.

Transnational corporations therefore gain both from Northern subsidies and Southern subsidies under WTO rules. Further, since the WTO was established, the United States has expanded export credit and marketing promotion programmes. Even IMF loans to Third World countries have been used for export subsidies to US agribusiness.

As Dan Glickman, US Secretary of Agriculture, has stated, “The main reason we have not lost more exports to Asia is because the [US Department of Agriculture] extended US $2.1 billion in export credit guarantees. Without IMF actions another $2 billion in agricultural exports would have been at great risk in the short term and far larger amounts in the long term.”

The 1996 US Farm Bill mandated $5.5 billion for export promotion. An additional $1 billion was granted for promoting sales to ’emerging markets’.

WTO rules are therefore for preserving and enhancing Northern corporate subsidies and withdrawing support to farmers and rural communities, whether they refer to Domestic Support, Market Access or Export Competition.

Need for a new paradigm

Protection of farmers’ livelihoods, food security, and sustainable agriculture requires major changes in the AOA. There should be a freeze on all further trade liberalisation of agriculture and on implementation of current rules. An exemption clause should be introduced in the WTO that allows countries to keep agriculture outside trade liberalisation. Export subsidies in all forms should be removed, including the disguised subsidies in export guarantee and credit schemes, investment, and transport. It is these that create the problem of dumping which destroys local markets and local livelihoods, not domestic support, which should be allowed, together with quantitative restrictions.

The protection of domestic agriculture must be recognised as a food security imperative. Trade cannot, and must not be made the highest objective governing food systems because this implies the rule of trading interests, which is the rule of global corporations that view food as a source of profits, not a source of life and livelihoods. Because their profits can grow only by destroying livelihoods and self-provisioning systems of food production, globalisation of trade in agriculture implies genocide. Putting up tariff barriers to genocide is therefore a moral imperative.


In addition to the AOA, the WTO threatens the interests of Third World farmers through the Trade Related Intellectual Property Rights (TRIPs) agreement. Introduced during the Uruguay Round of GATT, this agreement sets enforceable global rules on patents, copyrights, and trademarks, which extend to living resources, so that genes, cells, seeds, plants, and animals can now be patented and ‘owned’ as intellectual property. As a result, developing countries are being forced to reorganise their production and consumption patterns to allow monopolies by a handful of so-called ‘Life Sciences’ corporations. The TRIPs agreement provides living proof that the WTO does not reduce protectionism as its supporters always claim; it merely replaces protections for people and nature with protections for corporations.

History of intellectual property rights

To understand the flaws of TRIPs, it is important to know that this agreement essentially globalises western patent laws that historically have been used as instruments of conquest. The word ‘patents’ derives from ‘letters patent’ — the open letters granted by European sovereigns to conquer foreign lands or to obtain import monopolies. Christopher Columbus derived his right to the conquest of the Americas through the letter patent granted to him by Queen Isabel and King Ferdinand.

In the United States, the law has long ignored the pre-existence and use of inventions in other countries when granting patents. Thus, paradoxically, a legal system aimed at preventing ‘intellectual piracy’ is itself based on legitimising piracy. This system is codified in Section 102 of the US Patent Act of 1952 which denies patents for inventions that are in use in the United States but allows patents for inventions in use in other countries unless they have been described in a publication.

Introduction of TRIPs

During the Uruguay Round of the GATT, following intense lobbying by US corporations, the United States introduced its flawed patent system into the WTO, and thus imposed it on the rest of the world. TRIPs not only made intellectual property rights (IPR) laws global geographically, but also removed ethical boundaries by including life forms and biodiversity into patentable subject matter.

Living organisms and life forms that are self-creating were thus redefined as machines and artefacts made and invented by the patentee. Intellectual property rights and patents then give the patent holder a monopolistic right to prevent others from making, using, or selling seeds. Seed saving by farmers has now been redefined from a sacred duty to a criminal offence of stealing ‘property’. Article 27.3 (b) of the TRIPs agreement, which relates to patents on living resources, was basically pushed by the Life Science companies to establish themselves as Lords of Life. As a Monsanto spokesman said about the TRIPs negotiations: “The industries and traders of world commerce have played simultaneously the role of patients, the diagnosticians, and prescribing physicians”.

