Tuesday, December 18, 2007
The Vocal and the Silent: Vietnam Progress to Market Integration
January 11, 2008 marks one year for Vietnam’s accession to WTO. In this one year, a lot has been written on Vietnam’s accession to WTO. There is an upbeat mood in the government and among the people (especially those in industry and urban settlements), and the market sentiment too is upbeat.

On celebratory notes, economic managers are positing the impact to be positive. Using indicators of increases in FDI investment, expansion in securities market, growth in export turnovers (which show an annual increase of nearly 20%), potential of technology transfer and even the non permanent membership to United Nations Securities Council, a successful impact is being talked of.

Market integration, as has been seen by the early turn of indicators over 2007, has a trust enhancing impact on the foreign investors. It means greater flow of FDI, open competition based reforms in domestic markets, a growth in export orientation and ecommerce, further energy in real estate markets and pressure on other economic and administrative reforms. It implies greater access to US and EU and other markets for Vietnamese goods on the one hand and lower import tariff and access barriers for agriculture and manufactured goods from these countries to Vietnamese markets, on the other. Furthermore key services sectors such as telecom, financial services, insurance will be opened over a period to foreign investment

In general, Vietnam is “more open” now. Domestic industry and agriculture as well as services face increasingly stiffer competition, as level playing fields are made available. “Reforms” such as protection given out to farmers and even domestic manufacturers given by the way of import duties, direct and other indirect subsidies such as input subsidies, price protection etc will be withdrawn over time, we are told.

Level playing field competition is translating to pressure on labour sector liberalization, greater competition for labour – both on the off farm and on farm sector, ceding public spaces to private and a growing market invasion in the society in a build up to corporate culture. Export orientation of the productive processes, over time implies shift in both cropping patterns and industrial production. In preparation for introducing WTO to people, government spokespeople have at different points in time, indicated their optimistic view of these elements.

While Vietnamese society discusses these issues, WTO accession and other bilateral agreements are being welcomed in other parts of the world, most notably in the US and EU as these will, apart from increased access of these countries goods to Vietnam, yield other important benefits to them, such as continued domestic reform and rule of law, and strengthening of relations in strategically important region in the neighbourhood of China.

Propelled by Accession to WTO, market integration is creating a situation towards two halves in Vietnam- one with Voice, represented by emerging capitalists, stock market and economic managers, and one which is a Silent Vietnam which is represented by rural communities, wage labourers and small holder farmers, and those being left out of the race.

Market integration and WTO accession clearly leads to high competition in domestic sector. Labour market reforms for bringing efficiency and competition as a key means fulfill these agreements narrow spaces for labour rights. Labour rights are the last remaining protective spaces, available to millions of wage earners, for whom such market integration leads to only one thing –an inevitable race to the bottom. In many countries, these have turned to stark realities for labour - a world in which there is enough for many, but not for them!

Another negative impact is on agriculturalists and small farmers. Reduction of trade distorting subsidies in domestic industry (without such conditions being met by huge agricultural subsidies in the north), means progressive removal of protection given out to millions (by the way of input subsidies, price protection), especially in a socialist state like Vietnam in order to and have a national strategy to guarantee local food supplies and build buffer stocks.

Another impact on the poor is a shifting of control and power away from them. Greater opening up, attendant privatization of resources, and promotion of TNCs (the FDI holders) leads to situation where control gradually and uni-directionally shifts away from poor and small holder farmers and from the state to agri-business TNCs and privates, leading to a concentration of power in the food system. It would be pertinent to mention here that 5 corporations control nearly 90% of the world grain trade and 6 corporations hold the global pesticide market today.

Together with other market reforms, such an integration leads to ceding national spaces which are public to the overall private in what some people call as privatization of the state. Such a privatization of assets, knowledge and public processes, is negative of people who have not had the historical advantage of capital, knowledge and power.

The promise of FDI is sometimes is also an elusive one. For one, FDI leads to increase in foreign share in nations wealth stock increases, causing denationalization of the domestic productive sectors. While FDI brings in capital, it also leads to outflows of capital and capital flight. The promise of technology transfer, is often an over-promise, since rarely has the developing world benefited from technology transfers, given the segmentation of production process and control of patents by the TNCs.

