For long, farmers in rich countries -- the United States, Europe and Japan -- have received hundreds of billions of dollars in subsidies annually from their governments. They need these subsidies to keep themselves in business, because these farmers -- agribusinesses really, not the sort of down-home hardy folks one romanticises about -- are among the least competitive members of that profession anywhere in the world. The World Trade Organisation estimates that 60% of their incomes actually come from these generous hand-outs, and not from selling their produce in global markets.
The trouble with these subsidies is that while they have kept a few people in abundant comfort in developed countries, they have also made it nearly impossible for millions of Third World farmers -- and the even more numerous agricultural workers they employ -- to compete for business in world markets Those suicides you have been reading about in places like Anantapur aren't random tragedies; they are fairly well connected to this rigged system of agricultural trade that supports the prosperity of a few to the detriment of many.
Now, some of that may be about to change. Not because the United States or any of the other nations has decided to finally try fair trade instead of its fantasy version of free trade, but because the fantasy just got exposed for what it is. The WTO, responding to a petition from the Brazilian government, recently ruled that subsidies given to American cotton farmers violate its free trade rules. The US has opted to appeal this ruling, but since the WTO rarely overturns anything on appeal, it is broadly understood that the appeal is simply a delaying tactic in an election year, to put off the inevitable. And if this ruling stands, we will almost certainly see plenty of other lawsuits arguing that all sorts of other subsidies should be disbanded as well.
Translation for farmers in America and elsewhere: roll up your sleeves, it's time for some real work, instead of feeding off the dole. Kudos to the Brazilian government; it is the only administration of a developing nation that appears to back its own interests rather than toe the lines laid for it by the big powers. On visas, IMF loans, and now WTO rules, President Lula da Silva's government has shown far more spine than countless third world leaders have mustered up in half a century. The Indian government would do well to take note.
Certainly, the United States and other countries will find a way around this; usually some collection of tinpots and weak-kneed sellouts from other nations can be assembled to pass pretty much anything the US wants in international bodies. Nonetheless, the WTO ruling, one hopes, will temporarily silence the shrill rhetoric over the outsourcing of white collar jobs from the West to places like India. At the very least, now the United States must change strategy. It was always well known that the farming subsidies are a gross violation of fairness in trade, and that they destroy millions of livelihoods in poorer countries. But trade negotiators in the developed countries were not about to erase them without extracting a price. Which partly explains all that noise over the relatively minor phenomenon of outsourcing. What
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