COMM: Previously on Life...

CAROL BELLAMY: Globalisation has taken place and it's good there's economic improvements in some parts of the world, but it has created greater disparity in some parts of the world.

KLAUS TOEPFER: The disappointments are unluckily more than the positive signals. There was a huge increase in the gap between the rich and the poor.

JAMES WOLFENSOHN: Globalisation basically means that we're all living in each other's world.

COMM: In Ghana, everyone knows about trade. Everyone knows about markets. In a land of sunshine everyone has something to sell. And yet Ghana still relies on foreign aid for most of its national budget. Now the rich countries say it's time to change: countries like Ghana must begin to trade their way out of poverty. It's one of themes of this month's Summit on Sustainable Development. So, in this edition of "Life" we've come to Ghana to find out how easy selling in the world market place really is. Our guide: top Ghanaian trade expert Augustine Odongo of F.A.G.E.

AUGUSTINE ODONGO: FAGE stands for Federations of Ghanaian Exporters, it's a member-based organisation. Our, our uniqueness derives from the fact that we are member-based, we deal directly with members in the field. And that is our raison d'etre.

COMM: Augustine's job is to help Ghanaian exporters. If anyone can help understand their problems, it's Augustine. First stop, five hours north of Ghana's capital, Accra: one of Africa's biggest maize farms.

AUGUSTINE ADONGO. CEO, Federation of Associations of Ghanaian Exporters (FAGE): Er, we're going to Ejura Farms. This is one of the largest, if not the largest maize farming set-up in Ghana. The information that is available is, is this: that as a result of the impact of maize, especially for the animal feed industry - poultry in particular - they have had hold-ups on stocks which they cannot offload on the local market because they, they simply cannot compete with the price of imported maize. Now, what, what I hope we will be able to see is have a discussion with they themselves - the managers and the workers themselves - to see the full effect of this on them.

COMM: Straight to the heart of the problem: even this huge farm can't compete with maize from countries like the United States that subsidise their farmers. Some of the stocks in these silos are held for the national reserve. But mostly they just can't sell it.

AUGUSTINE ADONGO: I understand that you have quite a stockpile of maize up there in the granary. At this time of the year you should be off-loading this grain to make room for new maize coming in.

FELIX AMOAKO: Right.

AUGUSTINE ADONGO:
So why are you still keeping this?

FELIX AMOAKO, Farm Technician, Ejura Farms: Just because the government has allowed certain industries to import the maize - to import foreign maize into the country.

AUGUSTINE ADONGO: Now what is the problem with foreign maize coming into the country? Does that create any problems for the local producers?

FELIX AMOAKO: Well, yes, the imported ones are cheaper.

AUGUSTINE ADONGO: The imported maize is cheaper?

FELIX AMOAKO: Yes. Since our cost of production is high we cannot sell our maize at a very cheap price.

AUGUSTINE ADONGO: Your cost of production is higher?

FELIX AMOAKO: Yes, in terms of the fertiliser - inputs like fertiliser, chemicals like herbicides, the labour, and so forth.

AUGUSTINE ADONGO: Who do you normally sell your maize to?

FELIX AMOAKO: We used to sell to the poultry industries.

AUGUSTINE ADONGO: The poultry industry?

FELIX AMOAKO: Yes, they are the major consumption of the...

AUGUSTINE ADONGO: They are your major - the major consumers of...

FELIX AMOAKO: Of the maize.

AUGUSTINE ADONGO: Of the maize?

FELIX AMOAKO: Yes.

AUGUSTINE ADONGO: OK. And if they have access to cheaper imports, then...?

FELIX AMOAKO: They won't come to us.

AUGUSTINE ADONGO: They won't come to you?

FELIX AMOAKO: Yes.

AUGUSTINE ADONGO: So what then do you do then with the maize that you're holding in stock which the, the farmers...?

FELIX AMOAKO: We wait until - until the price goes up.

AUGUSTINE ADONGO: Until the price goes up?

FELIX AMOAKO: Yes.

AUGUSTINE ADONGO: OK.

COMM: And there's another reason the farm's maize is more expensive.

AUGUSTINE ADONGO: We've taken a look round and generally it appears that the equipment is old.
FELIX AMOAKO: Yes.

