Free or even fair?
Bangkok Post, 11 July 2005
Free or even fair?
As the 4th round of Thailand-US free-trade negotiations start today in Montana, a key issue will be the shape of any future intellectual-property regime. The survival of Thai jasmine rice, and the people who grow it, may very well depend on whatever system is finally agreed upon
Story by VASANA CHINVARAKORN
Suntorn Sihanern’s reward for discovering the world-famous strain of rice we call khao hom mali came to the princely sum of 500 baht. But he’s now worried about the future for the variety he affectionately refers to as "Mae Mali". Under the terms of an imminent new international-trade regime, jasmine rice may one day have to depart her homeland and Thai farmers — for good.
"Mae Mali is a very sexy lady, with lots of suitors after her. I’m quite concerned that she may sooner or later marry a farang [foreigner] and move to the United States. We’d all be very lonely then."
The 82-year-old retiree made this remark during a recent seminar at Chulalongkorn University entitled "The Fate of Thai Jasmine Rice Under the Thailand-US Free Trade Agreement". Suntorn was invited to give a keynote speech about the historic find he made in 1950 when he decided to break his boss’ rule about only collecting grains of rice from fields of at least 15 rai in area. At the remote hamlet of Bang Khla in Chachoengsao, the young Ministry of Agriculture official came across a local variety so aromatic and tasty that he decided to overlook the fact it was only being grown in tiny quantities. Two hundred ears were harvested and sent to ministry headquarters in Bangkok. After a series of tests and further selective cultivation over the nine years which followed, khao hom mali, as we know it today, was born.
In 1992, Suntorn was given a plaque — the cost of having it made came to about 500 baht — in recognition of his contribution to making Thailand the world’s No. 1 exporter of jasmine rice.
Suntorn reckons he’s now probably the only person still alive with first-hand experience of those early days. "All the other guys have long gone to ’trade charcoal’," he said, using a metaphor for dying that, while witty, has a forboding ring to it. For the children of today could very well be the last generation of Thais to be able to claim jasmine rice as their own, as part of our nation’s heritage.
At the Chula gathering, various speakers — farmers, exporters, activists, academics — took turns dissecting the potential scenarios awaiting jasmine rice. The prospects seem rather grim, though.
Why so? Proponents of free trade like to list the benefits Thailand could earn from bilateral trade agreements. A report in 2003 by the Thailand Development Research Institute (TDRI) calculated that the Kingdom’s agricultural exports to the US would increase by five to 22 per cent, while US exports to Thailand would also rise by anything between four and 67 per cent.
In a telephone interview with Outlook, Michael Delaney, counselor for economic affairs at the US embassy in Bangkok, said an FTA (free-trade agreement) deal would allow Thai farmers better access to the American market with a substantial reduction in, or even elimination of, tariffs and other trade barriers.
Thai rice, in particular, seems to be basking in the limelight. The US has been the largest importer of this commodity for at least the last two years (2003 and 2004), averaging about 300,000 tonnes a year. And about 80 per cent of that was the ever-popular jasmine variety, worth over six billion baht a year to the Thai economy .
For rice traders like Wanlop Pichpongsa, however, the impressively high share of the US market we now enjoy makes him doubtful that any free-trade deal would boost that figure in any significant way. Wanlop, an executive at Capital Rice, one of the country’s top exporters, raised this issue at the seminar, adding that the current tariffs on rice are already reasonably low.
According to data from the Ministry of Commerce, the tariff in 2001-02 for white non-glutinous Thai hom mali rice was 1.4 US cents per kilogramme.
At present, Thai jasmine rice can command prices as much as 50 percent higher than those for American long-grain varieties. Thus the assiduous attempts by US companies and research institutes to develop new strains that might be able to compete with Thailand’s premium crop (see "Will history repeat itself?").
In the eyes of FTA opponents, the US is a potentially formidable rival in a business long associated with the Kingdom.
One distinct advantage enjoyed by American farmers and exporters is the huge amount of subsidies and other direct payments provided by their government. The US Farm Bill of 2002 set a target figure of $180 billion (7.6 trillion baht) to be spent over the next 10 years.
And Buntoon Sethasiroj of the National Human Rights Commission’s sub-committee on biological resources doesn’t think an FTA with the US will be able to tilt the balance. It’s highly unlikely, he said, that American politicians would push for amendments to the Farm Bill to create a truly level field for competing products. The 2003 TDRI report also mentioned the concern of Thai exporters that "the US rice export subsidy and domestic support [will] not only allow American rice to have a competitive edge over Thai rice in the world market, but will also enable US rice to unfairly penetrate the Thai market".
