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Agricultural trade and global justice

Ricardo ParelladaUniversidad Complutense

Resumen

Se ofrecen primero datos sencillos sobre reglas eimpuestos comerciales que tratan a distintos pases deforma muy desigual, en particular en el terreno agrcola.

A continuacin se muestra que, a pesar de la sencillez dealgunos de esos ejemplos, es preciso un conocimientotcnico y emprico slido para orientarse en la compleji-

dad de estos fenmenos. Y se concluye que la perspectiva

de la justicia global es relevante para las consideraciones

de economa y poltica internacional, siempre y cuandolas aportaciones filosficas cuenten con suficiente infor-macin inter-disciplinar.

Palabras clave:comercio agrcola, justicia global,

Poltica Agrcola Comn, subvenciones.

Abstract

First, I offer simple data about commercial rulesand tariffs that are very unequal for different countries,particularly in agriculture. Next, I argue that, despitethe eloquence of these examples, deep technical exper-tise and empirical knowledge are necessary for a fullerunderstanding of these issues. Finally, I argue that theperspective of global justice is indeed relevant for inter-national economics and politics, but only if it takes intoaccount relevant inter-disciplinary data.

Keywords:agricultural trade, global justice, Com-mon Agricultural Policy, subsidies.

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398 Agricultural trade and global justice

On May 16, 2007, a British farmer, Mr. Nigel Jo-hnson-Hill, from Liphook, Hampshire, addressed anextraordinary letter to Mr. David Miliband, Secretaryof State of the British Department of Environment,Food and Rural Affairs (DEFRA).

Dear Secretary of State,

My friend, who is in farming at the mo-ment, recently received a cheque for 3,000from the Rural Payments Agency for not rea-ring pigs. I would like to join the not rearingpigs business.

In your opinion, what is the best kind offarm not to rear pigs on, and which is the bestbreed of pigs not to rear? I want to be sure Iapproach this endeavor in keeping with all go-vernment policies, as dictated by the EU underthe Common Agricultural Policy. I would pre-fer not to rear bacon pigs, but if this is not thetype you want not rearing, I will just as gladlynot rear porkers. Are there any advantages innot rearing rare breeds such as Saddlebacks orGoucester Old Spots, or are there too manypeople already not rearing these?

As I see it, the hardest part of this progra-mme will be keeping an accurate record of howmany pigs I havent reared. Are there any Go-vernment or Local Authority courses on this?

My friend is very satisfied with this busi-ness. He has been rearing pigs for forty yearsor so, and the best he ever made on them was1,422 in 1968. Tat is until this year, whenhe received a cheque for not rearing any.

If I get 3,000 for not rearing 50 pigs, willI get 6,000 for not rearing 100?

Mr. Johnson-Hill went on with a few more te-chnical questions about not rearing pigs, and alsoexpressed his interest in the not growing crops andnot milking cows businesses.

I believe this sort of irony or even sarcasm not

to be inappropriate. I believe it presents crudely adifficult issue with deep implications for human de-

velopment and global justice: the legitimacy or outra-geousness of rich countries agricultural subsidies andprotectionism.

In this paper, I want to do three things. First, Ipresent some examples of rich countries protectionistmeasures. Second, I refer to the view of internationalinstitutions, such as the UNDP or the World Bank,which argue these rules to be deeply unjust. Finally, Imention contrary opinions and argue that it is essen-tial to take an ethical perspective on these issues, butalso that the viewpoint of ethics and global justice cannot offer much political guidance without a technical

and effective consideration of complex empirical dataand information.

1. Agricultural subsidies

A. Import tariffs. e guiding principle seems tobe: e poorer you are, the more you pay.Tariffs imposed by rich countries on poorcountries are, on average, four times higherthan those rich countries lay on one another(UNDP, 2005). at is a striking upside downtax progressivity.

For example, why does delicious chocolatecome from Switzerland and Germany? Isit because cocoa beans grow in the Alps orthe Black Forest? No, sir. It is because tariffsimposed on cocoa beans range between 0%and 9%, whereas tariffs enforced on elaboratechocolate amount to 30%. Silly countries growcocoa beans, and clever countries manufactu-re it.

B. Subsidies. e guiding principle seems to read:e richer you are, the more you get paid. Asit is well known, almost half of the EU budget

goes to the CAP (Common Agricultural Po-licy). But worse still, distribution of subsidiesis more unequal than distribution of incomein the most unequal countries on earth, suchas Brazil (UNDP, 2005). is can be clearlyshown with the Gini indexes. In Europe, 75%of resources goes to 10% of farmers, most ofwhich happen to be the richest. In the US,only 40% of farmers are subsidized, and 5% ofthem get 50% of the money. In Spain, subsidiesindependent of production benefit greatly therichest landowners, such as the duchess ofAlba.

Do you know why in Spanish cafeterias andrestaurants there are saltcellars, but no sugarbowls? Why does sugar come in individualtiny envelopes so that we can throw away whatwe do not want? Well, because this way a lotmore sugar is consumed. Well, yes, becausethe EU has paid European producers untilrecently four times the world prize, and hasimposed on foreign sugar an entry prize thatis higher than the European guaranteed prize.