Similarly, biodiversity is another sensitive area to be affected by WTO accession. Experiences of bio-piracy and usurpation of traditional knowledge without sharing the benefits with custodians of biodiversity have become more serious due to TRIPS. This process also promotes a control and benefit away from communities to Trans National Corporations.

The economic models which lead to overwhelming pursuit of GDP led growth model and market monomania can only lead to finishing touches of a bigger eventual project which destroys small holder farmers, labour and wage earners. The negative impact of these models on environmental degradation is well recognised.

In this context, there is a need for Vietnam Government to build and strengthen domestic capacity, build a knowledge base for use and implementation of WTO use, as well as to build effective standard setting agencies. Post WTO poverty monitoring processes, to analyse the impact and develop recommendations for protective spaces, such as what some NGOs – like ActionAid and Oxfam are supporting, could also lead to useful learnings and development of strategies.

At the first anniversary of WTO Accession, it must be said that one year is a very short period to assess its impact on economy. Vietnam is a late “accessor” to WTO. Medium and long term experience of countries which have joined and learnt both positive and negative lessons are widely available and have learnings for Vietnam. While it is difficult for one country to continue to stay out of the global processes driven by the ideas of free trade, without risking isolation and losses, we know that free trade does is not just trade. Perhaps with these lessons Vietnam together with other countries in the south, have the historic opportunity to forge a world of trade and exchange based on principle of peoples control and justice, as an alternate process to the current hegemonic one.

World Development Report – Presentation
(Sandeep Chachra)

Esteemed Parliamentarians, and respected Friends

It is indeed an honour and pleasure to be speaking before you on this matter which concerns us all, and especially the millions of struggling farmers from across the world. Thank you so, for giving the time, to listen and share your views on this matter.

Before beginning this session, I want to pay tribute to our collective symbol of courage and conviction ….. Ho Chi Minh, whose pursuit for liberty and equally a right NOT TO BE EXPLOITED continues to guide, struggles of various peoples in pursuit of greater freedom across the globe.

This is a cherished hope for the exploited people of the world. Ho Chi Minhs words are as relevant today as when they were said….. for the millions of people who go hungry to bed every night.

This is a spirit which informs the comments and thoughts on WDR today, but also it informs the expressions of countless struggles of people in pursuit of rights and dignity across the globe.

Today, the World Bank launched in Vietnam, what it launched in Washington in October, the World Development Report on Agriculture 2008.

It is after 25 years, that the WDR focuses on agriculture. The last such effort on agriculture was in 1982.

The World Development Reports, are key knowledge products of the World Bank, which prides itself as now as a knowledge bank.

Coming with the might of WB, over the years the WDRs are acquired the positions of truths and a sort of a dictum for policy makers around the world. Many among us in the civil society and social movements often question this polarity of knowledge…… and the centralisation of knowledge at one source and instead promote the need to have heterodoxy of ideas and knowledge, with particular emphasis on what emerges from peoples own experiences and those in the global south.

Given the centrality it occupies in the minds of our policies, and the influence it has, particularly over countries, which have WB and its sister IMFs loans to also take, we must take deep note of what is said in this 400 page report.

Many among the Civil Society organisations, and farmers organisations, reacting to this report are beginning to question WHY…. Why has the WDR turned its attention to agriculture after 25 years. Among the peoples organisations, there is a belief that we must ask questions, and as in the Words of famous South African freedom fighter, Steve Biko “the essence of any politics is to question those in Power”

Peoples Organisations take note that the New WDR on agriculture has not suddenly turned to agriculture for the reasons that majority of the worlds poor live there. They have been there for years and years…. As the WDR says, it turns to agriculture with a recognition that work on agriculture is necessary to promote growth in other sectors. This is true for agriculture sector….

In talking about this the WDR lays our several policy proposals… while remaining silent on a few crucial questions

I wanted to draw your attention to the key proposals and directions of policy advise contained in the WDR and the questions which these give rise to, and then bring together some of the alternative recommendations from the experiences of peoples struggles

For doing this, I will focus my presentation on the key clusters contained the Report, and those of Land and Labour, Markets and Agriculture, Role of State Support to Agriculture, Technology and finally on Governance.

