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Globalization's Unanswered Questions

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Published on Thursday, September 18, 2003 by

Globalization's Unanswered Questions
by Kumar Venkat

During the run-up to the World Trade Organization's failed
meeting in Cancun, most editorial writers around the world
called for an end to unfair farm subsidies and tariffs in rich
countries. After all, who could be against an open global
market in agricultural products that might offer farmers in
poor countries a way out of poverty?
The New York Times went so far as to say that few things could
improve the lives of more people -- including the more than
one billion people living on a dollar a day or less -- than a
positive outcome in Cancun.
With so much focus on a superficial leveling of the playing
field, a more fundamental question has received scant
attention: Can small farmers -- who make up the bulk of the
agricultural sector in poor countries -- survive a global
competition with large agribusinesses?
Large farmers and corporations seem to be in the best position
to take advantage of any openness in the agricultural markets
of rich countries. With their economic and political clout, as
well as advanced technologies, they can aggressively expand in
developing countries, grow large monocultures of cash crops
for export, negotiate agreements with distant buyers,
transport their products long distances, and deliver large
quantities of mass-produced food. They can also easily move up
the value chain by setting up factories to process the raw
produce into packaged, canned, and frozen foods.
Small farmers have neither the technology nor the
sophistication to easily and reliably sell to distant
consumers. They also have relatively small amounts of produce
to sell, often the surplus left over after feeding their
families. Unless they can somehow pool their products and
resources to form large cooperatives, many of them are likely
to be displaced by the globalization of agriculture. The
tendency of governments in developing countries to represent
the interests of powerful trade groups, coupled with lack of
social safety nets for those living on the borders of poverty,
puts small farmers in a precarious position.
As for the more than one billion who live on a dollar a day or
less, most of them are subsistence farmers, landless
farmworkers, and other low-wage workers. Even if developing
countries as a whole benefit from improved agricultural trade,
it is almost certain that these poorest people in the world
will see none of the benefits.
Globalization inherently favors large-scale operations that
are centralized, highly automated, and dependent on
long-distance transport. Small farmers and businesses are
immediately at a disadvantage -- their scale of operation is
incompatible with the competitive demands of global trade.
This basic feature of globalization raises another crucial
While global trade itself is not new, what is different about
today's large-scale globalization is that it is no longer
limited to specialized goods. Basic necessities like food and
clothing already travel thousands of miles to reach American
consumers. If the global economy becomes seamlessly
integrated, most agricultural and manufactured products are
likely to be transported many thousands of miles throughout
the world. These distances are unprecedented.
What will be the environmental costs of inserting so much
distance between producers and consumers of almost everything?

Just one of the effects of increased transportation is climate
change. The transportation sector was already contributing 22
percent of the global energy-related carbon-dioxide emissions
in 1995, with a projected increase of 2.5 percent a year since
then. The Intergovernmental Panel on Climate Change has stated
that, due to increasing demand for transportation, improved
technologies alone will not be enough to avoid a growth in
greenhouse gas emissions.
If long-distance trade were to increase exponentially over the
next few decades, there would be a corresponding surge in
carbon-dioxide emissions from transportation, not to mention
other kinds of pollution and resource depletion.
These are just some of the vital questions about the social
and environmental consequences of globalization that remain
largely unexamined and unanswered by the promoters and
managers of global trade. Unless these issues are rigorously
addressed and incorporated into a reformed trade regime,
widespread skepticism will remain about the possibility of an
economically sound and environmentally sustainable future for
Kumar Venkat writes about the social and environmental impacts
of technology, including globalization. He works in Silicon
Valley's high-tech industry.
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