AUGUSTINE ADONGO:
Then any problem with keeping old equipment? Why are you not replacing it?

FELIX AMOAKO: I think it's all down to one point: the financial problem.

AUGUSTINE ADONGO: Financial problem?

FELIX AMOAKO: Yes.

AUGUSTINE ADONGO: What of your own income levels?

FELIX AMOAKO: Yes.

AUGUSTINE ADONGO: Generally speaking, the income levels here are quite low.

FELIX AMOAKO: Since we are not getting enough we cannot go to the managers and make unnecessary demands, you see.

COMM: No unnecessary demands - these workers on under a dollar a day know the management can't afford to pay more. Countries that face unfair competition can appeal to the World Trade Organisation, but subsidies to crops like maize are within its rules. Next stop the local town of Kumasi and one of the maize farm's customers: poultry plant Darko Farms.

AUGUSTINE ADONGO: We're now going to Darko Farms - Darko Farms is one of the largest poultry farms in Ghana. We're going out to confirm the story that we heard at Ejura Farms about the impact of imported maize because, as Ejura Farms' people told us, Darko Farms are one of their major buyers.

AUGUSTINE ADONGO: But the Ejura Farms people also explained that now they've stopped buying from them because they're buying the imported one, which is cheaper in terms of price. So we want to find out if this is true.

COMM: What Augustine discovers: the plant hasn't cancelled its orders but has cut back on expensive local maize because it's also facing competition from cheap foreign imports.

JONATHAN DARKO, Finance Director, Darko Farms, Kumasi: We do import yellow maize - but that does not mean we have stopped buying from them because of that reason - but we do import yellow maize from time to time. For about three years now, I think, we have imported. When the prices are higher we bring in the maize to give us a lower cost of production so that we can compete with the imported chicken out there. Because the price the imported chicken arrives over here is relatively low compared to what is being produced so with the higher cost of production, you can't really compete with the imported chicken.

AUGUSTINE ADONGO: So you'd, you'd put the higher cost of production here as the main cause of the higher prices that you are offering to the consumer?

JONATHAN DARKO: Er, relatively, yeah - the higher cost of production. But I also looked at it from this angle: that the goods coming from there, the maize or whatever, has been subsidised which is a lower cost for them to produce over there. So if you don't have that thing relatively here you know that you're going to run into that problem.

COMM: If they can't compete with cheap imports in their own markets, not much chance of Ghana's farmers selling abroad, no matter how tasty and well cared for the product. But cheap imports aren't the only challenge. Next stop: a banana plantation in the central lakes Region of Ghana.

AUGUSTINE ADONGO: Where - where does this come from?

ALEX YEBOAH ATAI: From the plantation.

AUGUSTINE ADONGO: From the plantation?

ALEX YEBOAH ATAI: Yes... Then the selection process begins.

COMM: Volta River Estates export to the EU - to Europe. Their problem: trying to comply with the EU's licensing rules.

AUGUSTINE ADONGO: Alex, you have quite a good set-up here and you export to Europe. Have you had any problems exporting to Europe?

ALEX YEBOAH ATAI, Personnel Manager, Volta River Estates: Indeed, there is. Er, you know, we still have to overcome this European Union licence system on banana...

AUGUSTINE ADONGO: Can you explain that further? What is this 'licence system'?

ALEX YEBOAH ATAI: Well, you know that I'm not a technical man. But what it means to me as a farmer is that we're not able to get our export into the market.

COMM: Washing the crop is easy enough. So is spraying it with chemical preservatives.

ALEX YEBOAH ATAI: ...and the spraying is meant to preserve the fruits.

COMM: What's harder is meeting EU licensing requirements like length and weight. That means using lots of chemical fertilisers - expensive, and not the kind of farming they like round here.

ALEX YEBOAH ATAI: I think that the idea of length, and sizes, in bananas are just an exaggeration of the actual matter. Because to make your bananas grow big in size and in length all that you have to do is to dump a lot of chemical fertiliser and in the next couple of months you have your big length - your big sizes and then your length.

But we talk about fair trade, and fair trade has to deal with the environment and therefore natural growing things is what comes into mind - think about consumer choice. So we as a fair trade company, we believe that we have to grow our bananas in a more sustainable way.

