The WTO Bali-package and its effects on smallholders

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The WTO Bali-package and its

effects on smallholders

A stepping stone towards development for all or the

reaffirmation of the dominance of the global North?

Rijksuniversiteit Groningen

Faculty ofArts

Master thesisInternational Relations and International Organization–

International Political Economy

Rozemarijn Vermeulen / s1724401

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Declaration by Candidate

I hereby declare that this thesis, ―The WTO Bali-package and its effects on smallholders‖, is my own work and my own effort and that it has not been accepted anywhere else for the award of any other degree or diploma. Where sources of information have been used, they have been acknowledged.

Name: Rozemarijn Vermeulen Signature:

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Abstract

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4.3.1 Introduction ... 37 4.3.2 Domestic production ... 37 4.3.3 Imports ... 38 4.3.4 Relevant factors ... 39 4.4 Mali ... 40 4.4.1 Environmental causes ... 40 4.4.2 Socio-economic causes ... 40 4.4.3 Other causes ... 41 4.4.4 Summary ... 41 4.5 Uganda ... 41 4.5.1 Environmental causes ... 41 4.5.2 Socio-economic causes ... 41 4.5.3 Other causes ... 42 4.5.4 Summary ... 42 4.6 Zambia ... 43 4.6.1 Environmental causes ... 43 4.6.2 Socio-economic causes ... 43 4.6.3 Other causes ... 44 4.6.4 Summary ... 45

4.7 Causes and effect ... 45

4.8 Summary ... 45

5 The Doha Round ... 46

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5.2 Aftermath of the Uruguay Round ... 46

5.3 Doha Round negotiations ... 47

5.3.2 The role of developing countries ... 47

5.3.3 Participating countries ... 48

5.3.4 The course of the negotiations ... 49

5.4 The Bali-package ... 50

5.5 Effects of the Bali Package on smallholders ... 55

5.6 Summary ... 58

6 Comparison ... 59

6.2 Comparing the international context... 59

6.3 Comparing the negotiations... 59

6.4 Comparing the effects on smallholders in Least Developed Countries ... 60

6.5 Summary ... 60

7 Conclusion ... 62

7.1 Research question ... 62

7.2 Reflection... 63

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List of abbreviations

AMS Aggregate Measure of Support

AoA Agreement on Agriculture

ATC Agreement on Textile and Clothing

CAP Common Agricultural Policy

DDA Doha Development Agenda

DFQF Duty Free Quota Free

DSB Dispute Settlement Body

FAO Food and Agriculture Organization

FRA Food Reserve Agency

GATT General Agreement on Tariffs and Trade GATS General Agreement on Trade in Services

GDP Gross Domestic Product

GSP General System of Preferences

IMF International Monetary Fund

LDC Least Developed Country

MC Ministerial Conference

MFN Most Favored Nation

OECD Organization for Economic Co-operation and Development

PCD Private Sector Development

S&DT Special and Differential Treatment

SSA Sub-Saharan Africa

TRIPS Trade Related aspects of International Property rightS

TPRM Trade Policy Review Mechanism

TRQ Tariff Rate Quota

UNCTAD United Nations Conference on Trade And Development

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1. Introduction

1.1 Problem definition

Trade improves welfare: this is the first lesson a student learns in a trade policy course. However, this is not automatically the case for everyone involved. The second lesson a student learns is that, although trade improves general welfare, there are always winners and losers. Historically, trade relations between developing and industrialized countries show exactly that; the distribution of benefits have been largely asymmetric. After the Second World War, trade relations have been affected by the multilateral General Agreement on Tariffs and Trade (GATT). They have been disproportionately beneficial to the industrialized countries, due to the fact that developing countries lacked power, negotiating skills and knowledge to effectively play the game (Wilkinson and Scott 2008). As the hegemony of the United States and the West in general has been declining facing new emerging powers, trade relations are beginning to reflect this shift; the needs and wants of emerging and developing countries figure more prominently than ever before on the global agenda (Anderson and Martin 2005).

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negotiations a sense of direction. Now, twelve years later, progress has been limited at best and WTO members have not been able to conclude the DDA at the recently held 9th Ministerial Conference in Bali.

Despite the limited progress that has been made, it can be argued that the inclusion of the concept of development in the trade round is a positive change of attitude in itself. If development is one of the primary objectives, the outcomes of the current trade round will at least be more conducive to growth in developing countries than was the case with outcomes of the Uruguay Round. For the losers in the globalization story, for instance the poor in the LDCs, this only has meaning if they experience an improvement in their livelihoods. However, since the conclusion of the DDA is still far away, at the WTO, all eyes have been on the Ministerial Conference at Bali where it was hoped some agreements would be signed. This hope has materialized and recently the so-called Bali-package has been presented by the DG Roberto Azevêdo.

1.2 Research question and sub questions

The goal of this research project is to understand to what extent the inclusion of the concept of development in the WTO negotiations actually means something for smallholders in agriculture in LDCs. Do the proposed measures facilitate development or do they obstruct it despite the initial ambition shown at the start of the round instead? In order to be able to reach a conclusion, the following research question will be answered:

―In what way and to what extent is the Bali-package in the WTO more likely to affect the development of smallholders in agriculture in LDCs than the Uruguay Round?‖

In order to be able to provide a meaningful answer to this question, the following sub-questions will be addressed:

1. ―What is the relation between the multilateral trading system, national development policies and smallholders in agriculture in LDCs?‖

2. ―How has the Uruguay Round gone and what outcomes with regard to agriculture did it produce?‖

3. ―How and to what extent has the Uruguay Round affected smallholders in LDCs?‖ 4. ―How and to what extent is the Bali-package expected to affect smallholders in

LDCs?‖

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1.3 Relevance

This research fills a gap in the academic literature. The Bali-package has been presented in December 2013, so no papers have been published on the topic so far. Furthermore, focus of existing literature is merely on possible outcomes of the DDA, including CGE-modelling to scrutinize effects on national economies. Research that deals with smallholders in agriculture in developing countries limits itself to the effects of liberalization of trade(Dorward, Kydd, and Poulton 1998; Morley 2006; Aniekwe 2010). The social relevance of this paper lies in the analysis of the importance of the multilateral trading system for the LDCs. The paper feeds into the discussion on whether it is useful for LDCs to expect significant gains from a WTO trade round or if they should better direct their attention to aid, regional integration or other means.