Three perversions of patents on living material: Ethical Perversion

This refers to the claim that seeds, plants, sheep, cows, or human cell lines are nothing but ‘products of the mind’ ‘created’ by Monsanto, Novartis, Ian Wilmut or PPL. Living organisms have their intrinsic self-organisation; they make themselves, and hence cannot be reduced to the status of inventions’ and ‘creations’ of patent holders. They cannot be ‘owned’ as private property because they are our ecological kin, not just ‘genetic mines’.

Criminalisation of Saving and Sharing Seeds

The recognition of corporations as ‘owners’ of seed through intellectual property rights converts farmers into ‘thieves’ when they save seed or share it with neighbours. Monsanto hires detectives to chase farmers who might be engaging in such ‘theft’.

Encouraging Biopiracy

‘Biopiracy’ is the theft of biodiversity and indigenous knowledge through patents. It deprives the South in three ways:

* It creates a false claim to novelty and invention, even though the knowledge has evolved since ancient times. Thus, biopiracy is intellectual theft, which robs Third World people of their creativity and their intellectual resources.

* It diverts scarce biological resources to monopoly control by corporations, depriving local communities and indigenous practitioners. Thus, biopiracy is resource theft from the poorest two-thirds of humanity who depend on biodiversity for their livelihoods and basic needs.

* It creates market monopolies and excludes the original innovators from their rightful share of local, national, and international markets. Instead of preventing this organised economic theft, WTO rules protect the powerful and punish the victims, In a dispute initiated by the United States against India, the WTO forced India to change its patent laws and grant exclusive marketing rights to foreign corporations on the basis of foreign patents. Since many of these patents are based on biopiracy, the WTO is in fact promoting piracy through patents.

Over time, the consequences of TRIPs for the South’s biodiversity and Southern people’s rights to their diversity will be severe. No one will be able to produce or reproduce patented agricultural, medicinal, or animal products freely, thus eroding livelihoods of small producers and preventing the poor from using their own resources and knowledge to meet their basic needs of health and nutrition. Royalties for their use will have to be paid to the patentees and unauthorised production will be penalised, thus increasing the debt burden.

Indian farmers, traditional practitioners, and traders will lose their market share in local, national and global markets. For example, recently the US government granted a patent for the anti-diabetic properties of karela, jamun, and brinjal to two non-resident Indians, Onkar S Tomer and Kripanath Borah, and their colleague Peter Gloniski. Yet the use of these substances for control of diabetes is everyday knowledge and practice in India. Their medical use is documented in authoritative treatises like the Wealth of India, the Compendium of Indian Medicinal Plants and the Treatise on Indian Medicinal Plants.

If there were only one or two cases of such false claims to invention on the basis of biopiracy, they could be called an error. However, biopiracy is an epidemic. Neem, haldi, pepper, harar, bahera, amla, mustard, basmati, ginger, castor, jaramla, amaltas and new karela and jamun have all been patented. The problem is not, as was made out to be in the case of turmeric, an error made by a patent clerk. The problem is deep and systemic. And it calls for a systemic change, not case-by-case challenges.

Some have suggested that biopiracy happens because Indian knowledge is not documented. That is far from true. Indigenous knowledge in India has been systematically documented, and this in fact has made piracy easier. And even the folk knowledge orally held by local communities deserves to be recognised as collective, cumulative innovation. The ignorance of such knowledge in the United States should not be allowed to treat piracy as invention.

The potential costs of biopiracy to the Third World poor are very high since two-thirds of the people in the South depend on free access to biodiversity for their livelihoods and needs. Seventy per cent of seed in India is saved or shared farmers’ seed; 70 per cent of healing is based on indigenous medicine using local plants.

The way forward

The implementation of TRIPs, therefore, should be immediately stopped and its review started. Countries should create domestic laws that protect indigenous knowledge as the common property of the people, and as a national heritage. US patent laws – including the anachronistic Article 102 that enables the US to pirate knowledge freely from other countries, patent it, and then fiercely protect this stolen knowledge as ‘intellectual property’ – must be redrafted to recognise prior art of other countries. This is especially important given that US patent laws have been globalised through the TRIPs agreement of the WTO. We must exclude patents on indigenous knowledge and trivial modifications of it, and create sui generis systems for the protection of collective, cumulative innovation. The protection of diverse knowledge systems requires a diversity of IPR systems, including systems that do not reduce knowledge and innovation to private property for monopolistic profits.