COMM: So in future they'd like to go organic - if consumers will pay. Meantime licensing rules and ever-changing quotas constitute for Augustine a serious 'non-tariff' barrier - not exactly a tax but still a 'restriction' on trade.

AUGUSTINE ADONGO: For somebody like me who is in trade advocacy, that appears to be another barrier to trade. They're closing the doors on us. They're opening the doors with one hand, saying: we are doing away with quotas, we are removing or reducing taxes, import duties, tariffs and so on. Meanwhile with the other hand they are closing the door by bringing in quality requirements that are far beyond the capacity of local producers, especially the small-scale producers. Here I wouldn't buy a banana using a tape measure - the farmer who's growing it hasn't got a tape to be measuring.

But if that's what Europe is requiring, then Europe has to make an effort to help us to understand them and help us to be able to develop that capacity up to the level that we'd be able to meet each other half way. But Ghana is still largely a rural and agricultural based country - about 70% of our people earn their living in agricultural activity. And part of this - the more, the more paying part of agricultural activity is that we've just committed to exports. So if as a result of the increase in quality requirements by Europe we lose out on our agricultural exports, what it means is that those who are currently engaged in agricultural exports are going to lose their jobs.

COMM: After all this you might be forgiven for wondering how Ghana's farmers can ever export at all. But time for a success story, and so we drive through the south of Ghana to Tema. Athena Foods makes pineapple juice. It's also had problems with non-tariff barriers but its canny US-trained manager found a way round them - so, one local producer who has captured a thriving export market.
AUGUSTINE ADONGO: So tell me, you've been doing exports to Europe for some time now, er more than a year - more than three years. Have you had any problems meeting the EU requirements - EU regulations and so on?

DR TONY MENSAH: Er, yes.

AUGUSTINE ADONGO: What exactly is the problem?

DR TONY MENSAH: Er, when we started, the programme was pretty good. The fruits - the analysis in Germany came out very well and it was so good that one buyer was actually using it for baby food formulation. Then we ran out of fruits. Went to Ivory Coast and with the concentrates that we made from those fruits they had high epiform residues on them.

AUGUSTINE ADONGO: This is the name of a chemical?

DR TONY MENSAH: Yes, it is a chemical -

AUGUSTINE ADONGO: And the EU has a regulation on the amount of residue

DR TONY MENSAH: Yes.

AUGUSTINE ADONGO: of this chemical that can be allowed on, on a fruit or on the, the extract of a fruit?

DR TONY MENSAH: Exactly, exactly.

AUGUSTINE ADONGO: OK. How did you overcome this problem?

DR TONY MENSAH: Er, we tried working with the...

AUGUSTINE ADONGO: The Ghana Standards Board...

DR TONY MENSAH, Managing Director, Athens Foods: The Ghana Standards Board. Er, they didn't even have the mechanism to analyse it. Then we realised that we had a big problem on our hands. While trying to resolve it we took what one may call an easy way out: we realised there was a market for organic juices and er we started adapting our plan. And this is what we did and that's what we're exporting now. Er, the EU is moving towards zero residue levels - EU's moving towards organic. It turns out organic farming - at least with pineapple and some of the vegetables that we grow and fruits we process here - the farming conditions are compatible with our rural farmers' methods of farming. So now the issue becomes: how do I encourage the rural farmers to grow more organic for me so that - I mean, I wouldn't have to worry about residue levels, just satisfy the conditions of organic fruits, organic production. Then I should have no problem with er EU because I will be where EU is trying to get.

COMM: Next stop, another success story: Farmapine on the outskirts of the capital Accra, a co-operative that helps farmers produce those tasty organic fruit.

AUGUSTINE ADONGO: Essentially Farmapine is a co-operative of farmers - small-scale farmers and exporters.

THOMAS OCRAN: What - OK, what we do is we supply the farmers with inputs to provide the quality - an ideal quality pineapple. I think if you produce a better pineapple quality, it pays.

THOMAS ADJEI: Yes, you are getting more money; at the same time you are producing more. We are expanding our farms.

COMM: But, oh dear, there's another problem: the globalised world market is fickle.
THOMAS OCRAN, Operations Manager, Farmapine: Now the farmers are producing and producing and producing and our share in the market is such that at times you have the fruits, but then the buyers will tell you: don't bring it. . These are some of the things which...