Nor will the possible repercussions of the bilateral deal be limited to rice alone. The same TDRI paper warned farmers who grow soya beans, corn, potatoes, peanuts — indeed, any crop deemed not competitive enough — to switch to "other crops or other economic activities" (the writers did not specify viable alternatives) once the FTA comes into effect. The same economists also predicted that Thai livestock farmers, especially pig and cattle breeders, may have to close up shop, too.
More worrisome than the loss of jobs in the agricultural sector is the potential loss of jasmine rice as an exclusively Thai entity. Here, opinions are divided. Proponents argue that an FTA will lead to a transfer of expertise and technology which will boost farm productivity in Thailand. The naysayers envision a totally different picture: An influx of genetically modified varieties of rice; rampant bio-piracy; a monopoly over seed supplies by (American) conglomerates; and the demise of self-sufficient, small-scale farmers.
And that would be just the beginning, FTA critics say. Witoon Lianchamroon of Biodiversity and Community Rights Action (Biothai) believes admitting GM rice to the Kingdom, something which the FTA would technically endorse, would be akin to accepting delivery of a Trojan horse: Seeds for other crops would follow suit, seeds that farmers would have to continue buying from the multi-national companies year after year.
At present, the majority of Thai farmers keep back seed rice to sow in the following planting season, an estimated 900,000 tonnes a year. The Ministry of Agriculture offers another 50,000 tonnes for sale at an average price of 12 to 15 baht per kilogramme.
What could happen if we sign an FTA with the US? Under similar schemes the US has initiated with other countries (the Thai authorities say they have to keep confidential the content of all ongoing negotiations), critics have pinpointed the issue of intellectual property rights (IPR) as the one with the most serious ramifications. Simply put, the US side would demand an overhaul of our existing laws on protection of indigenous plants and farmers’ rights, they say. In their place would emerge a plethora of patents, copyrights, trademarks and, of course, huge penalties for anyone who violates the new rules.
A look at the US-Chile deal, inked in mid 2003, is telling.
The US requested the Chilean government to systematically implement a series of "stricter" laws that would guarantee the rights of inventors (capital-intensive multinationals for the most part). The current Agreement on Trade-Related Aspects of Intellectual Property Rights (Trips) is no longer enough. Chile must promise to ratify the Patent Cooperation Treaty (PCT) by January 1, 2007. Once this is done, a successful application for a patent in, say, the US, will be automatically acknowledged by the patent office in Chile. (Curiously, the Thai government floated the idea last year of signing the PCT, even though it had barely begun FTA negotiations with the US.)
Next in the ratification queue — the deadline for Chile is January 1, 2009 — are three more laws, namely, the International Convention for the Protection of New Varieties of Plants (widely referred to as the Upov Convention of 1991), the Trademark Law Treaty (1994) and the Convention Relating to the Distribution of Programme-Carrying Signals Transmitted by Satellite (1974).
All these long-winded, legalistic names may sound like Greek to some. But for individual farmers, the consequences of these laws will be particularly grave. In Thailand, it will mean turning the existing legislation almost upside down.
Presently, our 1999 Plant Variety Protection Act acknowledges the right of farmers to save and exchange seeds among themselves. So-called plant breeders are required to disclose the origin of their genetic resources and to obtain the prior, informed consent of the "rightful owners" — farmers who have preserved varieties developed by their ancestors — who will in turn be entitled to an appropriate share of any future benefits. Plant breeders must also be able to prove that any new variety will not pose a threat to the environment.
In contrast, the Upov Convention protects only what are deemed to be "new" inventions — in terms of novelty, distinctiveness, uniformity and stability. It has been criticised as having been designed "with commercialised farming in developed countries in mind". Practically speaking, the concept of indigenous farmers’ rights does not exist at all in this realm.
Where could this lead us?
Well, Thai farmers may wake up one day to find that some American researcher or company has obtained a patent over a jasmine-rice variety. To illustrate this point, Witoon of Biothai cited the case of Mexican farmers who have been badly affected by the overt use of intellectual property rights legislation.
In 2001, more than 22,000 growers of an indigenous Mexican bean called mayacoba discovered that they would have to pay a royalty fee of six US cents for every pound (0.45kgs) of the crop they sold to American importers (about 23 per cent of the market price at the time). This happened because a US businessman named Larry Proctor had obtained a patent on what he claimed to be his "invention" of a similar kind of bean which he had called enola, apparently after his wife. He also filed lawsuits against 16 small seed-bean companies and farmers who were selling mayacoba in the US; Mexican exports of the bean dropped by 90 per cent as a result. A counter-lawsuit has since been filed on behalf of the Mexican farmers.
