Imported Agricultural Goods

The United States, for instance, increased its farmers' subsidies to $58 billion in 1996 from $50 billion for 1986-88. The European Union increased its subsidies to farmers to $95 billion in 1996 from $83 billion in 1986-88. (22)

Another advantage of developed countries is in the application of the 'special safeguard' policy. Countries previously using quantitative restriction or quotas on imported agricultural goods are required to replace these with tariffs. In exchange, they get special safeguards for their farmers. These safeguards consist of ways of assisting farmers in times when imported agricultural goods flood their country or when the prices of agricultural goods become too low because of cheap imported agricultural goods. In most cases, these safeguards for farmers take the form of subsidies. On the other hand, many developing countries used to have no quantitative restrictions on imported agricultural goods. (23)Since these countries had no imported agricultural goods quotas to do away with, they are not entitled to special safeguards for farmers.

Still, the most significant advantage that developed countries have over developing countries is their possession of large amounts of money that they can use to subsidize their farmers. On the other hand, the scarcity of financial resources on the part of developing countries make it almost impossible for them to aid their farmers substantially. (24) This basic reality puts farmers of developing countries at a clear disadvantage when their agricultural products come to direct competition against similar products of farmers in developed countries.

Trade liberalization, which is characterized by the removal or reduction of quotas on imports and reduction of tariffs, has been the objective of the World Trade Organization and, before it, the General Agreement on Tariffs and Trade.

From an average of 42 percent tariff in 1981 to 1985, it was reduced to 28 percent in 1991 and further reduced to 20 percent in 1994. When the WTO was established in 1995, the tariff was reduced to 9.7 percent, then down to 6.1 percent in 2011. At present, tariffs on imported agricultural products is only about 8.7 percent. (25)

Moreover, agricultural support is far from being enough. Only 5.9 percent of the annual national budget goes to agriculture, and this amount even includes allocation for
compensation to former landowners for land taken away by the government for use in
its land reform program. (26)

Philippine agriculture has declined. From a share of 22.6 percent of the national economy in 1990 to 1994, the figure went down to 16.8 percent. Agricultural job have been lost. In five regions ' Davao, Bicol, Caraga, Eastern Visayas, and Northern Mindanao ' about 690,000 agricultural jobs were lost. (27)

No improvement in farmers' wages took place. While the average wage in 1995 was $2.92, it decreased to $2.82 in 2010. (28)

Data from the Bureau of Agricultural Statistics showed that in 1994, only four percent of the rice supply was imported. It increased to 19 percent in 2010. The list below shows the increasing importation of food. Comparing figures in 2010 with those of 1994 (the year befor the Philippines became a WTO member), we get a 70 percent increase in imported peanuts, a 65 percent increase in in garlic, a 54 percent increase in imported mongo, and a 45 percent increase in imported coffee.
(29)
These data show that our membership in the World Trade Organization and our obedience to its requirements of removing quantitative restrictions on imports and large reduction of tariffs on imports, coupled with the inherent advantage of developed countries in technology andthe inability of the government to allocate funds for agricultural subsidy, have worked against the weakest but largest sector of the economy: the farmers.

CONCLUSION

No, membership in the WTO and obeying its requirements have not benefited the Philippines. And hardest hit have been farmers, whose condition before the country's WTO membership, had not been good, in the first place. Obeying the WTO have made their lives worse.

The disadvantages from being a member of the WTO have been derived from the WTO's insistence on the removal of quantitative restrictions and large reduction in tariffs on imports. Developed countries get additional advantages from being able to take advantage of loopholes ' such as those in the Agreement on Agriculture ' in WTO rules on government subsidies to producers. On the other hand, there seems to be no end to the failure of developing countries, which includes the Philippines, to provide enough subsidies to their producers.

Imports, including agricultural products, from developed countries can freely enter other countries because of WTO's rule that quantitative restrictions by all its member-countries should be removed. When these compete against the products of a poor country, the latter is at disadvantage because it is prevented by the WTO from imposing high tariffs that will make local products competitive against imports. Government subsidies to producers, especially farmers, are available in developed countries and absent or terribly insufficient in developing countries.

Source: Essay UK - http://turkiyegoz.com/free-essays/economics/imported-agricultural-goods.php


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