On 9-14 September, the World Trade Organization brings together the trade ministers of 146 countries in Cancun, Mexico to try for a new deal on liberalising global trade. There has already been progress on various fronts, but on one critical issue they remain deadlocked: agriculture. As usual.
The average cow in Europe earns more per day in subsidies (around $2) than the total daily income of the average cattle-owner in west Africa. Americaís 25,000 cotton farmers received over $3 billion in subsidies last year, and can therefore undersell the 11 million people in West Africa who depend on cotton for their main source of income. Why does farming, rather than mining or manufacturing, say, make the governments of the rich countries go into ultra-protectionist mode and spend money like crazy'
Listen, for example, to the European Unionís agriculture commissioner, Fritz Fischler, defending the $2 per-day subsidy for cows in Brussels last Thursday. Criticisms of the $700-a-year cows ďmay be a nice PR stunt, but this argument is not only intellectually dishonest, it is factually irrelevant. Yes, in the developed world we are spending our money on many things. Not because we are all stupid, but because our standard of living is higher.Ē
Going into the Cancun summit, the rival proposals on agriculture from the rich and the poor countries are poles apart. The European Union and the United States of America, which together spend $370 billion a year on farm and food export subsidies while blocking food imports with tariffs as high as 350 per cent, talk of modest cuts in subsidies and tariffs, but refuse to discuss actual figures. The developing countries demand deep cuts in rich-country subsidies and tariffs, and do not want to make equal cuts in their own tariffs against agricultural exports from the developed world.
Fischler dismisses this position with his customary tact: ďIf I look at the recent extreme proposal sponsored by Brazil, China, India and others, I cannot help getting the impression that they are circling in a different orbit....If they...continue their space odyssey they will not get the stars...the moon, they will come up with empty hands.Ē One assumes that Fischler is ranting on behalf of a domestic audience that wants him to defend the interests of European farmers ó but given that farmers are a tiny proportion of any Western population, what makes them the tail that wags the dog'
Free and fair
Ending all agricultural subsidies in the US and EU would save the average Western family close to $1,000 a year in taxes. Ending import tariffs would let developing countries earn between $30 billion-$100 billion a year. When Western factories shut down and shift production to Mexico or Taiwan, Western governments generally accept their arguments about competitiveness and efficiency, so why not apply the same logic to the farming industry'
Because itís not just an industry. Farming is what has shaped the landscape that people know and love, and itís a big part of what shapes them culturally as well. No more than two or three percent of the population live on the land in any Western country these days, but itís only a century since more than half of them did. So people in the West feel differently when family farms go under than they do when a mill closes down or a telephone call centre move its operations to India.
What is wrong is not the wish to preserve the countryside and the rural way of life in the developed countries; it is the obsessive, doctrinaire insistence on doing it by a market model. The rich countries want to preserve the family farms because they make cultural, ecological, and even aesthetic sense. But they donít make economic sense in a global market, and all the subsidies in the world will not change that. So just change the system. Subsidise the farmer, not the food.
It couldnít be more complicated and expensive than the current system of subsidies. It certainly wouldnít be as harmful. And at one stroke it would remove the biggest obstacle to a world of freer and fairer trade.