Earth Summit: Agricultural subsidies to be cut

The question of farming subsidies was the issue of the day at the Earth Summit on Tuesday, an important question because while western governments are paying subsidies to enable farmers to produce goods at artificial prices, farmers in Less Developed Countries (LDCs) with no access to subsidies do not have the chance to compete.

A good example is sugar. The European Union, where weather conditions make sugar more expensive to produce than virtually anywhere else on the planet, is the largest global exporter with 40% of the world market. The huge subsidies paid to farmers enable them to produce it and sell it at prices below those of farmers in African or Caribbean countries, who therefore lose out on the market. At the same time, the EU imposes 140% tariffs on sugar imports, while the USA paid 1.1 bn. USD in subsidies to its sugar farmers last year.

The payment of subsidies and the imposition of tariffs on imports have been used as policy by developed nations to keep the status quo very much in their favour and the scales tipped against those with less resources in LDCs. However, at the Earth Summit in Johannesburg, steps are being taken by some to redress the imbalance.

By some, but not by all. The UK has backed the stance taken by the World Bank, that by cutting subsidies, the developed nations can make a significant contribution towards enabling farmers from LDCs to compete on a more equal footing. The traditional foes of subsidy cuts, France and (who else) the USA, complain that these are not on the agenda and therefore are not up for discussion. The result is scant progress.

The western nations pay their farmers 350 bn. USD per year in subsidies, while only 57 bn. USD is given to farmers in LDCs in aid. The situation does not remain the same; it worsens by the year for the poorer-off. The World Bank states that by halving tariffs and subsidies in the developed world, the economies of LDCs would be given an annual 150bn. USD boost.

Failure to address this issue seriously is not contributing towards sustainable development, but rather is a perpetuation of imperialist policies, holding large swathes of humanity down in a strangle-hold while the rich get fatter and the poor starve or die of curable diseases. The current practice is like playing a game of monopoly with constant and unlimited access to the bank.


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