Nothing less than an overhaul of western-style IPR systems with their intrinsic weaknesses will stop the epidemic of biopiracy. And if biopiracy is not stopped, the every day survival of ordinary Indians will be threatened, as over time our indigenous knowledge and resources will be used to make patented commodities for global trade. Global corporate profits will grow at the cost of the food rights, health rights, and knowledge rights of one billion Indians, two thirds of whom are too poor to meet their needs through the global market place.

Patents on indigenous knowledge and uses of plants is an ‘enclosure’ of the intellectual and biological commons on which the poor depend. Robbed of their rights and entitlements to freely use nature’s capital because that is the only capital they have access to, the poor in the Third World will be pushed to extinction. Like the diverse species on which they depend, they too are a threatened species.


The centralised, undemocratic rules and structures of the WTO that are establishing global corporate rule based on monopolies and monocultures need to give way to an earth democracy supported by decentralisation and diversity. The rights of all species and the rights of all peoples must come before the rights of corporations to make limitless profits through limitless destruction.

The WTO rules violate principles of human rights and ecological survival. They violate rules of justice and sustainability. They are rules of warfare against the people and the planet. Changing these rules is the most important democratic and human rights struggle of our times. It is a matter of survival.

Vandana Shiva is a physicist, founder and President of the Research Foundation for Science Technology and Ecology, and one of India’s leading activists.

FAO: ‘WTO Marginalises Farmers’

A recent FAO study of the experience of 16 developing countries in implementing the Uruguay Round agriculture agreement concluded that: “A common reported concern was with a general trend towards the concentration of farms. In the virtual absence of safety nets, the process also marginalised small producers and added to unemployment and poverty. Similarly, most studies pointed to continued problems of adjustment. As an example, the rice and sugar sectors in Senegal were facing difficulties in coping with import competition despite the substantive devaluation in 1994” (FAO, 1999).

Land Loss, Poverty and Hunger

How World Bank, IMF and WTO Policies Undermine Small Farmers and Food Security

According to the free market ideology that governs the policies of the World Bank, IMF and the WTO, the best way to fight global hunger and improve the economic situation of farmers in developing countries is through trade and investment liberalisation, production for export, and cuts in domestic support. These policy changes, however, have severely undermined food security and the livelihoods of small farmers in developing countries.

In India, according to the Indian Government’s own estimates, over two million small and marginal farmers now lose their land or get alienated from it each year. The number of landless in rural areas has multiplied over the past few decades from 27.9 million in 1951 to over 50 million in the 1990S.

Many have ended up as daily-wage labourers for the Public Works Department, working on national highways, suffering from poisonous fumes, heat and dust, and earning less than a dollar for a whole days toil, having long sold off their precious cattle.

Hundreds of thousands of other displaced farmers have tried to find refuge in large cities like Delhi and Bombay, eking a miserable livelihood through piecemeal work away from their families. Others send their young children to work in factories or sell them as child beggars, or even sell their own body parts to make ends meet. And the situation is only set to become worse. According to the World Bank’s own projections, the number of people migrating from rural areas into the cities will soon exceed the combined populations of the United Kingdom, Germany and France.

Part of the reason for this trend can be traced to the impact of imports. In August 1999, for example, soybean and soy oil import policy was liberalised in India. As a result, subsidised imports of soybeans were dumped on the Indian market. These imports totalled three million tonnes in one year (a 60 per cent rise compared to earlier years) and cost nearly $1 billion. Within one growing season, prices crashed by more than two thirds, and millions of oilseed-producing farmers had lost their market, unable even to recover what they had spent on cultivation. Also destroyed was the entire edible oil production and processing industry. Millions of small mills have closed down.