The WDR enthuses on the role of free markets. In the report countries (such as Bangladesh) which have since embraced free market principles and dogmas, come in for special praise

The WDR talks in various segments, on how free markets in the end deliver equity, and promotes the role of high value market driven agriculture. The report talks of supermarket revolution and how this could lead to greater efficiency and productivity.

We know markets would never work perfectly, because supply and demand, are never perfect, given the historical and continued inequities.

We also find it pertinent to mention here that, pursuit of markets have led to a situation, where the control gradually and uni-directionally shifts away from poor and small holder farmers, and even states into the hands of agribusiness and TNCs. The greatest gainers in the past years have been TNCs , leading to a. Concentration of power in food system, corporations picking up local enterprise in a supermarket revolution. Corporations are the biggest winners. (5 corporations controls 90% of world grain trade) (6 corporations hold 75% of global pesticide market).

Supermarkets would be good for efficiency, but we cannot turn a blind eye to the fact that invasion of supermarkets on agriculture hass finally meant, a worse of deal to the producers and a control away from them.

Likewise, the pursuit of level playing fields by the way of financial and trade liberalisation have meant a dramatic reduction in the ability of the state to shape and coordinate developmental activity. This fact has been acknowledges by UNCTAD recently

Some of the dramatic effects this leads to are

This process supports export cropping and support to larger farmers

Removal of Subsidies and reduction of tarrifs, with deletrious impact on domestic production and livelihoods of small holder farmers

Dismantling of agricultural marketing boards and price fixation and procurement which is the essence of a national strategy to guarantee local food supplies and build buffer stocks

There have been numerous examples of such policies

The Gambia State Marketing Board
The example of BULOG in Indonesia and Import Surges
The recent example of Malawi and agricultural subsidies

Ladies and Gentlemen, it is pertinent to especially mention that, without exception giants of agriculture exports are countries which have protected their agriculture from the travails of so called free markets with subsidies and behind tarrif barriers.

We admire Vietnam for this, Vietnam could not have become the 2nd largest exporter of rice, had it heeded to the policies on removing tariffs on import of staples and rice

While we admire, we must still guard against the perils of a different nature….. sutuations which may turn to realities in our countries, where we export rice and wheat and where our own people may not get enough to eat, and it is here that the general pre-occupation with following the mantra of GDP led growth must be guarded against. Equity is the key here

The issues of policy analysis of land and labour in the WDR suffer from the same market prejudice, or what some call the market monomania

The WDR recognises and offers a pathway towards individual titling of land, especially for women. Introducing such policies, without other protective measures have had very adverse affects… This is not a completely new programme and there has been experience of the WB on this effort earlier under its Market Assisted Land Titling Programme. We must learn lessons from this programme. The lessons all point to the same direction that such land titling allows eventually for sale and consolidation of land holdings and even corporatisation of land. There are many examples on this…. In South Africa, In Ghana where women when given land titles did not want to keep lands fallow, since they feared losing titles, and in time, given that they cropped every year, the land lost productivity and income and its was their land which eventually found its way to larger farmers in distress sales. In South Africa too, this has led to land consolidation in hands of big farmers. In Vietnam too, there are early signs that the lands of indigenous people may find their way into the lands of land sharks and larger farmers.

Property Rights, in this direction, argues the noted Sofia Monsalve, in her Latin American experience, can lead to finishing touches for a bigger project which destroys small holder farmers on what she calls Neo Liberalism’s Trojan Horse.

The problem is that WDR is aware of this and in fact believes that “secure and unambiguous property rights allows MARKETs to transfer lands to more productive users and uses””

And it is here, i must turn to another linked and problematic Proposal in the WDR “that Small Holder agriculture is not an economically viable activity” and that land concentration is a sign that land is being transferred to more productive farmers, and that rural poor should be assisted to join non agriculture sectors.

It then is pertinent to ask, what happens to the poor? Can those people as in the pictures you have seen find dignified life in other places?

Agriculture is a way of life for people… they have now, neither the historical advantage, information and skills to occupy other sectors, and with the state of divides between rich an poor and status of education and related HDR indicators

Yes the state needs to invest to regenerate local economy… to revitalise local industry and agriculture…. It cannot let people to bleak and uncertain futures..

