Global Policy Forum

After the crisis, is now the moment to cut Western farm subsidies?

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Gemma Ware

March 30 2010

 

With the US and Europe running huge budget deficits and desperate to cut spending, should Africa seize this moment to push for a fairer system of world trade to help its farmers access world markets?

It's hard to be optimistic under grey skies. But as rain lashed down this morning on Montpellier, France's centre of agricultural research, the cows in the surrounding hills were sitting pretty.

It's worth saying again: every cow in the West receives $2.5 a day in subsidies, compared to 90 cents a day for every child in the developing world.

But this global financial crisis presents an opportunity to get rid of distortions. And there is little doubt that at $100bn a year each, US and European farm subsidies are distorting world trade.

Anxious governments in Europe and the US scratching around to reign in budget deficits are deaf, however, to calls to radically reduce the subsidies that cripple African farmers' ability to compete fairly.

There has been little real optimism of change this week on the sidelines of the first ever Global Conference on Agricultural Research for Development here in Montpellier, which hopes to produce a framework better linking scientists with the farmers using their research.

Yes, it's an opportunity they're saying, but we've been here before. Two years ago during the food price spike the same call was made- and nothing changed.

In the West, there are now some refreshing sings of political will for cuts. But they are vulnerable to being snuffed out. Under pressure to cut back a projected deficit of $1.5 trillion in 2010, Obama's 2011 draft budget proposes cuts of $2.5bn over the next 10 years in direct farm subsidies plus another $8bn in cuts to agricultural insurance. But just like when Obama tried - and failed - the same move last year, the lobbying juggernaught steered by the US agricultural sector is more than likely to stop this reform in its tracks.

In Europe, although the UK is pushing for changes to the Common Agricultural Policy, French President Nicolas Sarkozy recently made it clear that he would rather create a crisis in the EU before giving it up. French farmers, CAP's biggest beneficiaries, cheered.

Farm subsidies are an unfair political reality. Africa shouldn't be wasting its breath trying to change them.

But, that doesn't give African politicians an excuse for inaction when it comes to agricultural policy leaps. There are countries - like China, Vietnam and Brazil - whose agriculture has thrived despite the massive subsidies in the West. The reason? Policymakers who looked 50 years ahead, saw where their country needed to be, and invested in agriculture.

Rather than sit back and let the West dump cheap, surplus food on their doorstep, perhaps governments should be standing up to say no. The temptation may be to provide cheap food so that the people don't take to the streets and riot, but somebody needs to break the vicious cycle says Namanga Ngongi, President of the Alliance for a Green Revolution in Africa. Investments in domestic agriculture such as those taken by Malawi, that position agricultural spending as spending for the public good just like money for education and healthcare, will be one way to start.

The Mediterranean region here around Montpellier is battling its own issues around biodiversity: warming climates are pushing some crop varieties further north. Nobody knows what type of crops will move in to fill the gap, or how the migrant plants will fare in new soils.

Africa is facing even greater challenges from climate change. Getting policymakers to listen to the researchers to make sure investments are made with an eye on what can be grown in the future, will be just as important.

 
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