1.4 Thesis outline

In Section 2, the Multilateral Trading System, the national development policies, and the situation of smallholders in Mali, Uganda and Zambia will be introduced. Section 3 will deal with the Uruguay Round negotiations and outcomes. Section 4 will assess its effects on smallholders in the three countries under evaluation. In section 3, the participation of developing countries in the trade round will be scrutinized. Starting with a policy-oriented approach, looking at policy making and agreements, the section prepares for the bottom-up approach of the section that follows. The effects of the trade round on smallholders will be assessed based on the concepts of food security and poverty. Section 5 is structured in the same way as section 3 and 4 together. This time the trade round under discussion is the Doha Round that has yet to be concluded. Therefore, instead of analysing its outcomes, this research focuses on evaluating theBali-package for its impact on smallholders‘ lives and communities in the three countries mentioned before. In Section 6, the Uruguay Round and the Doha Round will be compared based on an assessment on the extent to which the developing countries actively participated in the trade rounds.In addition, the outcomes of both rounds and their effects on smallholders in Mali, Uganda and Zambia will be compared.

1.5 Limitations

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measured by assessing declining poverty rates and improving food security. In this thesis, the analysis is limited to the Agreement on Agriculture for the Uruguay Round and the topics relevant to agriculture that are at stake in the DDA and in the expected Bali-package because these are expected to affect smallholders in agriculture the most.

The countries that will be used to shed light on the reality ―on the ground‖ in African LDCs are Mali, Uganda and Zambia. These three African countries are all LDCs (UN-OHRLLS, par. 4) and share a strong agricultural backbone. At the same time they vary according to size, natural resources and economic performance.1 Additionally, it has been proven difficult to obtain reliable data on poverty and food security for some countries. For these three countries this is not the case, therewith permitting a solid research.

1.6 Definitions

The concept of a smallholder will be defined as expounded by Narayanan and Gulati (2002). They characterize smallholders as ―farmers (crop or livestock) practicing a mix of commercial and subsistence production or either, where the family provides the majority of labour and the farm provides the main source of income‖. This definition moves away from discussions about the size of the land, which is partially determined by the type of crop or by what is normal in the region.

The UN definition of LDC is being used in this research. Countries that fall into this category fulfill the following criteria(UN-OHRLLS, par. 2)

 Poverty (changeable criterion: three-year average GNI per capita of less than US $992, which must exceed $1,190 to leave the list as of 2012)

1_{Size (World Development Indicators 2013 2013)} Mali: 1 220 190 km2

Uganda: 199 810 km2 Zambia: 743 390 km2

Natural resources (“African Economic Outlook” 2013)

Mali: gold and cotton (accounting for 75 and 15 percent of export earnings)

Uganda: cocoa, coffee, cotton, flowers, fish, tea, tobacco and cement (together accounting for 40% of export earnings)

Zambia: copper (accounting for 80 percent of export earnings), cobalt, nickel, manganese, gold, gemstones, and several non-metal mineral resource

Economic performance (real GDP/capita growth in 2011) (“African Economic Outlook” 2013) Mali: +0,6 percent

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 Human resource weakness (based on indicators of nutrition, health, education and adult literacy)

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2 Multilateral Trading System, LDCs and the situation of smallholders

2.1 Introduction

This chapter aims at gaining a better understanding of why LDCs continue to lag behind in international trade and development. First, the multilateral trading system will be introduced. Second, the economies of the three countries under scrutiny will be briefly addressed. Finally, the chapter will give attention to the role of smallholders in agriculture in LDCs in development.

2.2 Post-war trade and development

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2000). The learning by doing and technological transfers that accompany exports could further make the sector more efficient. According to this model of export-led growth that it is better for economies to be open to trade than to be closed or protected(Bruton 1998). Trade thus gained in importance, eventually leading to the globalization of markets.

In the past 40 years, most of the African LDCs did not succeed in generating sufficient sustainable economic growth to be able to upgrade out of their LDC status. Notable exceptions are Botswana (1994), Cape Verde (2007) and the Maldives (2011) (UN-OHRLLS).Instead, African LDCs have become marginalized in the game of global trade(UNCTAD 2011a).

2.3 The Multilateral Trading System

In the years following the Second World War, many countries were in need of stability and rules regarding various areas of international relations. The destruction of Europe permeated the Western world of the notion that war should be avoided at all cost and by all means. The establishment of the United Nations is stems from this conviction. At the same time, the Second World War left the world with a trade environment that was destroyed. Barriers to trade were high and countries were afraid to trust eachother. The aspect of interdependence through trade was considered a means to ensure peaceful relations amongst nations. Therefore, the facilitation of trade was of the utmost importance.The history of what we nowadays call the World Trade Organization began in that context as one of the envisaged Bretton Woods institutions. During those years, efforts were made to create a multilateral agreement that would facilitate the reduction of barriers to trade (i.e. tariffs or quotas) and supervise international trade. These efforts culminated in the creation of the charter for the so-called International Trade Organization, but this charter was never ratified. However, an agreement on substantive matters was. The GATT was signed in 1947 and was supposed to enhance welfare for all contracting parties (GATT 1947) The agreement became a forum where parties could negotiate on international trade on a reciprocal and mutually advantageous basis. The main principles underlying the GATT (and later the WTO) were just that: the principles of non-discrimination (most-favored-nation (MFN) principle), reciprocity and transparency. Nevertheless, the International Trade Organization was never there to enforce it. The GATT thus retained the status of a provisional agreement(WTO 2013a).

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in manufactured goods. Decisions were taken by consensus or in some cases by voting The most notable topic that was not covered by the agreement, was trade in agricultural goods(GATT 1947). As a result, the agricultural policy of contracting parties was never subject to critical evaluation. There were many reasons for the exclusion of agriculture in the GATT. First of all, many countries followed a protectionist strategy to help farmers in the sector of declining economic importance to generate enough income. The reason for this is that farmers are often well represented in the political system (Sumner 2008). The United Statesfor example, put in place measures toregulate agricultural production by introducing the Agricultural Adjustment Act in 1933(Dimitri, Effland, and Conklin 2005). The European Union, then the European Economic Community, put in place the Common Agricultural Policy in 1963 (European Union 2013). Also, agriculture has always been a politically sensitive topic because countries always prefer to not be depending on others for their essential needs, especially in the case of food. Moreover, countries that would have benefited from liberalization in the agricultural sector were either not contracting parties, countries that just came out of war or newly independent countries. Therefore, on an international level no regulation existed with regard to the agricultural sector and the GATT rules existed with consideration of agricultural exemptions (Sharma 2000).