THOMAS ADJEI, Pineapple Farmer, Farmapine Co-operative: Sometimes they will ask you to bring maybe 40 tonnes of pineapple. Then at the last moment they will tell you: I will need only 20 tonnes. You see, meanwhile you have already made allocation for all these things, so this way you will be left out. And you will pay for it.

AUGUSTINE ADONGO: Why, why are they behaving like this? Why are the buyers behaving this way: they were asking for two tonnes, and eventually take only one tonne?

THOMAS OCRAN: Yeah, competition - they have competition. So where you have these multinationals, when they flood the market, you are nowhere. So, I think that has been the problem.

COMM: Boats against the current. Ghana seeing its future in exporting but somehow born ceaselessly back into the past - a past of poverty and rules that always seem loaded against it. Time for Life to take a tour of its own to find out why and to find out if the people who make and think about the rules of the world trade game have any answers. First Washington, where the World Bank has become an advocate of sustainable development through what it calls 'Fairer Trade'.

JAMES WOLFENSOHN, President, World Bank: I think there's no doubt - and I've advocated for a long time - that the trade issue is central. Er, also, the proportion of money that the developed countries are putting in to trade barriers so outweighs the amount of money that they're putting in to overseas development assistance that you only have to hear the numbers to know that you have to get the two together. In trade, for example, the developed countries spend on subsidies for agriculture 350 billion dollars a year - that's a billion dollars a day - and the amount of money put into overseas development assistance is 50 billion dollars a year. So you've got seven times the amount of money that is going for development going into just one aspect of inhibition of trade. What we want is for developing countries and the people in them to have a chance to work their own way out of poverty. And if you give them a chance to manufacture and grow but then deny them market access er then you're hypocritical.

COMM: Princeton, New Jersey: Ivy League America. On campuses across the world, some anti-globalisation protesters argue free trade harms development - remember those cheap imports. So we asked Princeton's world famous 'trade guru' if free trade is the friend or enemy of sustainable development.

PAUL KRUGMAN, Author, 'The Age of Diminished Expectations': It's not exactly a friend or an enemy, it's - to the extent it leads to economic growth it leads to some environmental pressures. Er, to the extent that it leads to economic growth it makes countries richer and more able to deal with their environmental problems. And it certainly - I think if you look on balance it's not it's not a negative, it's a slight positive.

STEVE BRADSHAW: How do you - what do you make of the critique of the anti globalisation movement and the notion that we should have - instead of having um freer trade, we should have more self-sufficiency in developing countries?

PAUL KRUGMAN: I guess I wonder if they remember what the world was like 25 years ago. See, - I'm pro-globalisation, and ultimately the reason I'm pro globalisation is I remember the utter hopelessness that we used to feel about developing countries. I mean, we used to say that developing countries was - you know, that was a joke 'cause developing countries meant that countries that don't develop. Er, and we've had successes since then - not across the board, not everywhere, not everything you want. But we've had some successes and all of the successes are associated with freer trade, with growing exports, and I just don't think - I think that people are romanticising what it was like before this, this move toward globalisation.

COMM: But can we really have free trade that would help not just the rich Old World, but developing countries too? Last stop on our tour: Brussels, from where the EU administers its subsidies and non-tariff barriers. So how does it defend them?

PASCAL LAMY, EU Trade Commissioner: I mean, if you take your example of Ghana. Ghana has, in terms of tariff barriers, 100% free access to the European Union; so no tariff barriers but, as you say, we have a number of technical barriers. They're called sort of 'non-tariff barriers' - sanitary rules, phyto-sanitary rules - which prevent, for instance, flowers, where the sort of minimum pesticide residue which we have in order to protect health in the European Union is not matched.

Now, what can we do? What we can do is what we did with Kenya on flowers. We've helped Kenya, we've done the necessary transfer of know-how, and now Kenya exports flowers into - directly into English or French or Belgium retail stores because we've provided them with the necessary laboratories. So it is possible and we are concentrating our development - our technical assistance, our development aid onto things like that.

But of course the small farmer needs to sort of have access to this testing hub, and this is back to the local governance problem. They have to organise themselves so that if they produce flowers they can go to this laboratory, and there will be five or six of these for Ghana, and then it will work.