I now want to mention the proposals in WDR on Labour…..

The WDR argues for labour market reforms… a reform of labour laws and liberalisation of labour markets such that the people ousted out can find employment. It talks of bringing competition and efficiency in this sphere.

Experience from around the world, on this issue for now, tells a different story. Labour Rights, are protective spaces available to labour. Labour sector reforms, in an bid to boost, competition, have led in this parts of the world to a road map for race to the bottom. I should mention here, that the WDR quotes 5 million people joining the labour force in India and Bangladesh alone…. Do we think competing against each other, with the disadvantage of their history brings them any betterment

Experience from these two countries along suggests that labour ousted from agriculture sector does not get absorbed in better of non agricultural sectors. Studies have shown that such labour ends up in what is called “Refugee Sectors” and having lost their livelihoods and land continue to stand for agri employment qeues, which becomes less and less.

The Report also talks of the role of Technology. The WDR rightly mentions that there is a need for new agricultural technology for the poor, especially from agro-ecological perspective. However it does go forward on key issues in this regard, which form important questions for the developing world….

Antipoor and Antiwomen agricultural technology. Take the example of Green Revolution. The WDR gives the example of Green Revolution and explains how It has led to key problems on sustainability and ecologocial front, through the example it gives on deepening ground water levels in GR areas. However it then goes on to promote a second green revolution this time in Africa, which it says will have a strong reliance on GMOs. We know how experience of GMOs now… which has meant high indebted ness, and more centrally the problem of shifting control from poor and the companies

We know how the insistence on IPRS (under WTO) has led to a situation where control has shifted from the hands of poor farmers.

The WDR talks of investments in R&D and agriculture. Read together with the other proposal in WDR in this regard of “rolling back the boundaries of the state” it means, that R&D in practice ends up getting privatised and once again in the hands of private interests.

Im sure we here are all together in our belief that science and technology work best for the people when these interventions are affordable, under peoples and state control, strengthen biodiversity and build on peoples knowledge.

However such clear paths are not suggested in WDR.

And it is here that I turn to the last of the crucial suggestion of the WDR, its chapter 11. The WDR recognises rightly that the political economy of agricultural policy makes it difficult to create political commitment to use agriculture for development” Governance is identified as a key to this.

And it is through this, that the WDR gives re-entry to the long held views of the Bank on the relationship between State Private Sector and Civil Society. The WDR argues for the “state to roll back its boundaries through out-contracting, public private and people partnerships, privatisation and devolution of management””

In short the impact of these suggestions, can be dangerous…. The development and welfare state cannot pay a service role to the markets, since such a pathway will only mean that decision making both economic and others would be removed from public to private spheres and in the end a privatisation of democracy

WDR is an independent body within the WB. While the WB Board considers the weight of WDR, we hope that they reflect on the lessons and experiences of people across the world

We hope that assessments and evaluation of WDR, and its concomitant actions are made through the right to food lens, on how policies proposed for agriculture strengthen or weaken the local food systems and peoples ability to claim right to food and livelihoods

It is the proposal of many many peoples struggles and CSOs including us that

• Agrarian reform is spearheaded in a manner which reverses the trend of consolidation of land in the hands of few.

• Oligopolies and monopolies over seeds, food and agricultural inputs and knowledge are broken, and the companies and supermarkets are held accountable

• There is stabilisation of commodity pricing including selective use of floor price mechanisms

• Sensitive agricultural sectors and infant agroprocesing is afforded full protection in developing countries

• Agricultural markets are reformed, in the direction of enhancing control of cooperative and producers group

• Agro-ecological and sustainable farming systems are scaled up

• Investments in Agricultural extension and R&D are in the people and public sphere and not in the hands of corporates

• Social Bases of participatory policy making are strengthened and fundamental democratisation of international governance and local /national decision making systems happen.

The future of small holders is not bleak, but following the some of the trajectories proposed in the WDR, can turn it into an extension of the crisis and not its fixation.

In a world full of experience and ideas, no single process can claim an answer to all ,,,, the key is to build on peoples owns lessons and experiences… and to learn in an effort to build, I come back to Ho chi Minh, a world of singular people which dismisses the lines of class, creed and color

So in 1970s, the Bank efforts, particularly in Africa were to build public institutions that could support farmers, through extension, credits and marketing.