"Thai jasmine rice might suffer a similar fate down the road," said Witoon. "Someone could come along and say that the Thai variety has similar traits to what he or she has obtained a patent on. It would take years and a lot of resources to counter such a claim, and to re-establish the reputation of Thai rice."
Claims of ownership of "traits" have proven to be a sensitive, often litigious matter. And closely tied to the intellectual-property quagmire is the issue of genetically modified seeds. Early this year, Syngenta, another biotech multinational, applied for a "multi-genome" patent covering the flowering sequences in at least 40 major food crops, including rice. If approved, the company would be able to levy handsome fees in 115 countries around the world. But a month-long campaign by several farmers’ organisations, trade unions and other civil-society bodies finally forced Syngenta to let its application lapse.
But how much longer will it be before someone else make a similar attempt?
The US-Chile FTA specifies that there must be "market access" for GM products. Last year, biotech giant Monsanto submitted "written comments" to US Trade Representative Gloria Blue expressing its "hope" that the slow progress in introducing biotech products to Thailand "might be addressed and resolved either in a parallel fashion with the FTA negotiations or directly within the context of the negotiations.
"It would be a modest, yet important first step for ensuring that the Royal Thai Government is committed to a timely, transparent and science-based process to evaluate biotechnology crops, to resume the limited government-station field trials that are necessary to demonstrate the safety of the product and to build public confidence in the regulatory process. [Without field trials,] approvals cannot be obtained, therefore impeding the introduction and commercialisation of these products."
After years of experimentation, Thai scientists recently discovered the "aromatic gene" in khao hom mali; they even succeeded in giving a fragrance to plain, short-grain Japanese rice. Meanwhile, complaints abound that our traditional jasmine variety is losing its unique, appealing scent.
A possible explanation for this was offered by a Ministry of Agriculture official at that Chula conference. He claimed that he had come across several instances where lower-quality rice had been mixed in with the jasmine variety. He went so far as to claim that some wholesalers were using perfume to boost the fragrance of jasmine rice!
Moreover, the business of naming varieties is, in itself, quite confusing. Wanlop of Capital Rice said that a lot of people have asked him for clarifications on competing labels, one example being whether "Thai fragrant rice" was the same as "Thai jasmine rice". He even had to field an enquiry once about whether "Hom Mali rice" — the label promoted worldwide by the Thai government — came from the West African nation of Mali!
What will happen to this national treasure? Should it occur, will the "demise" of Thai rice come about as a result of a deed by one of our own, by an outsider, or both?
And is Thailand ready to add to the complexity by introducing and enforcing a whole set of complicated, multi-layered rules? The 2003 TDRI report is not encouraging in this regard.
"The benefits for Thailand from inappropriately high standards of IPR are, at best, long term, while the costs of adopting them are real and immediate. Such costs include legislative and administrative costs involved in revising current laws and regulations, legislating new ones and implementing them. However, the current legal system is already over-burdened and can hardly accommodate [any] new obligations, at least in the short run."
Delaney of the American embassy envisions a very comprehensive FTA, covering all aspects of trade and investment between the two countries; one that will be considerably "more ambitious" than any bilateral agreement Thailand has ever signed.
He conceded, however, that there should be ample room for negotiations. "I often have to remind my Thai friends that it must be a win-win deal or there won’t be a deal," Delaney chuckled. One idea he proposes is the sending of a "side letter" to Washington asking the US government to consider allowing explicit protection in certain sensitive areas.
More than half a century has passed since he discovered jasmine rice and today Suntorn is living on a monthly pension of around 10,000 baht. Not a huge sum by any means but, being a frugal sort, the octogenarian says it’s enough to get by.
He even has some funny anecdotes about his life since retirement. One day, a former American Peace Corps volunteer dropped by; he once worked with Suntorn during a posting in Chiang Mai.
"He usually addresses me as Khun Por [Father]. And during his visit, he said to me: ’Father, if you were in the US, you’d be enjoying a luxurious life now, just living off the bonus [royalties] with no need to work at all.’
"I replied that my country had already given me 500 baht. And that that was good enough. It’s a lot better than nothing." At which point the old man gave a loud, hearty laugh.
Next in the "Thai Farmers Today" series: Traditional seed exchange — there’s no charge here!
Several web sites provide downloadable reports and analyses on the various free trade agreements; among the more noteworthy ones are those maintained by the WTO Watch Group (www.thailandwto.org), the FTA Watch Group (www.ftawatch.org) and the Thailand Development Research Institute (www.info.tdri.or.th) - see the latter’s 2003 report on the Thai-US Free Trade Agreement.
