China and India sift fiction from fact in food myths

Deep K Datta-Ray, Straits Times 4 Aug 08;

FROM the ashes of the failed World Trade Organisation (WTO) talks has risen a new arena for Sino-Indian cooperation.

For the second time in recent history - the first was over the issue of global warming - India and China, which once fought a brief war against each other, have defied the West and forged a common stance on a vital issue: food.

They refused to accept a series of food myths disseminated by industrial-scale Western agri-businesses intent on undercutting the world's poorest farmers.

India scuppered their plans during the talks and inadvertently became the target of Western, especially American, fury. In the ensuing spate of emotional recriminations China matched India's stand and the official Chinese news agency Xinhua lambasted the 'selfishness and short-sighted behaviour' of wealthy nations.

At the centre of the collapse were two hypocrisies. First, it is not just the poor who protect their markets. The rich do so as well. Africa continues to demand that US subsidies to its cotton farmers be removed but this was not even discussed.

Second, while maintaining their own subsidies, Western countries demand that the global south drop trade barriers on food - especially cereal - products.

But doing so would mean that a billion subsistence farmers who cultivate, by hand, tiny plots and sell locally would have to compete with mechanised, subsidised and global Western companies.

The effects of Western agri- businesses exporting cereals to the global south would be catastrophic. Industrially produced grain would undercut subsistence farmers. Poor consumers would buy cheaper Western grain. It would put subsistence farmers out of business and destroy their only source of livelihood.

As an incensed Kamal Nath, India's lead negotiator, said: 'The most important thing was livelihood security, the vulnerability of poor farmers, which could not be traded off against the commercial interests of the developed countries.'

Another unacknowledged benefit of the south's barriers is that they help protect the environment. The West wants the global south to lower its food barriers because there are large profits to be made. But making them would entail shipping vast amounts of grain. This would translate into a huge increase in sea-borne traffic and pollution.

Meanwhile, free traders suggest that it is commonsensical for cheap, subsidised and mechanised Western grain to be shipped around the world as an antidote to rising food prices. After all, the West undercutting subsistence farmers would subsidise the world, they claim.

The idea rests on another myth - that food price rises are due to newly prosperous Asia's insatiable appetite for meat. It has supposedly led to an explosion in livestock farming and a corresponding increase in demand for feed which ultimately drives up grain prices.

In fact, India's demand for wheat is growing by just 2 per cent a year and China will require the same amount of wheat next year as it did three years ago.

Rising food prices have little to do with Sino-Indian prosperity. The European Commission (EC) reported in April that the price of food products was increasing disproportionately to the rise in the price of the commodities used to manufacture them. Bread, for example, costs 10 per cent more now though the price of wheat increased by just 3 per cent.

The EC says that though energy, transport and labour costs have risen, 'it is possible that somewhere along the food chain someone may be doing well out of this. We are not drawing conclusions; we are just presenting facts'.

The EC's careful wording avoids assigning blame for what its own data suggests is profiteering. That itself might indicate the power of the profiteers.

However, it is self-evident that the target of the EU's report are the agri-businesses which organise the West's food supply and now want to extend their control to the rest of the world.

Combined efforts by India and China can stop it. The world's food supply is too important to be controlled by the producers, processors and distributors who make up the main players of Western agri-business.

The writer, an analyst of Indian affairs, is a doctoral candidate at the University of Sussex.