Trade in agricultural products has not been on the agenda until the Uruguay Round (1986-1994). Three aspects that affected trade in agriculture were addressed in particular: support for farmers, border protection and export subsidies. These negotiations were finalized with the draft of the Agreement on Agriculture (AoA). It should come as no surprise that the negotiations were long and difficult for all parties concerned. In addition, the outcomes did not quite please everybody(M. Khor 1997; Narlikar 2006; Ostry 2000; Finger and Nogués 2002).

2.4 Economies of Mali, Uganda and Zambia

2.4.1 Introduction

In this section the economies of the LDCs Mali, Uganda and Zambia will be introduced as to give the reader a general idea about the countries under scrutiny.

2.4.2 Mali

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also disposes of other mineral reserves, such as diamonds and uranium. Nevertheless, agriculture is still a major sector for the economy providing jobs for around 80 percent of the population. Mali‘s main export crop is cotton(―African Economic Outlook‖ 2013). Historically, the country has relied on its agricultural production and mining sector as the driving forces of the economy, despite the fact that 65 percent of the country consists of (semi)desert. The south, however, has a tropical climate.

Mali represents a success story for the international financial institutions. IMF and World Bank policies have contributed to an annual growth rate of 5 per cent between 1996 and 2010(―African Economic Outlook‖ 2013). During those years, Mali has tried to diversify exports and the economy in general away from minerals. Unfortunately. the military coup and the global financial crisis have put an end to this trend. Mali became a WTO member in 1995.

2.4.3 Uganda

Uganda is a small landlocked country in East-Africa. Its independence from Britain was achieved in 1962. Ironically, Uganda has all the ingredients a country needs to makefor a rich and prosperous country whereas the reality is that Uganda is still a LDC(UN-OHRLLS). It has substantial natural resources, fertile soil and its climate is suitable for the cultivation of a variety of crops. Uganda has some mineral reserves but generates export revenues from trade in coffee, tea and fish amongst other products.An important role is thus played by the agricultural sector. Indeed, the percentage of Ugandans involved in agriculture is 69 percent(IMF 2005).In 2012, the population of Uganda had surged to 35 million, making it one of the fastest growing populations in the world(―World Population Prospects: The 2012 Revision‖ 2012). In this situation, it is hard for economic growth to keep up with population growth.

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2.4.4 Zambia

Zambia is a landlocked country in Southern Africa. Since its independence from the United Kingdom in 1964, the country has been struggling with a variety of internal and external challenges. A colonial past, unrest in neighboring countries, problems with power supply and transportation, refugee influxes and internal political unrest made a favorable economic environment not evident. Consequently, Zambia is still considered an LDC (UN-OHRLLS). Economically, Zambia benefits from its large copper reserves but 85% of the labor force has traditionally been and still is employed in the agricultural sector(Aregheore 2013).

During the eighties, Zambia needed to turn to the International Monetary Fund (IMF) to get loans to come to terms with the balance of payments deficit. In the subsequent years, Zambia became more and more indebted. By 1985, the country became one of the most highly indebted countries relative to GDP in the world(Brooks et al. 1998). At the same time, the loans provided by the IMF became more and more conditional upon Zambia's economic policy. The implemented measures resulted in the fact that large parts of the population did not have access to food. The ensuing social unrest caused the President to abandon the IMF policies in 1987 and set up a drastically different plan for economic recovery. The plan eventually could not change the pathway of the Zambian economy and President Kaunda soon felt it necessary to renegotiate an agreement with the IMF(Wulf 1988). It was around this time that the negotiations of the Uruguay Round took off. Zambia became a World Trade Organization member in 1995.

2.5 The position of smallholders and agriculture

2.5.1 Importance of agriculture for LDCs

Agriculture is the backbone of most of the economies of African LDCs. The vast majority of the people in LDCs is involved in agriculture. The sectorprovides jobs for around 70% of the population and also contributes quite a bit, varying between 30% and 60%, to GDP across Sub-Saharan Africa (SSA) (UNCTAD 2011b)(Delgado 1995). Despite its importance for the economy, but also in achieving food security, export earnings and possible linkages with other sectors, agriculture has not been living up to its potential in virtually all LDCs.

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often family members of the farm owner. It is this smallholder population that make up the bigger part of the rural areas, which accounts for the highest poverty headcount(IFAD 2011). It can be concluded that any given smallholder in agriculture has a higher chance of living under the poverty threshold than an urban resident.

This group of agricultural smallholders encompasses an estimated 30 percent of the entire population of SSA producing 90 percent of all agricultural output(Garvelink, Wedding, and Hanson 2012). Since this population is prospected to grow substantially in the decades to come, it is necessary for productivity to pick up to keep the number of poor and food insecure people from rising further. Hence, the situation is likely to deteriorate if nothing changes. An improvement of the livelihood of these millions of people would therefore logically start with a more productive agricultural sector. However, agriculture in LDCs faces many challenges. If these challenges are properly addressed, a transformation in agriculture could occur(FAO 2009). This agricultural revolution could improve the livelihoods of millions of the rural poor and could be an engine for growth in other sectors of the economy. The agents of change in this story would be the smallholders because together they account for 90 percent of agricultural production (Dunstan 2001 in:Narayanan and Gulati 2002). This makes smallholders in agriculture a particularly interesting group to scrutinize.

2.5.2 Challenges in the agricultural sector

The problem with the agricultural sector in the vast majority of LDCs is low productivity resulting in agricultural output being too low(Rodrik 1998). The Green Revolution that has so clearly taken place in the Western Europe, the United States, South America and Asia, has left SSA apparently unaffected (Breman and Debrah 2003). Impediments to agricultural development and growth can be internal as well as external.

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Externally, it has to be noted that the LDCs are not doing well on global markets. Their share of agricultural products in world trade has been steadily declining from 3.2% during the seventies to 0.9% in the period 2000-2004 (World Development Indicators 2013 2013). This drop can be attributed to the lack of competitiveness of agricultural exports nationally as well as internationally. Many LDCs are nowadays importers of food from the industrialized world, which makes it even harder for farmers to produce competitively, even nationally(Valdés and Foster 2012). Another problem is infrastructure. Even when production is in place, it appears that infrastructure is often inadequate in connecting to global markets.

The truth is, when compared to the trade to GDP ratio of other countries, Sub-Saharan African trade is not lagging behind at all. On the contrary, trade is occurring at a perfectly expectable level. The reason why SSA is nevertheless marginalized in global trade is lagging output. If output were to grow, LDCs participation in global trade would be expected to pick up as a share of total trade(Rodrik 1998).

