Tuesday, March 13, 2012


There is widespread impression that the globalization of food trade is heavily slanted in favor of large industry conglomerates leaving out the small and medium scale players. It is forgotten that most developing countries depend heavily on micro, small and medium scale enterprises for wealth generation and food production and progressively new global trade policies forced on developing countries are marginalizing these players affecting seriously the employment generation, land productivity and growth of agriculture sector to a very significant extent. Developing world has to thank Philippines for raising this issue at international forums and seeking appropriate re-prioritization of WTO policies and programs. Following excerpts reflect the concern of this country which is common to other similar developing nations.

"According to Domingo, the institutionalization of such framework is very important given that developing countries are comprised mainly of SMEs and poor small farmers whom he said, "are most vulnerable to market uncertainties and who would most benefit from a harmonized trading system and open and fair markets." Statistics show that as of 2009, there are 780,437 business enterprises operating in the Philippines. Of these, 99.6% are micro, small, and medium enterprises (MSMEs) and the remaining 0.4% are large enterprises. MSMEs generated a total of 3,595,641 jobs in 2009 versus 2,094,298 for the large enterprises. This indicates that MSMEs contributed almost 63.2% of the total jobs generated by all types of business establishments that year. MSMEs account for 25% of the country's total exports revenue. It is also estimated that 60% of all exporters in the country belong to the MSME category. MSMEs are able to contribute in exports through subcontracting arrangement with large firms, or as suppliers to exporting companies. Poor small farmers meanwhile mainly comprised the Philippine agricultural sector. The agriculture sector accounts for about 35% of total employment, but only contributes 15% of gross domestic product in 2009, Domingo said. Another area gaining more relevance for developing countries like the Philippines is "food insecurity." Domingo called on WTO member-countries to craft agreements and policies "that will provide support system to its farmers including an appropriate trade and non-trade policy environment that is conducive for their survival, and for food security." "While food aid and trade play roles, there is no substitute to bringing investments back to developing countries for productivity and greater production to meet the ever growing demand for food," he said.

In India agriculture is largely controlled by small farmers with average land holding just two acres in size and by western standards this is not a viable size for survival. Though GOI is trying to change land policies in favor of large holdings, it may take years before there is any consolidation of land in the country. There are vexing issues like fast urbanization, increasing diversion of agricultural land for industry and real estate conglomerates, landless labor, heavy dependence of agriculture on rains, stagnation of food production, all linked together and any long term solution must keep these factors in focus. Added to this India is still to come up with a national sustainable agriculture policy, all efforts made being ad hoc in nature. Unless there are clear perceptions regarding the role and fate of small and micro scale players, India cannot be in a position to fight in WTO forum for protecting the interests of this important sector.


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