By the time of 1980s, the World Bank, propagating the philosophy of should I call it mythology of structural adjustment, the Bank began to dismantle these. Battling the credit crunch of 1970s-80s countries in the South had little to service the debt, without towing the paradigm of SAPs.

It was at this landmark time, that the WDR’s first attempts to collate agricultural wisdom were made, through its report in 1982/83 on agriculture.

25 years after its first report, and after ploughing the minds of policy makers and the lands of small holders farmers with SAPs, the Bank turns its attention to agriculture again.

What happened in these 25 years, the pictures here can tell you better.

1. Basically it has two devastating impacts:

(i) Liberalising trade and finance
(ii) Dismantling of marketing boards

The perils of financial liberalisation, including on States ability of shape, invest and coordinate development activities have been recently admitted by the UNCTAD (in most cases the local currency fell against dollars). Domestically it gave support to larger farmers, and export oriented commodity crops.”

Financial Liberalisation along with a broader sets of policies on trade liberalisation, meant removal of subsidies, reduction of tariffs, to get the “level playing field”. But as the Bank itself admits, low income countries sought higher revenues from farmers while developed countries provided subsidies. I should leave it to you imagination to guess who and which of these is forced to listen to the advice of the WB.

A similar story is one for agriculture policy. Giants of export agriculture, without exception, are ones which have protected their agriculture and processing behind barriers.

A similar devastating impact was on dismantling of agricultural market boards which fixed prices, procurement and formed a part of strategy to guarantee local food supplies and builds buffer stocks.

2. Friends, it was important to cover this journey, in order for us to locate the political perspective and direction which this journey has moved.

And it is here we must turn to ask “why”. Why is the WB again commissioning its knowledge piece (so called independent) and setting agenda on agriculture yet again.

Why after populating the sphere of ideas with SAP (facts that markets can develop equity), does the so-called “knowledge” Bank, (whose paraded purpose on it is “to fight poverty with passion”!!!!), turning its attention to agriculture.

We must learn from experience and question any prescriptions handed out by any such center “which guesses out dogmas”. Steve Biko, the famous revolutionary struggle leader from South Africa told us once “that the essence of any politics is to target those in power” and the leader of non violent peaceful struggle the father of my nation Mahatma Ghandi said “some laws are not meant to be obeyed”.

The WDR through the language friendly to poor, does not turn to agriculture, because majority of poor live there. They have been there for years and years!!!!!!, ever since rent seeking colonial occupations and post colonial economic globalisation has wrecked havoc to their lives.

The WDR turns its attention to agriculture to promote growth in other sectors. It turns its attention, with proposal that “high value market driven agriculture is an issue for growth and poverty, while staying silent or activity dismissing/subverting other process which promote” redistribution”.

Ladies and gentlemen, we all know, including in their countries, the tenuous nature of relationships between growth and poverty.

Let us examine few specific proposals of the WDR, and problematic issues around it in the remaining time.

Here I will focus on key proposals in segments.

(1) Markets trumping the State consolidating and expanding agriculture power.

(a) The Bank enthuses over the possibilities of unfettered and free markers, with special praise resources for countries which have adopted such principles e.g. Bangladesh the Bank is not unaware of the nature of oligopolies in agricultural markets (supermarket take 70%).

(b) Concentration of power in food system, corporations picking up local enterprise supermarket revolution. Corporations are the biggest winners. (5 corporations controls 90% of world grain trade) (6 corporations hold 75% of global __ market).

(c) Gender bias in agro industry, female tasks are less valued.

(d) WDR argues for tougher contracts for workers, and broader, relax strategy in favour of agri-business (tax).

(e) Globalisation of consumerism: the WDR justifies a callous claim that poor (in India) are shifting to “high value food” is not true (Utsa Pattnaik) where nutritious levels have fallen.

Land and Labour

The bank says development agenda must recognize the often dominant role of women as farmers and the bank report goes out policy suggestions. However the policy suggestions, in actual would end up advancing or not arresting exploitation. For example

Introducing property rights for women without other adequate protection can in fact work in reverse direction and this is where “market assisted land reforms” have led us to. Secure and unambiguous property rights also allow markets to transfer land to more productive uses and users

Property rights as Sofia Monsalve agues (in the case of Latin America) can be used as NEOLIBERALISMS TROJAN HORSE- a finishing touch to a bigger project which destroys small holder farmers (steep increase landless households as percentage of rural households in India from 35 % in 1980s to 41% in 1998/9.)