The solution that is advocated by numerous organizations is the commercialization of small-scale farming(Wiggins and Keats 2013; ―Smallholder Commercialisation Programme Investment Plan‖ 2010; World Development Report 2007. Development and the Next Generation 2007). In analysing the situation in the LDCs, these actors conclude that the main obstacles small farmers face are the distance to markets, the (physical) access to markets, the lack of information and lack of access to credit and agricultural inputs(Aniekwe 2010).If these obstacles would be taken away, farmers would be in a position to grow cash crops on a larger scale and export them in order to generate an income to sustain their family(Delgado 1995).

However, an important issue that interferes with this process of commercialization of small-scale farms was briefly touched upon earlier: the continuing agricultural protection as carried out by a large group of countries that are members of the Organization for Economic Co-operation and Development (OECD). Agricultural support from OECD-governments depresses the world prices for agricultural products. This makes it very difficult for small-scale farmers in LDCs to compete to these artificially low prices even though they have a comparative advantage in the production of certain (tropical) products(Ataman Aksoy and Beghin 2004).

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the major challenges of agriculture in LDCs, it could have tremendous positive effects on many people now and in the future (Kandiero and Randa 2004).

2.5.3 The relation between agriculture and food security

Food security is generally considered to be a situation where food is available, people have access to food and people know how to utilize and use food (―Food Security Brief‖ 2006). The role of small-scale farmers in the issue of food security is an important one because they generally provide food for their own household and thus make their household food-secure. If they are in a position to produce more than they need, they can sell it on the market and influence national food security. Buyers of these crops can be subsistence farmers who do not succeed in producing enough food to feed the household or urban residents who by definition do not grow crops (Kodamaya 2011).

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developmental organizations, such as the United Nations Development Programme (―Human Development Report 2007/2008‖ 2008).

2.6 Summary

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3 The Uruguay Round

In this chapter, first some attention will be devoted to the process of the Uruguay Round negotiations that took almost eight years. The role of the developing countries will be singled out so that it can later be compared to their role in the Doha Round negotiations, that will be under discussion in chapter 4. Then, the outcomes of the Uruguay Round will be considered. As a final point, the outcomes of the round will be placed in the context of the LDCs. Particularly, the effects of the AoA on food security and poverty in Mali, Uganda and Zambia will be dealt with.

3.2 The international context of the Uruguay Round

The lack of international rules on the topic of agriculture and the fact that many developed and developing countries were protecting their own agricultural sectors, caused substantial disadvantages on the world market for agricultural goods. Farmers in the developed countries who enjoyed government support produced more than they would have under a situation of healthy competition. In other words, production was effectuated in an inefficient manner. The increasing numbers of price distortions and surpluses of agricultural products led to a variety of undesirable side-effects. The most obvious consequences were artificially low world prices, production in countries that did not have a comparative advantage in the production of these products and problems for developing country producers to compete with their developed country counterparts (Bale and Lutz 1981). At the same time, even between the US and the EC tensions arose because of their respective agricultural support programs (Ahearn 2006). Unsurprisingly, this situation led to many trade disputes and senses of dissatisfaction amongst the countries and people around the world, which were affected by these policies. Agricultural crises in the 70s and the 80s in the EU en the US gave a sense of urgency to the idea that reforms of the international agricultural sector were really much needed. This is one of the issues that countries attempted to address in the Uruguay Round (1986-1994) (Ingersent and Rayner 1994).

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multilateral trade rules to the domain of agriculture by means of the AoA and a serious reform of the trade in textiles by termination of the Agreement on Textiles and Clothing (ATC). In addition to these new agreements and the termination of some old ones, the Uruguay Round reformed the Dispute Settlement Body (DSB) and the Trade Policy Review Mechanism (TPRM). Finally, the successor of the GATT, World Trade Organization, was established by the Marrakesh Agreement of 1995 (WTO 2013a).

At the end of the Uruguay Round, no less than 122 countries participated. Never before was such a large part of the international community present at GATT trade rounds. At the same time, never before had the GATT known such a broad negotiating mandate (Wilkinson and Scott 2008).

3.3 Uruguay Round negotiations

The assessment of the nature of the participation of the developing countries in the Uruguay Round will be based on the following aspect: the presence of a permanent presentation in Geneva. But first, it is necessary to gain insight in the circumstances in which the Uruguay Round unfolded.

The Uruguay Round took off with the declaration from all trade ministers of the then-members of the GATT: the Punta del Este Declaration (1986). In this declaration, the goals of this new round of negotiations were set out. Besides attempting to bring a variety of new areas under GATT-discipline, creating international rules on agriculture became one of the priorities as well. More specifically, the issue of domestic agricultural support was explicitly mentioned in the Declaration. The two other items on the agriculture agenda were market access and export competition (―Punta Del Este Declaration‖ 1994). At the outset of the negotiations 111 countries were ready to participate in the round. Seventeen countries would soon follow suit and join in at some point in the process (WTO 2013b).

3.3.2 The role of developing countries

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misconception of developing countries playing a role in the GATT for the first time during the Uruguay Round as based on the introduction of the single undertaking, binding all negotiating parties for the first time to all the agreements. In other words: it was the first time they agreed to be bound be the negotiated agreements and thus it appears as if the Uruguay Round was the first time they took part. In reality, it is well documented that many developing countries were present at the earlier trade round negotiations(Wilkinson and Scott 2008; WTO 2013b). However, before the Uruguay Round, developing countries‘ participation in the context of trade rounds had been limited to demanding preferential access to developed countries‘ markets (Whalley 1987). Indeed, it was at the Uruguay Round negotiations that developing countries themselves proposed market access offers to developed countries as well (Blouin et al. 2002).

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3.3.3 Participating countries

The consensus-oriented nature of the WTO has made negotiating groups with like-minded countries (on some areas or in general) convenient. In all kinds of compositions groups of countries have worked together to table proposals that have made in easier to reach consensus. Overall, the large group of participating countries can be subdivided into the following groups that do not necessarily correspond to the actual negotiating groups:

United States

The United States was a big proponent of the launch of the Uruguay Round. On agriculture, they were involved in many types of income redistribution schemes in favor of the domestic farming community. Its share of agriculture of GDP is small so that the rest of the economy can bear the costs of this domestic support (Skogstad 1998). At the same time, export subsidies were not employed by the US. As a result, in the Uruguay Round negotiations the US opted for a complete abolition of export subsidies and import restrictions on agricultural products, the so-called zero option (Ingersent and Rayner 1994).

