A little noticed news item of immense proportions was missed by the media in all the coverage of the Middle East.

The Doha round of talks failed because the Industrialized Nations could not did not offer a deal that was acceptable to the developing agricultural nations of the world. The dream of a more equitable world with fairer trading policies that was promulgated right after Sep 11th 2001 seems to have been safely killed.

To put a bit of context around the whole issue – The governments of rich industrialized economies of the world (where the agricultural economy comprise of about 2% of the population) provide huge subsidies to farmers in their respective countries. Thing to be kept in mind is that these arent what we typically associate with the word “farmer”. These are huge corporations who engage in industrial size farming encompassing millions of acres of land. As a statistic, about US$ 2 billion of subsidies were given to the cotton farmers in the United States last year. And 80% of those subsidies went to the top 20% of the largest farmers. Anyways, consequently, farmers in poor countries engaged in growing the same crops are instantly rendered uncompetitive. Because they can never compete on volumes and prices based on these huge subsidies.

The Doha Round was intended to, at a simple level, reduce government subsidies in Agriculture so countries and farmers from the non affluent parts of the world had more of an even playing field in international trade of agricultural goods. The hope was that, over time, it would reduce some of the disparities between the “haves” and “have-nots”

The problem is, that Bush in the United States and Blair in the UK, simply dont have the kind of political leverage and capital, eroded so severely by the war in Iraq and elsewhere, to push though an agreement as important as this. Because the agriculture lobby, led by big agri-business is just too powerful – some say – disproportionately powerful for its size. The compulsions of democracy.

Some of the arguments I have been researching about, in favor of not reducing subsidies are ludicrious at best, condescending and tinged with racial presumptions at worst. For e.g. I read a point of view (the name of the person escapes me at the moment), where he talks about how some of the countries that would benefit from a successful Doha Agreements ( read Brazil, South Africa, India, a number of very impoverished African nations) have bad infrastructure and transportation mechanisms (which dilutes their competitiveness anyways), corrupt government officials and other important functionaries etc. The consensus this gentleman reached was that these fundamental issues need to be sorted before the billions of dollars of subsidies (given by rich governments to rich corporations) can be reduced!

So he wants the infrastructure to magically improve. He wants societies to magically clean up corruption because of “promise” by the rich and powerful corporations and governments to somehow level the playing fields when the conditions are ripe.

Like was promulgated in November 2001 in the first round of Doha Talks.

And meanwhile, if I were a poor farmer, I would just wonder – the logic of it all.