Global Policy Forum

By Anthony Browne

Britain backed calls yesterday for the West to reduce the $350 billion (£228 billion) in subsidies that it pays its farmers each year so poor countries can compete on a level playing field.

The subsidies that rich nations pay to protect their farmers and the punitive tariffs they impose on imports from developing countries have emerged as the most contentious issues at the Johannesburg World Summit on Sustainable Development.

The World Bank said that cutting subsidies was the single biggest way the West could help to relieve poverty in the developing world. Little progress was made, however, because the United States and the French insisted that cuts to subsidies were off the agenda.

Agreement was reached on a few small-scale initiatives to help farmers from the developing world to sell their produce to the West.

A campaign, called Jubilee 2020-2030, which is modelled on the Jubilee 2000 campaign to write off Third World debt, is being started today to demand that the West gives developing world farmers more opportunities.

The $350 billion that rich nations pay in subsidies to their farmers is nearly seven times the $57 billion that the West gives in development aid to poor countries.

The World Bank has estimated that if subsidies and tariffs were halved, it would boost the economies of developing countries by $150 billion a year.

The scale of the subsidies means that farmers from wealthy countries can undercut farmers in the Third World in their own market, while the high tariffs imposed on imports make it impossible for farmers from the Third World to gain access to Western markets.

Ian Goldin, the director of development policy at the World Bank, said: "When we spend $1 billion a day of taxpayers' money on protecting agriculture in rich countries, we don't serve sustainable development, and we certainly don't serve the cause of economic growth and prosperity in the South."

Margaret Beckett, Secretary of State for Environment, Food and Rural Affairs, told the summit that Britain backed calls to cut subsidies.

"Subsidies limit the access of developing-country products in developed-country markets and distort domestic markets in many developing countries. This is the reason why the UK supports commitments to reduce all forms of export subsidies and trade-distorting domestic support."

Europe is the most expensive place in the world to produce sugar, but EU subsidies have allowed European farmers to become the biggest sugar exporters in the world, with 40 per cent of the total market.

Last year the EU sold 770,000 tonnes of sugar to Algeria, and 150,000 tonnes to Nigeria, which deprived farmers in Zambia or Malawi of the opportunity to sell their sugar, even though they can produce it far more cheaply.

Meanwhile, the EU imposes tariffs of up to 140 per cent on sugar produced in the developing world and the US has just increased the subsidies that it pays to its sugar farmers to $1.1 billion a year.

The amount of maize sold by US farmers to Mexico has increased by a factor of 18 since 1993, and a quarter of the maize consumed in Mexico is now produced in the US.

Rather than tackling the issue, the summit agreed that it should be addressed by the Doha Development Agenda of the world negotiations, which should be completed by 2004. Last year's "Doha Round" agreed that subsidies should be reduced, but set no targets.

The EU is reviewing the common agricultural policy so that it will be less geared to production and more focused on encouraging farmers to protect the environment.

Life is sweet - for some

· Sugar costs £319 a tonne to produce in the EU.

· EU farmers are guaranteed a subsidised price of £415 a tonne, and are protected by a 140 per cent tariff on non-EU sugar imports.

· The subsidies have led to a surplus of seven million tonnes of sugar, which has been dumped on the world market, depressing the price to £121 a tonne.

· Farmers in developing countries grow sugar cane rather than beet. It costs only £183 a tonne to produce, but this price is not competitive because of the EU dumping.

· The subsidies and tariffs that inflate the price of sugar in the EU to £4.30 a kilogram also deflate the price in unprotected markets to £1.65.

Source: Oxfam and British Sugar

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