European Communities (EC)

During the Uruguay Round negotiations the EC was the party with the initial position of as little change as possible in the area of agriculture. At the basis of this lay the importance the EC attached to its Common Agricultural Policy (CAP). Export subsidies as well as production subsidies were part of the CAP before the Uruguay Round (Ingersent and Rayner 1994).

Cairns group

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In developing economies, the position of agriculture was completely different from the situation in the developed world. Agriculture was the sector that was supposed to generate the (tax) revenues needed for achieving development. This taxation created a disincentive to produce. Urban food prices were kept low to a point that lowered production made imports necessary. This pattern made the negotiating position of developing countries fundamentally different that of the developed countries (UNDP 2007). The developing countries hoped to be granted a better market access deal from the developed world. Concurrently, they were hesitant to lower their own tariffs and non-tariff barriers because they feared the effects it would have on their economies. The developing countries asked for special and differential treatment to protect their economies.

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countries, fifteen were represented by staff from embassies in other European cities, and five by delegations based in their national capitals. This makes it significantly harder to be able to attend meetings in Geneva. Furthermore, with regard to the size of delegations: developing country delegations were notably smaller than those of developed countries. In 1987, when the Uruguay Round began, the EU disposed of a delegation of ten persons and EU member states‘ delegations included an additional 57 persons. The US delegation counted ten and the Japanese fifteen. Only twelve developing countries had delegations of more than three persons. These larger ones being Korea, Mexico and Tanzania with seven persons each; Brazil and Indonesia with six each; Thailand, Hong Kong and Egypt with five each. Of the 48 least developed countries, 29 were WTO members, but only eleven of them maintained delegations in Geneva, a percentage of 37.9 percent (Finger and Schuler 1999; Wilkinson and Scott 2008).

3.3.4 The course of the negotiations

The original deadline of 1990 for the Uruguay Round was not met. In fact, negotiations did not move much at all. The bottleneck in the negotiations was, without a doubt, agriculture (Ingersent and Rayner 1994). It was mainly the EC that rejected most of the drafts and negotiating documents. In 1990, the EC refused to decide to commit to making concessions on all three items on the agenda. European Commissioner Ray MacSherry succeeded at last in 1992 in limiting European production of agricultural goods and working towards a common market that was more free from government interference. This has been an enormous step in getting closer to an agreement in the Uruguay Round negotiations. Since then, transparency increased, income support became more and more decoupled from production support and production has shifted to a more realistic equilibrium level. In the EU-US Blair House accord (1992) new agreements on agricultural support were concluded and concepts of tariff rate quotas and the Blue Box were introduced. These two agreements paved the way for the negotiations in the Uruguay Round and thus led to its conclusion in 1994. It was in this agreement that a first step was made to integrating agriculture in the framework of GATT (Sheffield 1998).

3.4 Uruguay Round outcomes

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for developing countries, it is the AoA(1995). After the Uruguay Round, WTO members would be committed to respect rules and fulfil obligations related to agriculture and trade. Agricultural products thus no longer enjoyed a ―special status‖ under GATT rules. In practice this meant that from then on, it was no longer prohibited to use countervailing measures against agricultural products (Oyejide and Lyakurwa 2005). Stiglitz and Charlton (2005) do not see the AoA as a final product, they see it more as a framework for future negotiations. This is because when barriers to trade had not been quantified and domestic support could not be adequately measured, it had not been possible to negotiate on the reduction of those distortions. Therefore, its outcomes have been important, but not substantial in terms of liberalization and the enhancement of trade.

3.4.2 Market access

All signatory parties have to abolish quantitative restrictions and non-tariff barriers and replace these with tariffs, a process known as ―tariffication‖ (Ingco 1996). The tariffs also became bound to a certain rate and members committed to not exceeding this bound rate at any time. Members also agreed to reducing the levels of their tariffs: by 36 percent in six years for developed countries and by 24 percent in tenyears for developing countries. LDCs did not have to reduce their tariffs, but they did commit not to raise their bound rates. These tariff reductions seem much more impressive than they actually were. The reason for this is that the base level for the measurement of the reductions was the rates applied during the period 1986-1988, a time when world prices were exceptionally low and when the rates of protection were high. Another issue was the ―dirty tariffication‖ that took place in many industrialized countries: the process of agreeing to bound rates for certain product lines that were well above the equivalent tariff rate of the non-tariff barrier in place before the Uruguay Round agreement. In developing countries, similar actions were undertaken to overstate the commitments made. In the process of tariffication, they were allowed to bind tariff rates at a level unrelated to their previous levels of tariff protection. As a result, the level of average protection in developing countries increased as well (Martin and Winters 1996). Another problem with the market access pillar for LDCs was that the tariff preferences for these countries under the Generalized System of Preferences (GSP) became largely eroded as a result of the tariff cuts agreed to by the developed countries (Page 2002).

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When confronted with a TRQ, exporting parties may export up to a certain volume of a product to a country. Up until that limit is reached, a favourable tariff is charged. If exporting parties export above that limit, a generally much higher tariff is applied (Martin and Winters 1996).

3.4.3 Domestic support

Domestic support measures have been subdivided into three categories in the Uruguay Round Agreement: the ―amber box‖, being measures that are taken to be trade-distorting and have effect on production, such as input subsidies and price support; the ―green box‖, measures that are meant to not have effects on production, such as support for research, marketing assistance; the ―blue box‖, or measures such as direct payments to farmers to compensate them for programmes to limit their production. Subsidies under the Amber Box are calculated under the Aggregate Measurement of Support (AMS) and are subject to reduction discipline. Subsidies up to a certain limit (5 per cent of the total value of agricultural production for developed countries and 10 per cent for developing countries) are exempted. This is what the Uruguay Round Agreement referred to as the de minimis level. Amber box measures above those levels have to be reduced from the base period 1986-88 level by 20 per cent for developed countries (over six years 1995-2000) and by 13.3 per cent for developing countries (over 10 years 1995-2004). LDCs are exempted from these reduction commitments; they did commit not to raise the level of domestic support beyond the de minimis level.

3.4.4 Export competition

Direct export subsidies are subject to reductions from the 1986-90 average level by 36 percent in value and 21 percent in volume for developed countries over a period of six years and by 24 per cent in value and 14 per cent in volume for developing countries over a period of ten years. LDCs did not commit to reducing their export subsidies, but they did commit to not employing them when they were not used before the conclusion of the Uruguay Round.