Another reason for massive farmer-displacement is that food-growing land is being taken over from small farmers by an elite of large companies to produce cash crops such as flowers, or luxury commodities such as shrimps, for export. For those farmers that remain on the land, this corporatisation of agriculture has clearly increased poverty, locking them into a new form of bondage with unfair and unequal contracts that deprive them of the majority of the revenue generated by the exports. For example, farmers in Punjab who were contracted by Pepsico to grow tomatoes, received only Rs. 0.75 per kg while the market price was Rs. 2.00. Elsewhere, it’s even worse. For every dollar that a US consumer pays for a melon from El Salvador, farmers earn less than one penny, the winners being US-based shippers, brokers, wholesalers, and retailers.

The phasing out of fertiliser subsidies under IMF conditionalities and the increase in the price of farm inputs have also pushed a large number of small and medium-sized Indian farmers into bankruptcy. One result has been an epidemic of suicide among small farmers in India, desperate to escape the humiliation that comes with bankruptcy and indebtedness. In 1999, more than 500 cotton farmers from Andhra Pradesh, Maharashtra, Karnataka, Punjab and Haryana sacrificed their lives.

Removal of food subsidies in India, meanwhile, has led to a decrease in the amount of food purchased from the public distribution system. The off-take of rice declined from 10.1 metric tonnes in 1991-92 to 6.9 metric tonnes in 1995-96 and the off-take of wheat went down from 8.8 metric tonnes to 3.8 metric tonnes. And all while cereal exports have gone up from 1.4 per cent to 3.4 per cent.

The victims of free market dogma can be found all over the developing world. An estimated 43 per cent of the rural population of Thailand now live below the poverty line, even though agricultural exports grew an astounding 65 per cent between 1985 and 1995. In Bolivia, following half a decade of the most spectacular agricultural export growth in its history, by 1990, 95 per cent of the rural population earned less than a dollar a day. In the Philippines, as acreage under rice and corn declines and the area under cut flowers increases, 350,000 rural livelihoods are set to be destroyed.

Similarly, in Brazil during the 1970s, agricultural exports, particularly soybeans, (almost all of which went to feed Japanese and European livestock), were boosted phenomenally. At the same time, however, the hunger of Brazilians spread from a third of the population in the 1960s to two thirds by the early 1980s, Even in the 1990s, as Brazil became the world’s third largest agricultural exporter — the area planted to soybeans having grown 37 per cent from 1980 to 1995, displacing forests and small farmers in the process — per capita production of rice, a basic staple of the Brazilian diet, fell by 18 per cent.

The Mexican government, meanwhile, has put over two million corn farmers out of business over the past few years by allowing in imports of heavily subsidised corn from the United States. A flood of cheap imported grain has also driven local farmers out of business in Costa Rica. The number growing corn, beans, and rice, the staples of the local diet, fell from 70,000 to 27,000. That is the loss of 42,300 livelihoods. The same has taken place in Haiti, which the IMF forced open to imports of highly subsidised US rice at the same time as it banned Haiti from subsidising its own farmers. Rice imports grew from virtually zero to 200,000 tonnes a year, at the expense of domestically produced staples. As a result, Haitian farmers have been forced off their land to seek work in sweatshops, and people are worse off than ever: according to the IMF’s own figures, 50 per cent of Haitian children younger than five suffer from malnutrition and per capita income has dropped from around $600 in 1980 to $369 today.

Kenya, which had been self-sufficient until the 1980s, now imports 80 per cent of its food, while 80 per cent of its exports are accounted for by agriculture. In 1992, EU wheat was sold in Kenya at a price which was 39 per cent cheaper than that at which it was purchased by the EU from European farmers. In 1993, it was 50 per cent cheaper. Consequently, imports of EU grain rose and, in 1995, Kenyan wheat prices collapsed through oversupply, undermining local production and creating poverty.

Far from ending hunger and promoting the economic interests of small farmers, agricultural liberalisation has created a global food system that is structured to suit the powerful vested interests, to the detriment of poor farmers around the world.

By Anuradha Mittal.

Anuradha Mittal is the Co-Director of the Institute for Food and Development Policy, also known as Food First, in Oakland, California.

COPYRIGHT 2000 MIT Press Journals

COPYRIGHT 2001 Gale Group