70 | East and South Asia and the Pacific (ESAP) Report

sustained without a transformation of indigenous property systems in the direction of individualization or regulated commons, so as to link investment and returns.

Trade and the Rural Poor
With underdeveloped infrastructure, the upland and moun­tainous areas of Asia suffer from social deprivation due to political neglect and remoteness. The current process of in­ternational trade increases the risk of further marginaliza-tion, disempowerment and desperation, unless it is specially adapted for these areas (IFAD, 2001).
     The limited accessibility, fragility, marginality and di­versity of the mountain areas generally require diversifica­tion of resource use and production. But international trade, guided by short-term profitability and external demand, promotes narrow specialization in few specific products. It encourages indiscriminate resource-use intensification and over-extraction of niche opportunities, with little concern for their environmental and socioeconomic consequences. The process of globalization is so rapid that mountain com­munities do not have sufficient lead-time and capacity to adapt (IFAD, 2001). There are other agriculture-based poor, concentrated in the large arid and semi-arid regions, depen­dent on rainfed agriculture. They share some characteristics of poverty with the upland poor.
     In many Asian countries, small farmers have been af­fected by competition from imports that are cheaper than their products. Their organizations have been raising the alarm and requesting assistance from their governments, e.g., Asian Farmers Group for Cooperation request that WTO continue to allow Asian countries to protect their ag­ricultural products (Antara News Agency, 2000).
     The Sri Lankan agricultural sector has come under heavy pressure from increasing competition arising from cheap imports resulting from import liberalization. The compar­ative and competitive advantage of Sri Lanka to produce particular commodities will need to be considered in select­ing IFAD's interventions in future projects (IFAD, 2002). There have been protests of Sri Lankan farmers who were adversely affected by cheap imports. Protests were held by potato farmers, chili and onion producers and chicken farm­ers against cheap and ruinous imports (Samath, 1999).
     In 2000 the U.S Agriculture Department accused the Philippine government of violating WTO rules when the im­port of US chicken was limited to curtail dumping. Accord­ing to the Minimum Access Volume (MAV), only 19,000 tonnes could be imported to safeguard the local chicken in­dustry. (The Philippine Daily Inquirer, 21 July 2000). About 330,000 workers or a third of a million in the chicken in­dustry were affected.
     The economic reforms in China, especially on the oc­casion of China's entry into the WTO, have led to concerns by some senior officials as well as experts that there may be adverse effects on the competitiveness and livelihoods of lo­cal farmers. "China's leaders worry that economic reforms could be placing more burdens on farmers than they can bear. Farmers are on the receiving end of the earliest and sharpest changes from the new policies that China agreed to implement to gain entry to the WTO. . . . According to a report by China's State Council, the country's WTO com­mitments are likely to wipe out the livelihoods of 13 million

 

farmers who grow wheat, rice and cotton, while creating new ones in non-grain crops for only about 1.5 million. Some economists reckon that China will eventually need to find jobs for about 200 million farmers as its market re­forms continue. "The Chinese farmer is in a very unenviable position. The impact of reforms on agriculture is profound" (Ke Bing-sheng, director general of the Research Centre for Rural Economy in China's Ministry of Agriculture as quoted in Goodman, 2002). These concerns have materialized, as manifested in soybean (Box 3-1).
     Indian farmers have in recent years faced competi­tion from imported skimmed milk. "The import of 17,000 tonnes of skimmed milk powder from Denmark at zero duty a couple of years ago resulted in a political uproar in Pun­jab. New Zealand has dumped a large quantity of butter oil into India. Even after paying an import duty of 35.2%, the butter oil imports have been at less than US$1,000 per tonne against the prevailing global price of US$1,300 per tonne. Domestic prices crashed, coming down by 10-15 per­cent. Highly subsidized imports of milk flowing into India will only further marginalize millions of milk producers. Thousands of dairy cooperatives which pulled the poverty-stricken masses into a path of economic emancipation will collapse faced with cheap and highly subsidized imports" (Sharma, 2002).
     Indonesian farmers in several sectors, including poultry, rice and corn have been affected by cheap imports on dif­ferent occasions in recent years. As Indonesia has attempted to adjust its import policies with WTO agreements through lowering import duties and lifting bans on various com­modities local producers say the flood of imports is forcing them out of business.
     Rice is the staple food for most Indonesians and is a strategic commodity for the country, grown by 40 million farmers. Before to 1998, i.e., before the reforms in the coun­try following the Asian financial crisis, the price of rice was kept at low levels by the government's food agency, BULOG, by implementing a buffer stock policy. Farmers were given production input subsidies (Suparmoko, 2000). Although the 1997 crisis was rooted in the banking sector and ex­change rate policy, the IMF demanded trade liberalization measures in both the agricultural and manufacturing sec­tors. This included ending the monopoly of the BULOG on food imports and marketing and cutting the import tariff on rice to zero (Oxfam, 2005). From 1996 to 1999, rice im­ports more than doubled, reaching 4.7 million tonnes. Since BULOG was unable to defend the floor price promised to producers, farmers were left to sell their crops at low prices. In late 1999, the government stepped in to restrict the flood in imports and in 2000 re-introduced a levy equivalent to an import tariff of 30%.

3.2      Developing Countries' Issues in Trade Agreements

3.2.1      Subsidies and market access
Developed countries (or industrial countries) share of world agricultural exports remains about 63% (Aksoy, 2005); Asia and the Pacific together have a share of 13.9% of world ag­ricultural exports in 2000-01, which is almost the same as in 1980-81. This is in contrast to the change in the shares in