GLOBAL FOOD CRISIS A RESULT OF TRADE IMBALANCE - ANGARA

NEW YORK - Speaking at the 16th Session of the UN Commission on Sustainable Development on the theme "International Agricultural Trade and Access to Markets", Senator Edgardo J. Angara today said that the growing food crisis is a long-term result of trade imbalance, and called for the elimination of export subsidies and reduction of domestic subsidies of rich countries.

"We have blamed the global food crisis on a confluence of factors: climate change, increased demand for food, rapid increase in the price of oil, and mandates for biofuel production. But looking deeper, this crisis is the culmination of long-standing imbalances between rich and poor countries in international agricultural trade," he said.

Angara cited substantial protectionism in rich countries as the root cause of skewed trade in agriculture.

"Developed countries forced us to open our markets to their industrial goods, while they kept their markets closed to our agricultural products with various mechanisms such as non-tariff barriers. In addition, contrary to WTO principles, they give their farmers huge subsidies, which developing countries cannot afford, thus creating an unfair playing field," said Angara.

Huge domestic support and export subsidies provided by developed countries to their farmers render developing countries' farm products uncompetitive. In 2005, the total subsidy to agriculture in OECD countries amounted to US$385 billion, more than double the Philippines' Gross National Product last year, and over US$ 1 billion a day.

"Developing countries like the Philippines cannot afford to provide its farmers the same subsidies that developed countries grant them. As a result of this unfair trade regime, developing countries are inherent losers. Since its launch, the World Trade Organization (WTO) turned many countries from net exporters to net importers," he said.

The Philippines, now one of the most vulnerable countries to the global rice crisis, was a net exporter of agricultural products pre-WTO membership. It enjoyed a trade surplus averaging at US$157 million a year from 1985 to 1994. Upon accession to the WTO in 1995, the country registered its first trade deficit in agriculture in a decade, and has never gotten over that slump ever since. Its export earnings grew 0.18% a year on average, while imports ballooned by 8.01% a year, with the trade deficit reaching US$1.53 billion by 2006

Developed countries' subsidies to their farmers have had a very serious impact on poor farmers in the Asia-Pacific region. Rice subsidies in the US, for instance, have affected rice farmers in Thailand, Viet Nam, and India. Corn subsidies have also driven prices down, affecting farmers in the Philippines and China. Soy subsidies have undermined the livelihoods of 2.5 million Indonesian farmers.

Angara, chairman of the Senate Committee on Agriculture and Food, is the only top Filipino government official invited to be a panelist at the conference. His co-panelists include Dr. Christ Leaver (Professor of Plant Science at Oxford University), Prof He Maochun (Agricultural trade expert, Tsing Hua University) and Dr. John Pender (Senior research fellow at the IFPRI Environment and Production Technology Division).

Angara authored the Agriculture ad Fisheries Modernization Act (AFMA) of 1997, a masterplan for agricultural modernization which other countries in Southeast Asia have adopted.