AGRICULTURE: Farmers Denounce Link Between Subsidies and Poverty

By Marcela Valente Reprint | | Print |

Marcela Valente

BUENOS AIRES, Aug 27 1999 (IPS) - Farmers from 15 agricultural countries maintained in Argentina that the protectionist policies followed by wealthy countries were the main cause of rural poverty.

In a document to be presented to the agriculture ministers of the Cairns Group – comprised of 15 agricultural exporting countries – this weekend, the rural leaders termed the coming round of trade talks as a historic opportunity for uprooting a “corrupt system” of trade in farm products.

The agriculture ministers are meeting Saturday and Sunday in Buenos Aires to hammer out a common stance towards the World Trade Organisation’s (WTO) Millenium Round of trade negotiations.

At a meeting held here prior to this weekend’s gathering of ministers, several farmers pointed out that poor countries could not afford subsidies.

Others warned, however, that if protectionist practices continued to be followed elsewhere, Cairns Group governments – which have lobbied long and hard for the liberalisation of trade in farm products – would be forced to resort to short-term subsidies.

“We are countries that depend on agricultural output, and for us this discussion is of tremendous importance,” Alejandro Delfino, leader of Argentina’s Rural Society, told IPS.

He added that farmers would “support and closely follow” the WTO ministerial deliberations in order to bolster the position of the group’s government representatives, who are also expected to take a hard-line stance.

On Sunday, the Cairns Group ministers will issue a strongly- worded communique calling for the elimination of subsidies and demanding that agriculture be the key focus of the Nov 30-Dec 3 WTO Ministerial Conference in the U.S. city of Seattle, Washington.

The Cairns Group links Argentina, Australia, Brazil, Canada, Chile, Colombia, Fiji, Indonesia, Malaysia, New Zealand, Paraguay, the Philippines, South Africa, Thailand and Uruguay, which together account for nearly 25 percent of global trade in farm products.

U.S. Secretary of Agriculture Dan Glickman, whose country produces 13 percent of global farm output, will address the ministers as a special guest at the meeting, although he will not take part in discussions on the final document.

Cairns Group ministers and farmers believe that although the United States spends 100 billion dollars on farm subsidies annually, it could be a strategic ally against the European Union (EU) and Japan, which spend 142 and 55 billion dollars respectively on subsidies for their agricultural sectors.

The elimination of agricultural export subsidies, seen as one of the targets more likely to be approved in the next round of trade talks, is a Cairns Group standard that apparently enjoys U.S. support.

Chilean farm leader José Miguel Stegmeier told IPS that in the past few years, progress towards the gradual lifting of subsidies had been rolled back.

But he added that he was confident that the EU, which has been protecting its farmers for 34 years, would stop assisting them within the next generation.

The European sense of solidarity with farmers is waning, said Stegmeier, largely because 45 percent of recipients of subsidies in France, Germany and Great Britain are not in fact farmers, but agrobusiness companies that do not even own, but rather lease, the land.

He warned that if the EU continued to insist on subsidies, countries dependent on agricultural production would be forced to follow suit.

Indeed, in Chile, taxpayers already shell out 25 dollars a year per capita to support the smallest farmers, who are poor.

“That is much less than the 200 dollars per capita that goes to each farmer in the United States, but it marks a tendency and highlights a reality: of those 25 dollars, only three go towards production – the rest are social aid to help small farmers subsist,” said Stegmeier.

Farmers in Brazil and Uruguay described the crisis shaking the agricultural sectors in their countries as “the fruit of more than 30 years of price-distorting policies that drove our production down to rock-bottom values,” in the words of Uruguayan producer Federico García Brum.

Farmers in Argentina, Brazil and Uruguay – members (along with Paraguay) of the Southern Common Market (Mercosur), South America’s largest trade bloc – have held massive protest marches in recent weeks demanding cancellation of their debts, a halt to farm foreclosures and cheaper credit for small farmers.

Delfino said the crash in international prices of farm commodities had sapped the strength of the entire international trading system, in a crisis aggravated by competition between the United States and the EU, of which Cairns Group farmers were victims.

Rural representatives from New Zealand and Canada stressed the need to give priority to the demand that agricultural export subsidies be removed during the next round of trade talks, which are to last three years at the most, rather than eight years like the previous Uruguay Round.

The farmers used harsh terms when referring to the use of subsidies, describing their situation over the past few years as “disastrous” and “dreadful,” and labelling the present system of global agricultural trade as “corrupt” and riddled with obstacles and distortions.

“That corruption is the main cause of rural poverty, and rich countries, which maintain the subsidies, must assume their share of responsibility for the situation,” according to the farmers.