Oxfam Demands End to Export Subsidies

For Immediate Release

Contact: Zahra Akkerhuys on 00 44 1865 312256 or 07786 110054.

(December 10, 2002) -- OXFAM is calling on EU leaders meeting at the EU summit in Copenhagen (December 12 - 13) to scrap the Common Agriculture Policy's export subsidies regime which is having a devastating impact on farmers in the developing world.

In a new report about the EU dairy industry, published on the eve of the summit, Oxfam demonstrates how the EU dairy regime encourages the over-production of milk and dairy products. The surplus is dumped on poor countries, using costly export subsidies, which drives down world prices, creates unfair competition and destroys local markets.

The report illustrates the over-whelming effect the subsidies have on small dairy farmers in countries such as India, Jamaica, the Dominican Republic and Kenya. Farmers are being driven further into poverty meaning they can't afford to buy basic medicines for vital treatment or send their children to school.

And it is EU citizens who are supporting the dairy industry to the tune of 16 billion euros each year. This is the equivalent of more than $2 (two euros) per cow per day while half the world's people survive on less than this amount.

''European milk dumping is just one example of the rigged rules and double standards that prevent trade from working for the poor. We have had countless promises of reform but so far they have come to nothing.''

''In Copenhagen EU leaders must commit to reforming this damaging system. Action needs to be taken to scrap export subsidies,'' says Oxfam GB's director of campaigns Adrian Lovett.

The CAP is even failing on its own terms. Although it is meant to support farm incomes, small-scale farmers in some European countries are struggling to make ends meet and have benefited very little from subsidies. Within the dairy industry the direct winners are large-scale processing and trading companies who receive more than a billion euros each year from EU citizens in export subsidies. The recipients include such companies as Nestle and Arla Foods.

Earlier this year Oxfam highlighted how the European sugar regime ensures big profits for Europe's sugar processors and large farmers while undermining opportunities for people in the developing world to work their way out of poverty.

At the EU summit in Copenhagen (December 12 to 13) Oxfam is calling on EU leaders to start timetabling reforms that will:

• Eliminate the need for dairy and sugar export subsidies, which undermine the livelihoods of poor farmers in developing countries by cutting milk production quotas

• Restructure agricultural subsidies so money goes to small-scale farmers and is linked to improving the environment

• Make public how agricultural subsidies are distributed.

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