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distorting boxes, they harm trade and farmers in the developing world nonetheless (Stiglitz and Charlton 2005). Secondly, the AoA enabled the developed world to keep a large number of export subsidies in place whereas developing countries were not allowed to use them because they did not have them during the Uruguay Round. This puts the developed countries in a favourable position. Lastly, the developed countries were in a position where they could shield their domestic farmers from import surges or low domestic prices by using a special safeguard mechanism on product lines that have been subject to ―tariffication‖. This only took place on product lines on which non-tariff barriers used to apply. On agricultural products that could be unrestrictedly imported by developing countries, in other words products that were not subject to non-tariff barriers, no ―tariffication‖ has taken place and thus, no special safeguard provision can be invoked.

It is hard to imagine how these measures in the area of market access, domestic support and export competition can be seen as a development-oriented way of bringing the topic of trade in agricultural goods under GATT discipline. The ultimate evidence is in the numbers. Practically all authors agree that although the net effect of the Uruguay Round on international trade has been large and positive, the effects on LDCs has been small and negative (Stiglitz and Charlton 2005). Indeed, their preferences were eroded and they were required to invest in the implementation of the new rules of the GATT/WTO system (Oyejide and Lyakurwa 2005; Page 2002)

3.5 Summary

It can be concluded that in the Uruguay Round, developing countries played a whole new role in the GATT. With this new role great trade benefits came for the developed countries as well as for a large number of emerging and larger developing countries. This was unfortunately not the case for LDCs. In the negotiations they did not play an effective role due to their small size and significance, their lack of permanent presence and their lack of negotiating power.

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4 Effects of the Uruguay Round in Sub-Saharan Africa

Changes in (international) trade policy affectLDCs because their economies tend to be relatively open. In the case of Mali, Uganda and Zambia in 1995, the total trade (total imports plus total exports) accounted for respectively 57, 33 and 76 percent of the GDP (World Development Indicators 2013 2013). Figure 1 shows trade as a percentage of the GDP for the years 1995 to 2005.

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Figure 1. Trade as a share of GDP for Mali, Uganda and Zambia in 1990-2005 (World Development Indicators 2013 2013)

The fact that trade is these countries are relatively open is why, whether they are net-food importing countries or net-food exporting countries, trade directly impacts the national food security situation. This is the reason the Uruguay Round outcomes are expected to affect trade in LDCs and thus their food security situations. Research shows that this effect is likely to become visible through the quantity of imports rather than exports (Boussard et al. 2005).

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for food security that will be used are food supply per capita per day and the prevalence of undernourishment.

The second aspect that is important in measuring the wellbeing of smallholders in these countries is poverty. Poverty is one of the causes of food insecurity because when people have little money, they might not be able to buy enough food to feed themselves. Poverty in Mali, Uganda and Zambia will be assessed by looking at the number of people with an income below the poverty line of $1.25 per day in purchasing power parity(PPP). The $1.25 poverty threshold is the poverty line the World Bank has established in 2008, when a revision of the commonly used $1 poverty line was deemed necessary(World Bank 2010).

Then, it will be determined what factors have been likely to account for the established trends and whether the Agreement on Agriculture has made a difference.

The relation between the indicators used is as follows:

The share of the population that has a low income (poverty headcount ratio $1.25 a day) spends its money on food. In the first place domestic production (aggregate food supply per capita per day) is appealed upon. Where domestic production is insufficient, income is spent on the purchase of imported food. When income is too low to satisfy basic food needs in the household, it is a matter of food insecurity (prevalence of undernourishment).

4.2 Food security and poverty

4.2.1 Mali

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Figure 2. Aggregate food supply (kcal) per capita per day in Mali (FAO 2012)

This data is corrected for the population growth. This means that based on the total food supply, although inequalities exist, each person would be able to take in the mentioned amount of calories per day on average. Given the fact that, in order to maintain a healthy lifestyle, a man needs 2500 kcals per day and a woman 2000, the data gives an idea about the food security situation. Though, it is important to keep in mind that the availability of food does not automatically mean that the food is accessible to whoever needs it.

Furthermore, FAO has researched the prevalence of undernourishment in the developing countries on an annual basis. This serves as a monitoring mechanism for the progress towards the next World Food Summit and the Millennium Development Goals. FAO measures the percentage of the population in the country with a level of Dietary Energy Consumption (DEC) that is lower than the Dietary Energy Requirements (DER). It is important to note that this is a measure of chronic hunger and thus does not aim at measuring national food security on an annual basis taking into account its volatility is caused by local events (Cafiero and Gennari 2011).For Mali, prevalence of undernourishment is estimated at three ―moments‖ in the relevant period, as can be seen in Table 1. Mali has thus improved its food security situation during that period. Not only in absolute numbers but also when corrected for population growth rates. To conclude so far: the average food supply per capita has increased and relatively less people are undernourished in the Malian population.

Mali 1990-1992 1999-2001 2004-2006

25,3 21,5 14,7

Table 1. Prevalence of undernourished people as a share of total population (FAO 2012)

With regards to this indicator, the trend in Mali is similar to that in food supply and inversely proportional to the prevalence of malnutrition as would be expected, see Table 2.

Mali 1994 2001 2006

86.1 61.2 51.4

Table 2. Poverty headcount ratio $1.25 a day (PPP) (World Development Indicators 2013 2013)

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FAO‘s data on the food supply in Uganda in the period 1995-2005 shows that while there was a low mark in 1995, the food supply situation picked up and kept showing an upward trend until 2003 after which it decreased for years in a row (see Figure 3). However, on average more food became available per capita per day.

Figure 3. Aggregate food supply (kcal) per capita per day in Uganda (Source: FAOSTAT)

With regards to chronic hunger, FAO collected data on Uganda and found the following trend for the prevalence of undernourished people as a percentage of the total population (table 2):

Uganda 1990-1992 1999-2001 2004-2006

26,6 26,5 27,9

Despite Uganda‘s efforts, it is clear that the number of malnourished people as a share of the total population has increased. An important factor to consider is the enormous population growth numbers Uganda has experienced and still experiences (on average around 3.3 percent per year) making it the 6thfastest growing population in the world (World Development Indicators 2013 2013). Taking into account these numbers, it is easier to grasp why Uganda has not been able to effectively target and reduce the number of people dealing with chronic hunger.