The two case of success South Africa, Brazil have been disasters given the “willing buyer willing seller formula”

And here lies the “dangerous proposal” SMALL HOLDER AGRICULTURE IS NOT ECONOMICALLY VIABLE ACTIVITY and land concentration is a sign that land is being transferred to more efficient farmers and rural poor should leave agriculture and join other non-agriculture sector and this is where the Bank proposals on labour lie.

The other problematic proposal is around the reform of labour laws and market and liberalizing labour markets. Such reforms will deepen competition, bring more effectiveness.

But I would now turn this from the perspective of labour understood from the perspective of labour such reforms will force workers out of the “protective spaces” of their rights and put in place a roadmap for race to bottom (5 million join agriculture labour force in Bangladesh, India alone).

The reduction of employment in agriculture sector is not offset or surplus labour taken up by other sectors: most of this labour may end up in refugee settle and battle our uncertainities, in a progressive chain of dispossession (77% less than ½ usd a day)

Technology and blame shifting

WDR mentions need for new agricultural technology for poor especially from ecological perspective. Giving the example of green revolution it explains how this has led to say deepening of ground water levels.

However it does not indict green revolution, but rather talks of a need for a second one and says it will have a strong reliance on GMOs
- GMOs- higher indebtedness related problems of shifting ownership
The other is the insistence on IPRs together with WTO. This has led to prejudicing the effort of local procedures and shifting of control. The experience of maize here in Vietnam also are trends in that direction.

Privatising research- in whose interest?

Science and technology only work best for poor people, when it is affordable, in control, strengthens bio diversity and builds on farmers knowledge

Governance: privatising democracy

The political economy of agricultural policy makes it difficult to create political commitment to sue agriculture for development. Governance is identified as the key as to why WB’s 1982 proposals did not convert into full, lasting realities

The six commandments of how WDRs, using bank assessment see are illustrative of the world view of the bank and its focus on what it considers is good are devoid of a of a substantive place for poor

The intent is clear in words of the report too

“roll back boundaries of state” (11.30) though contracting out public-private and.. people partnership, privatisation and devolution of management

Missing from this are proposals on redistribution of wealth and resources, social inclusion

This is through this view that the WDR gives re-entry. to long held views/ perspectives on the relationships between state, private sector and civil society

The state WDR says “will need greeter capacity to coordinate across sectors, and form partnerships with private and civil society actors ”, “and roll back its boundaries in order to overcome the mistakes of the past through widespread governance reforms”

The proposal of reform is to remove economic decisions from the public sphere of private, which can only remove the democratic impulse of people. The state should be correcting market failure, regulating competition

Alternatives and recommendations

The report says” future of small holders is not bleak, no one would disagree

but following the paths outlined in the WDR we think will extent the crisis ….. not fix it ”

A good way to analyse this report is to see the WDR through a right to food lens as to whether they strengthen of weaken local food sovereignty and systems, and enable people to claim rights

So some recommendations

• Spearheading Agrarain reform, reversing the trend of consolidation of land in hand of corporates
• Breaking Oligopolies and monopolies over foos and seeds, produce, through the regulation of supermarkets and promotion of small traders and business
• Stabilization of Commodity Prices, including sensitive floor price mechanisms
• Protection of sensitive agricultural sectors, including infant agro-processing industry
• Reform of agricultural markets to strengthen cooperative and producer groups
• Scale-up of agro-ecological and sustainable farming systems and ending discrimination of women
• Investments in R&D and agriculture extension under control of people
• Fundamental democratisation of decision making and building social bases for policy formulation and implementation and review

Saturday, December 15, 2007
New Farm Bill Maintains Criticized Crop Insurance
December 15, 2007 · The Senate passed a $286-billion farm bill on Friday expanding grower subsidies and food stamps. An earlier version of the bill contained a bipartisan amendment designed to scale back the nation's federal crop insurance program, which critics have called one of the government's most inefficient programs.

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