You say this is changing? We shall see. In orderthese changes not to be too dramatical, thenext change in regulation is planned for 2050.

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400 Agricultural trade and global justice

financing requirements for achieving the MDGs inareas such as education, health and water. Adding in-sult to injury, the subsidies in rich countries not onlydivert resources but also reinforce rural poverty inpoor countries. Industrial countries are locked into a

system that wastes money at home and destroys live-lihoods abroad. When it comes to world agriculturaltrade, market success is determined not by compa-rative advantage, but by comparative access to subsi-diesan area in which producers in poor countriesare unable to compete (UNDP, 2005, 129 s.).

To quote another revolutionary institution:

Inequities in the trade arena are well known: richcountries protect their markets with tariff and nonta-riff barriers on the goods that poor countries producemore advantageously (such as agricultural produce

and textiles). Tey provide handsome subsidies totheir farmers, subsidize their exports, and discoura-ge value-added processing in developing countries.Reducing such protection and subsidies would have abeneficial impact on world trade, growth, and povertyreduction (World Bank, 2006, 210).

Some politicians and government officials (mainlyfrom countries which benefit greatly from abundantPAC cash, such as France or Spain) still defend thePAC openly. Tey talk of solidarity, good manage-ment and transparency. But curiously enough, when

they go into any details, they usually refer to the gooddirection of recent reforms, such as suppressing sub-sidies that distort markets and export subsidies thatlead directly to dumping. Tese officials probablyforget that these shy reforms (that they consider po-sitive) are usually introduced with great difficultiesand despite heavy opposition of their own countries,and only thanks to hard work by some Northern Eu-ropean countries.

But even these reforms still call for comment. eEU classifies products that are eligible for subsidies

in three categories: orange box, blue box and greenbox. Products in the green box are supposed not todistort markets. But who says they do not? Internatio-nal agencies? e WTO? No, sir, the EU itself (UNDP,2005, p. 133). Needless to say, the green box graduallygrows thicker and thicker at the expense of the otherboxes. As for export subsidies, most internationalinstitutions called for their complete suppression in2007, but rich countries have only agreed to put aslow end to them by 2013.

3. The viewpoint of global justice

Following the lead of John Rawls, contemporarytheories of justice usually apply to the political andeconomic structure of a state. ese are theories of do-

mesticjustice. If we consider that the basic rules andstructure of a state are just or unjust because of theireffects not only on citizens of that state, but also onforeigners and other states, we step form domestic toglobaljustice (Follesdal and Pogge, 2005, 8). Amongthe favorite examples of unfair regulations from aninternational point of view are, precisely, rich countryagricultural subsidies, which are intended to benefitfarmers of these countries, regardless of their devas-tating effects on farmers in very poor countries. If webelieve that our idea of justice should be somehowbroader than our countries borders, then we will haveto take into account the lot of these people, despite thedifficulty of dealing with very powerful agriculturallobbies in our own countries.

And yet, the fact that rich country agriculturalsubsidies have pernicious effects is not undisputedamong experts. Matthew Lockwood, for instance,is an independent expert who has worked both inacademia and NGOs. In his e State eyre In: AnAgenda for International Action on Poverty in Africa,he argues that internal factors to African states are

much more decisive for development than externalones. He stresses that, in particular, the removal oftrade barriers imposed by rich countries on agricul-tural goods would not make a big difference (Lockwo-od, 2006, chapters 1 and 3).

Aer having quoted extensively the UNDP andWorld Bank on agricultural trade, I wanted to bringup this instance of a contrary view in order to raisea worry about the viewpoints of philosophy and glo-bal justice. What could the discourse of global justicepossibly add to expert discussions about the effects

of different policies in the lot of the poor? As a per-son trained in philosophy, and interested in justice ingeneral and global justice in particular, I personallyfind it frustrating, when philosophy relies just on phi-losophy for these matters. I believe it to be absolutelynecessary to take into account technical informationand expert knowledge on issues about which, withoutthis knowledge, the discourse of justice alone does notseem to me to take us very far.

Development experts offer few certainties. I justwant to mention two. First, there is no single road to

development and prosperity for all peoples on earth.Policies intended to protect weak and underdevelo-ped economies should be respected. Tese policies

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sometimes prevent exports of basic goods, such asfood, and other times impose tariffs on imports ofbasic products, in order to protect the local economy.Early imposed liberalization has ruined small eco-nomies, whereas changing and wise protection has

made possible for some countries to strengthen theireconomies before opening them to world markets,particularly in Asia (Stiglitz, 2002). Second, despitesome controversy, it seems that rich country agricul-tural protectionism heavily harms farmers and theeconomy in general of many poor countries. Of cour-se, there are many more important factors into tradeand development. But, if rich countries want to beserious about world hunger, they cannot continue todissociate aid and agricultural policies.

References

F, A. T P (2005), Introduc-cin, en A. F. and T. P. eds., Real world justice:grounds, principles, human rights, and socialinstitutions, Springer, Dordrecht.

L, M. (2006), The State Theyre In: AnAgenda for International Action on Poverty inAfrica, Intermediate Technology Publications,Warwick, UK.

S, J. (2002), Globalization and its Discontents,Norton, New York and London.

UNDP, Human Development Reports, since 1990.

W B, World Development Reports, since1978.