DEVELOPED countries like America subsidise agriculture, categorizing it into the Amber Box, Blue Box and Green Box. The total subsidy in America has reached more than $90 billion in 1994 itself. Even if they agree to withdraw so-called trade-distorting subsidies, in their language Aggregate Measure of Support (AMS), they would withdraw only around $23 billion. Even then, subsidy in America would remain at a mind-boggling level of more than $65 billion, which means nearly $22,000 per full-time farmer in their country. Developed countries insist on further opening developing countries’ markets without reducing their own subsidies. The WTO negotiations at Cancun failed mainly because of this glaring contradiction. In this context, developing countries may have to insist on a Livelihood Box in order to protect their agriculture and their peasants.

The huge support for agriculture in the advanced countries hurts developing countries in two ways. It makes our farm exports uncompetitive in the global market because it depresses world prices, often below the cost of production. It facilitates massive dumping of their products in the developing country markets, in the process, destroys domestic agriculture. One can also argue that in the absence of a large subsidy to agriculture in developed countries, world prices would not have fallen as they did in the 1990s. Withdrawal of subsidies in developed countries may help developing country exports as well as restore agricultural production in countries now hurt by subsidised imports. But, reduction of domestic support and import tariff on agriculture in developed countries may not automatically benefit the developing countries as a whole, because there are contenders in the global marketplace other than OECD (Organisation For Economic Cooperation and Development) countries (America, Canada, Japan and European Union) like Australia, New Zealand, Brazil, Malaysia and China.