STEVE BRADSHAW: Doesn't the fact that EU nations - and the rich countries generally - subsidise their own farmers and agriculture to the tune of billions of dollars a year, stop the developing nations trading their way out of poverty by selling their own farming products?

PASCAL LAMY: It's not very fair to compare - I mean, sort of, social policies with development policies. I mean, one could also say we spend hundreds of billions of Euros on social security - yes, we do that, but does this, does this have to be compared?

The real point is not about the amount of subsidies, the real point is about whether what we do is trade distorting for developing countries. And we believe the need to support our farmers. I mean, we only have sort of seven million farmers left in the European Union, which is not much and we prefer to keep them for reasons which have to do with our way of life.

So how, how can we do that without creating obstacles to trade to developing countries? That's the real issue, and these old debates - from sort of 50 years ago was: Aid, Not Trade; I mean, ten years ago was: Trade, Not Aid; I think it's definitely Trade and Aid for the next 10 years to come.

COMM: Back in Ghana: Augustine's last stop on the shore of Lake Volta. Ghana's big beautiful lakes and rivers are still full of fish. A time-honoured way of preserving the catch is to smoke it, also a way of adding value for export markets. But those non-tariff barriers are a problem again. Local people tried to meet the EU's hygiene and quality rules. But the EU made the rules for smoked fish even tighter - as Augustine showed us up on the hillside.

AUGUSTINE ADONGO: This, this facility was started in 1997 and completed in 1998 and it was meant to help the women who smoke fish here to come together, to come under one roof because that's - you probably have seen in the market the way they're doing the smoking - they have a traditional method of smoking.

There are three problems with that one. First of all, it wastes fuel because they are using the logs to do the smoking. Secondly, there's no consistency in the dryness of the fish and they smoke it differently - one woman does it one place, another woman does it in another place. But for exports you need some amount of consistency and also in the size of the fish. So the exporters decided that they would put up this facility and help the women to select the fishes of a certain size come and smoke it to a standard - let's say, a standard "grade" - all of them together, then they would have the consistency.

This whole facility that is standing here now, small as it may look to somebody else elsewhere, took a lot of commitment on the part of the association, the exporters. They had to put in their own resources to put up this facility. They wanted a set-up where anybody who comes in can see that there's minimum hygienic conditions. And then the EU raised the standards even far above what they had set out to achieve and therefore they had to abandon the whole, the whole exercise.

For the women here the consequences have been more disastrous. Unfortunately, because of the exporters the numbers have gone down. That means less fish is being shipped out from here, therefore income levels have also gone down. There's no doubt that it's an unfair situation.

The first thing that you can do when you are faced with an unfair situation is to complain; you just sit back and say, 'This is an unfair situation'. The second thing is to complain and appeal to the conscience of those who are creating an unfair situation to reverse the situation (people like to call that 'please level the playing field'). The third option - which we are committed to - is to find ways to build alliances between us here, and whoever has an interest, our interest, in mind at the other end, to be able to take these issues up.

So we find a way to meet the requirements half way, then we can appeal to other people to also meet us half way. That is where organisation comes in. And when we say 'organisation' I don't expect - or we don't expect the women here to, by themselves spontaneously organise themselves. That's the work of people like me, people in my organisation and similar organisations, those of us who like to call ourselves as being 'The Development Industry'. We have to make a commitment to organise our people. To help them to understand the way the market operates today; to help them to understand how the world works today; to help them to know that just by their own efforts - organised effort - they will be able to overcome some of these obstacles. And part of the work that we do in FAGE, and in our associations, is to galvanise the women to come together.

Because we realised that part of the problem we have in Africa - and in the Third World generally - is that if we want to keep up with the standards then we need to do some more organisational work. We need, as we like to put it, to become 'smarter'. We do have a lot of hard work in Africa; we do have a lot of hard work in the Third World. Where the world is moving to, generally, now is towards 'smart' work. So it's not just a matter of pushing and pushing and pushing, and digging deeper and deeper into the same hole, but finding a smarter way to be able to do things. In fact, I believe, and we have the strong commitment to this, that in a couple of years' time - one year, two years' time - we'd have a facility standing here that can meet the EU requirements. Or anybody else's requirements, for that matter.

COMM: Augustine believes that, given help, the fish-smokers of Lake Volta - and many other agricultural producers in the developing world - can compete in the globalised market.