AFRICA: U.S. Farm Subsidies Hurting Africa's Development

In a renewed campaign, African trade ministers have urged the United States to remove agricultural subsidies that are hurting African farmers.

''We need to maintain pressure on the U.S. to remove agriculture subsidies because this is an impediment to our development,'' said Moody Awori, Kenya's Vice President, when opening a one-day meeting in the capital Nairobi, Friday.

''The removal of these subsidies will be a clear demonstration of the ability of the multilateral trading system to respond positively to the genuine cry of the many poor African farmers who live on less than one dollar a day,'' he said.

The 20 trade ministers, who met under the auspices of the 53-member African Union (AU), called on the United States to indicate when it would stop subsidising its farmers, as the Doha round of World Trade Organisation (WTO) negotiations get close to conclusion in 2006.

This round began in 2001 at a WTO ministerial conference held in Doha, Qatar. The negotiations seek to reduce trade barriers and make trade fairer for developing countries.

The talks subsequently continued in Cancun, Mexico, Geneva, Switzerland and Hong Kong, China in 2003, 2004 and 2005 respectively. But they failed to make any headway because agricultural protectionisms, including providing agricultural subsidies to farmers, have continued to be observed in rich countries.

The European Union (EU) has also urged the United States to tackle the issues around subsidies. ''The U.S. has been shy to tell us how they will deal with subsidies. They have not told us exactly what they will be doing,'' Karl Falkenberg, the EU director general for trade, told journalists in Nairobi on the eve of the African trade ministers meeting.

He said the European Union no longer pays its farmers to produce more products; instead, farmers were being paid to produce less but quality products, which he said, still created a demand for more African imports. ''If they produce less, it means that we will have to import more from Africa to satisfy our needs. This will lead to more export potential for Africa. We intend to defend African commodities into our markets because this is of benefit to Africa,'' Falkenberg added.

But critics contend that the EU reform on subsidies is still disadvantageous to poor countries which cannot afford to subsidise their farmers to produce more, let alone quality products.

According to Oxfam, an international charity, between 1999 and July 2005, American producers of cotton received more than 18 billion dollars in U.S. subsidies.

''The market value of this production during this same period was 23.39 billion dollars. This translates into a subsidisation rate of 86 percent, which means for every dollar received by cotton farmers from their sales, they received an additional 86 cents in subsidies,'' it said.

According to the charity, African countries have lost more than 350 million dollars in potential export revenue as a result of depressed world prices in the last two years.

''For some very poor countries, achieving progress on cotton offers the biggest opportunity of the Doha Round. With 20 million African farmers, dependent on cotton for their livelihoods, you can understand why. But, since this issue emerged in 2002, there has been virtually no progress. Everyone knows what needs to be done: there is no excuse for delay, this cannot be brushed under the carpet,'' said Celine Charveriat, head of Oxfam International's Make Trade Fair campaign, in a statement late last year.

The Nairobi meeting also urged Africa to resist any measures imposed on it. ''Africa has a right to insist that an outcome of the Doha round of negotiations that does not take adequate account of its major interests and concerns will not be acceptable,'' Elizabeth Tankeu, the AU Commissioner for Trade and Industry, told the gathering.

Agriculture subsidies are not the only headache Africa is grappling with. At the WTO ministerial meeting in Hong Kong in 2005, members adopted a provision that seeks to reduce and eliminate tariffs, especially on products of export crucial to developing countries.

African civil society groups have warned that Africa and other developing countries rely on tariffs for industrial development, as well as for government revenue.

''We reiterate our call to African governments not to undertake further commitments to reduce their tariffs on products that are essential for food security, the protection of small farmers' livelihood and income, and for rural development and poverty eradication,'' said a memorandum presented to the Nairobi trade ministers meeting. The document was signed by about 50 organisations.

Tariff cuts have led to an influx of cheaper imports that have threatened local production. In Kenya, for example, the dairy sector has been a casualty for a long time. All, but one milk processing plants closed down, resulting into a surge in imported milk products in the 1990s and in 2001. This prompted the government to raise the tariff on imported dairy products in 2002 from 35 to 60 percent to protect local production.

Not all outcomes of last year's WTO ministerial meeting in Hong Kong are unfair to Africa. The Aid for Trade (AfT) initiative is being perceived as an achievement.

The initiative seeks to fund developing nations, particularly Least Developed Countries (Africa included) to address constraints that have been largely responsible for their poor performance in global trade.

AMP Section Name:Trade Justice
  • 181 Food and Agriculture

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