Rich country farms cost poor ones $24 billion in lost income

Rich country farm policies cost agricultural producers in the developing world about $24 billion in lost income each year, with the European Union the biggest culprit, researchers said.

The report from the International Food Policy Research Institute comes as members of the World Trade Organization are struggling to agree on a global framework for reducing domestic farm payments, export subsidies and agricultural tariffs. The issue is expected to take center stage at next month’s WTO meeting in Cancun, Mexico. Unless countries make progress in agriculture, there is little hope for other areas of world trade talks launched in November 2001 in the Qatari capital of Doha and targeted for conclusion by January 2005. Eliminating trade-distorting farm subsidies and tariffs in the EU, the United States and other industrialized countries would allow developing countries to triple net agricultural exports to about $60 billion annually, Eugenio Diaz-Bonilla, a senior research fellow at the institute, told reporters.

EU farm policies displace more than $20 billion in developing country farm exports, the study found. U.S. polices are responsible for about $11 billion in lost exports and Japanese policies about $5.3 billion. The lost exports reduce incomes for farmers and other agricultural-based businesses in developing countries by about $24 billion annually, the study said. The greatest regional impact is on Latin America and the Caribbean, which lose about $8.3 billion in income annually, Diaz-Bonilla said. Asia loses about $6.6 billion and countries in sub-Saharan Africa about $2 billion, he said. David Orden, another senior research fellow, said it was unlikely that world trade talks — officially known as the Doha Development Agenda — would completely reform agricultural policies. But substantial progress could be made, he said. Developing countries would also benefit from reducing their own import barriers and subsidies, in addition to any cuts that rich countries make, Orden said. US farmers are expected to receive about $19 billion in government subsidies this year. Leading U.S. farm groups oppose any cuts in those payments, unless developing countries significantly reduce their import barriers.