Environmental Engineering Reference
In-Depth Information
leaving unsolved the complex questions of food rights, economic development, social
responsibility and environmental stewardship.
All of this ignored the fact that the 'invisible hand' metaphor does not work in agri-
culture. Income elasticity for food doesn't allow for expansion of demand as prices drop.
On the supply side, aggregate crop output changes little with price because farmers use all
their productive capacity all of the time and cannot in
uence prices. Summarizing, the
current policy based on the false premise that we need to let markets operate freely is
unsustainable and should be replaced by adequate supply management policies (Ray
2004; Ray et al., 2003).
Since 1996, world prices for America's chief farm exports have plunged more than 40
percent, but US crop exports did not increase (Ray, 2004). This led to dramatic losses in
farm income and increases in government payments to farmers. This spelled trouble for
small producers in developing countries as dumping practices destroyed markets, impov-
erished rural communities throughout the world and bene
fl
fi
ted vertically integrated
agribusinesses. This is why the di
erence between consumer prices and the price that pro-
ducers receive is out of any reasonable proportion.
The system that the URAA helped enshrine must be drastically redesigned. In the
ff
rst
place, developing countries must have the right to use quantitative restrictions (QRs) as a
protection from dumping practices and to de-link their key strategic sectors from the par-
adigm of the URAA. These QRs are compatible with WTO and are recognized by Article
XVIII of the original GATT. Safeguards should also be made available for developing
countries.
Because global agricultural trade is in disarray, a radically new approach is required.
We must replace the old system based on the URAA's naïve illusion concerning free
markets with a sound institutional and legal framework that blends sound supply man-
agement policy measures with adequate support mechanisms in developing (and devel-
oped) countries. The world needs adequate crop prices that contribute to a healthy and
vigorous worldwide agricultural sector (Ray et al., 2003).
A new institutional arrangement, perhaps a new framework convention, needs to tackle
the issues of sustainable agriculture, biodiversity, food security and access to genetic
resources, not on a piecemeal basis, but in one single undertaking in order to reconcile
the objectives of food security and responsible environmental stewardship. The new con-
vention should restate the fundamental right of nations to defend themselves from
dumping practices and from the market distortions brought about by the concentration
of corporate power. Countries would be allowed to determine the level of support to
their domestic producers and be subjected to trade-distorting disciplines explicitly
de
fi
ned in this agreement. Support systems should not be considered as
a priori
market-
distorting.
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Commodity agreements, intellectual property and investment
Over the past century, real prices of primary products experienced a signi
cant declining
trend (Ocampo and Parra, 2003). The vulnerability of many countries relying on a few
basic products for exports puts undue pressure on people and the environment.
International commodity agreements (ICAs) can help reverse this trend and increase
market transparency in agricultural trade. In the past, UNCTAD's mandate was to use
ICAs to arrest the deterioration of terms of trade and to stabilize markets whenever there
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