Uganda 1996 1999 2002 2006

64.4 60.5 57.4 51.5

Table 4. Poverty headcount ratio $1.25 a day (PPP) (World Development Indicators 2013 2013)

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3.1.1 Zambia

Zambia‘s food supply situation shows a clear general downward trend until 2007, when it increased for the first time in years (see Figure 4). Because the period under research is 1995-2005, this improvement will not be considered.

Figure 4. Aggregate food supply (kcal) per capita per day in Zambia (Source: FAOSTAT)

With regard to the progress towards reaching the goals set out at the World Food Summit in 1996 and the Millennium Development Goalsto be reached in 2015, Zambia performs as can be seen in Table 5 on the prevalence of malnutrition as a share of the total population.

Zambia 1990-1992 1999-2001 2004-2006

34.3 43.9 48.3

It is clear that all indicators show the same trend: Zambia‘s food security situation is deteriorating and thus definitely cause for concern. Less food is available per capita, the prevalence of stunted growth in children has increased as is the case with the prevalence of malnourished people as a share of the total population. This indicates an unambiguously larger instance of chronic hunger.

Also with regards to poverty, Zambia has been experiencing a seriously worrying trend of increasing absolute poverty, see Table 6.

Zambia 1996 1998 2003 2004 2006 62.1 55.7 64.6 64.3 68.5

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Basically, the indicators for food security as well as for poverty show the same trend in Zambia.

4.3 Domestic production and import

As mentioned before, the state of food availability in SSA is the consequence of a lagging domestic production (see 2.5.1) and imports and is largely independent of the exports (see 2.5.3). Therefore, these situations of slightly improving food supply and worsening access to food in Mali, the generally upward sloping food security situation in Uganda and the dramatically downward sloping general trend in Zambia‘s food security can be traced back to productivity problems in SSA.

4.3.2 Domestic production

Causes of low productivity in these countries can be subdivided into three broad categories: environmental, socio-economic causes and other causes.

With regard to the environmental causes, Breman and Kofi Debrah (2003) point to the poor agricultural resource base being the most important factor that inhibits a significant raise in productivity in SSA. This resource base varies quite a bit across the region depending on the type of climate and the type of soil. On average, it can be concluded that this resource base is often not suitable for crop cultivation and that it causes agricultural inputs to become unprofitable to use.

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arbitrary way in which the reforms have been implemented as a reason for the sluggish productivity growth (Kherallah et al. 2000). In the following section the underlying causes for low productivity in the agricultural sector in Mali, Uganda and Zambia specifically will be addressed.

4.3.3 Imports

The other side of the aggregate food supply per capita per day function is imports. After all, if domestic production is insufficient to ensure food availability in a certain country, it should be able to import the food that is required to fill the primary needs of its inhabitants. However, the poverty statistics as shown above indicate that there is a coinciding problem of access to food in all three countries. In this context, this means that when domestic production is too low to allow all people in a country to have sufficient food, people need to be able to buy it from abroad. If people do not dispose of sufficient income to buy this imported food, they still do not have access to food. That is why poverty is a big problem that has great consequences for the food security situation (Boussard et al. 2005).

When looking at the food imports and the problems with purchasing imported food products, a couple of factors play a role. In the first place, smallholders have been too poor to be able to afford the necessary (imported) food products, as was mentioned before. In other words: incomes need to be higher to be able to acquire imports if world prices remain the same. Furthermore, imports could become cheaper if import tariffs on food products decrease. Another problem is the access to markets. Smallholder farms are characterized by their scattered nature, making it more difficult to physically go to markets where imported products are being sold. At the same time, imports have to be transported from abroad to local markets, making a solid infrastructure system indispensable.

Out of all these factors, the only ones that could have been affected by the Uruguay Agreement is the level of world prices for food due to the introduction of the system with the boxes for domestic support and the new import tariffs as implemented by Mali, Uganda and Zambia as a result of the ―tariffication‖ of their non-tariff barriers.

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The second factor, the new import tariffs of the three countries after the conclusion of the Uruguay Round are also interesting to consider. The reason for this is that lowered import tariffs make imports cheaper and thus more within reach for consumers. Martin and Alan Winters (1996) show that for SSA on average, the level of import tariffs on food products have increased significantly since before the Uruguay Round. This means that it is likely that imports have become more expensive for buyers in LDCs and thus less accessible.

Figure 5. World food prices 1960-2012 (Source: World Bank via Worldwatch Institute)

4.3.4 Relevant factors

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4.4 Mali

4.4.1 Environmental causes

Mali consists of roughly three regions that all differ in terms of climate and soil composition. In the north lies the arid Saharan zone, there is the central semiarid Sahelian zone and in the south the cultivated Sudanese zone. The country is mostly dry because of the large northern parts of it that consist of (semi-)desert. Droughts are thus a serious problem in Mali, not in the last place for agriculture and food security. Through the country runs the Niger river which, when it overflows, creates a fertile inland delta, providing plenty of opportunities for agriculture and fishery. Erratic rainfall, floods and desert storms have been risk factors that Mali has a habit of coping with. Since their independence, early warning systems have been put in place so that farmers would be better able to deal with extremities (Drakenberg and Andersson 2008). Each region has their own particularities for the practice of agriculture. The south is much more suitable for the cultivation of crops than the north (―Climate‖ 2013). Despite this, the prevalence of malnutrition has been the lowest in the north where the intake of milk and meat is higher (FEWS 2013). In general, agricultural production also suffers from fragile and poor quality soils.

4.4.2 Socio-economic causes

Agricultural reforms in Mali have been incomplete, still allowing the government to be an actor in the agricultural markets. Nevertheless, cereal market liberalization during the 80s and 90s in Mali has been full and successful. Declining transaction costs have made it easier for food to be transported to deficit areas (Moseley et al. 2010). In response to this, pressure of neighbouring countries demand on Malian markets has increased, making less food available for Malians (FEWS 2013).

With regards to the Malian production of cotton, the Malian Company for Textile Development (MCTD) has been set up to regulate cotton production and process the cultivated cotton to textile. This government organization has been enabling cotton producers to sustain their livelihoods and achieve food security (FEWS 2013). However, the cotton industry has been facing productivity problems and low international prices, making the business outlook not as profitable as it once appeared to be (Matsumoto-Izadifar 2008).

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the land limits himself to simple subsistence production, or production which gives him immediate returns. That production, from smaller and smaller farms yields little surplus and is out of range of any intensification (FAO 2013).

4.4.3 Other causes

Mali has been a country where the mechanization of the agricultural sector has been very limited. As a result, most farmers in Mali still use traditional techniques in farming. This has been one of the factors that has kept Africa from making up arrears in terms of agricultural productivity compared to the rest of the world(World Bank 2007).

