September 21, 2004
Indian farmers have been losing $1.1 billion annually to their counterparts in developed countries, says a new study. The total lost agriculture-related income for developing countries because of trade-distorting subsidies that enrich farmers and traders of developed countries amount to $24 billion, says the study by Washington-based policy watchdog International Food Policy Research Institute (IFPRI).
"This is a lower-bound estimate that does not count all the dynamic and spill-over effects from lost agricultural income," states the study based on a computer model of global economy done in the backdrop of conflicts in the World Trade Organization (WTO).
The study found the US responsible for a third of all distortions to agricultural economies of developing countries. All European Union countries put together were responsible for about half of the distortions while Japan and other high-income Asian countries caused another 10 per cent of income loss.
China has been losing most in terms of value at an annual rate $2.3 billion. On a regional basis, agriculture in Latin America and the Caribbean loses about $8.3 billion in annual income because of trade measures in the developed world. Asia's developing countries lose $6.6 billion. The loss to perpetually famine-stricken sub-Saharan Africa is close to $2 billion.
"However, in percentage terms, smaller countries in South America, Central America and the Caribbean, as well as several countries in sub-Saharan Africa, are the most affected, with losses of about 10-15 per cent of total agricultural and agro-industrial incomes," according to the study. The absolute dollar amounts of lost income are greater for Latin America and the Caribbean for whom, however, agriculture is less important as a percentage of gross domestic product (GDP). Sub-Saharan Africa and South Asia fall on the other end of the spectrum, with large rural populations and greater dependence on agricultural income, it points out.
More Information on Agricultural Subsidies
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