South Africa's chief trade negotiator Xavier Carim has cautioned that South Africa may not achieve all the results that it had hoped for at the upcoming Ministerial talks in Hong Kong, particularly given the European Union's (EU) intransigent position on agriculture.

He indicated, too, that the ambition surrounding the meeting itself may now have to be downscaled, and picked up at a second gathering, which some are dubbing 'Hong Kong II', sometime during 2006.

The EU has made a proposal that is not seen as far-reaching enough to improve market access to developing nations through reducing agricultural subsidies. At the same time, it wants developing countries to make extensive cuts on import tariffs.

Some 50% of what South Africa farms goes to the EU, while its second-largest market is Africa.

Internationally, the media is indicating that the negotiations are in trouble and seems to be shifting the blame from the shoulders of the EU to developing countries.

The union, he argued, should not expect developing countries to pay for market access by forcing them to reduce their industrial tariffs. The ball, said Carim, is literally in the bloc's court as developing countries still want to see further moves on market access.

It seems, he said, that a full agreement on modalities will not be reached by the end of this year, yet it is important to keep the process going forward and there seems to be a lack of understanding concerning developing countries' trade interests.

“African countries do not have a common approach to development. Some developed countries have created confusion by reinterpreting Africa's development objectives, and by creating the notion that African countries are not interested in market access as they have preferential trade agreements in place.”

The EU has already made it clear that the latest offer is its final offer, and that it is not budging. As such, it seems highly unlikely that developing countries will achieve their original objectives.

Nevertheless, Carim said, developing countries were determined that the negotiations should not result in the same failure as Cancun: “We are now focusing on managing our expectations, and keeping the negotiation process going.

“Hong Kong will be a milestone and not the end of the road.

“One of the most important lessons we learned from Cancun was that if we allow recrimination and the blame game to poison the atmosphere, it is difficult to relaunch talks.”

In light of recent developments, it is expected that negotiations will intensify next year.

There is much at stake in agricultural negotiations, both for South Africa and the region, commented the floor. It is important to take a regional view and to ensure that the country is better prepared that what it seems to be, added the delegate.

The broad viewpoint is that it seems as if an agreement on modalities is not possible and that Hong Kong will only be a stepping-stone to a new round in 2006.

In fact, it is possible that there may be a Hong Kong two in the middle of next year.

Talks are still going on in earnest but the chairperson of agricultural negotiations is due to release a report in the next day or so.

It is unclear what this report will contain, in what form it will be presented at Hong Kong as and whether talks will continue after its release.

At the beginning of next week Brazil, India, the US and the EU are to meet to discuss agricultural issues.

There are three pillars involved in the agricultural negotiations, with the first being, perhaps, the most contentious.

Market access for developing countries is a sticking point from which the EU, in particular, is not prepared to give any ground.

The second pillar, that of domestic support, is one where developing countries would like to see a substantial reduction in trade-distorting domestic subsidies.

Finally, export subsidies that often are protectionist should be done away with.

Echoing the mood that it seems as if South Africa cannot look forward to an ambitious outcome was AgriSA's Hans van der Merwe.

He added that it is important now is to keep the process on track and keep parties committed to an ambitious outcome at the end of the current Doha round, while, at the same time, balancing agricultural discussions with the other items on the agenda.

There is no doubt that agriculture is important in the lives of millions of South Africans.

SAIIA research fellow Catherine Grant, presenting research compiled by professor Johann Kirsten, pointed out that it was not until the 1990s that South Africa's agricultural sector became liberalised.

Today, it is a dual sector with 87% of land being owned by 45 000 large commercial-scale miners and the remaining amount in the hands of small subsistence farmers.

These 2,5-million households that rely on farming for food and an income are on government's list at the rounds.

Carim affirmed that the government had a strongly developmental approach and wanted to see these farmers 'graduate' to the commercial arena.

The situation in southern Africa, however, is even bleaker.

Some 35% of the regions' gross domestic product depends on agriculture while 70% of southern Africa's people depend on this sector for food or an income, said Oxfam America's David Malungisa.

While South Africa is a net exporter of food products as it is self-sufficient, at household level there are concerns over food security.

Some 1,5-million children have malnutrition indicators.

Recently, trends in the industry in South Africa indicate a move towards more value-added commodities, such as wine.