4.4.4 Summary

Low agricultural productivity in Mali has had a variety of causes. The large country is quite diverse in terms of climate and of the type of soil. Climatic extremities are common, making it difficult for farmers to keep production steady to ensure a certain level of annual production. Furthermore, the quality of soil for agriculture is often poor. The socio-economic causes of low agricultural productivity include the partial nature of the reform of agricultural markets, declining returns for the production of cotton and problematic land tenure legislation. The lack of mechanization in agriculture is another factor that keeps productivity lagging.

4.5 Uganda

Uganda is an equatorial countrywith different altitudes accounting for slight changes in climatic situations. The south is the wetter part of the country lying in the rainbelt for most of the year, whereas it becomes drier when going north. Here, droughts are not uncommon (Our Africa 2013). An example is the semi-arid Karamoja region that is amongst the poorest in the country partly because its dependence on rain and the prevalence of animal diseases, lack of clean water, poor farming skills and landlessness (UPPAP 2002) (FEWS 2013). However, the many lakes in Uganda, especially when going southwards, make the country less dry and more suitable to all kinds of cultivation.

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the population, the number of poor as a percentage of the total population has fallen at an average rate of one percent per year (World Development Indicators 2013 2013). If incomes have risen it is likely that people have become less food insecure between 1995-2005. Furthermore, Uganda has shown a serious dedication to agrarian reforms as well as the liberalization of agricultural markets, resulting in a successfully crafted program of reforms in the SSA region, even before 1995 (Opolot and Kuteesa 2006).

Concurrently, Uganda has invested substantially in improving infrastructure, facilitating the connection to markets of smallholders and the transport of food throughout the country and thereby contributing to food security.

The productivity of the agricultural sector in Uganda is not reaching is potential. This is amongst other things due to the high number of HIV/AIDS infected people. In 1995, 10.3 percent of the population between 15 and 49 years old was infected with HIV. In the 1995-2005, the Ugandan government has made great steps in reducing these numbers to 6.4 percent in 2005. Despite this, it cannot be denied that the impact of HIV/AIDS infection on the workforce and on households is still significant, leading to a labour productivity loss(World Development Indicators 2013 2013).

Not only HIV/AIDS has affected the Ugandese workforce. Another immense problem has been the civil strife that has been ongoing in Uganda in the 1995-2005 period. Uganda has had to deal with internal conflict caused by the continuing insurgence of the Lord‘s Resistance Army, led by Joseph Kony. The conflict started in the Achiland region spreading to other parts of the country. One of the effects of this has been the displacement of many persons in attempts to flee abductions and the recruitment of child soldiers as well as killings and other violence. This situation has caused many people to leave behind their belongings and their property, including for example their land and thus their way of making a living (UNHCR 2013).

4.5.4 Summary

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infections and the civil strife that has hit the country severely. Both factors have been standing in the way of higher productivity in agriculture in Uganda.

4.6 Zambia

Zambia has a tropical climate but it is tempered because of the high altitudes. As a result, the climate can be considered suitable for growing certain crops. However, the south and the west of Zambia are very drought prone. At the same time, these regions have to deal with excessive rain, making it hard to generate a stable production level, regardless of the weather. Moreover, the quality of Zambian soils leaves much to be desired in some cases (FEWS 2013) This is especially the case in the extreme south of the country. Also, the circumstances for growing maize, Zambia‘s preferred crop, are specifically unfavourable besides the fact that production is vulnerable because it is rainfed. Nevertheless, Zambia has been hesitant in changing its export preferences.

Environmental degradation has been severe in parts of Zambia. This has occurred partly because of the large scale mineral extraction that has had disastrous effects on the quality of the Zambian soil.

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With regards to reforms in agriculture related markets it has to be noted that in Zambia the fertilizer-crop price ratio has increased over 50 percent since liberalization of fertilizer prices (Kherallah et al. 2000). The fact that these reforms have been inconsistent and partial is among the reasons that caused them to have detrimental effects in Zambia (Nyairo 2011). Absolute fertilizer use has not increased much, possibly because of its high price. The same holds with regard to Zambia‘s maize market reforms that were reversed in response to the opposition that arose because of the higher prices for maize. The privatization of Zambia‘s crown jewel, the copper industry, in 1996 placed the industry in the hands of foreign investors that have been mining in Zambia throughout the Copperbelt province and beyond. Copper helped the country generate an annual GDP growth of six percent for the last decade, due to rising world copper prices. However, the poor Zambians have not seen anything of this money. Additionally, environmental degradation has made copper affect agricultural productivity in a negative way, as was mentioned above.

Labour productivity is negatively impacted because of the explosive growth of the population averaging 2.5% in the 1995-2005 period and the high incidence of HIV/AIDS infections(World Development Indicators 2013 2013). Although the prevalence of HIV infections as a percentage of the total population between 15 and 49 years old has declined between 1995 and 2005 by almost one percent from 14.8 to 13.9 percent (World Development Indicators 2013 2013). It has left many households without adequate caretakers, making the eldest children the heads of the household. This trend has been affecting household labour supply, thereby limiting household income. All of these factors have a detrimental effect on labour productivity and result in the fact that small farms barely ever surpass subsistence production.

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4.6.4 Summary

For Zambia, low agricultural productivity can be linked to poor quality of soils, sometimes caused by environmental problems that result from the extraction of copper. Another problem is that Zambia‘s export preferences have proven difficult to change. Consequently, the country still grows maize on a large scale even though the land is unsuitable for this purpose. The reforms of agricultural markets have been inconsistent and partial, leading to uncertainty and a significant role for the state in agriculture. Investment is too low to have effects and government revenues are too low to invest properly. Finally, the number of people infected with HIV/AIDS in Zambia is very high, resulting in lower labour productivity.

4.7 Causes and effect

Food security and poverty issues in the period following the conclusion of the Uruguay Round are for the most part attributable to low productivity of the domestic agricultural sector. Low productivity in the agricultural sectors in Mali, Uganda, and Zambia have different types of causes. Environmental, socio-economic and labour productivity constraints all play an important role in holding back the farmers on the path towards greater yields and an improvement to the food security and poverty situation. Furthermore, where domestic production fell short in providing the populations with sufficient food, the accessibility of imports has decreased over the 1995-2005 period. This has happened through increased border protection in LDCs while world prices have been roughly stable until 2005.

4.8 Summary

The WTO Bali-package and its effects on smallholders