Thursday, June 30, 2005

[Fair Trade] Farm subsidies keep Africa in poverty, says Brown

By Toby Helm and George Jones

Tony Blair and Gordon Brown turned up the moral pressure on European leaders to scrap the £33 billion-a-year Common Agricultural Policy yesterday by saying that over-generous subsidies paid to EU farmers were perpetuating mass poverty in Africa.
As Britain's prepares to take on the EU presidency tomorrow, and with the G8 summit at Gleneagles coming up next week, Mr Brown said developed countries could "no longer ignore" the "hypocrisy" of a regime that distorted world trade and held back Africa's poorest nations.

As part of a co-ordinated assault on the CAP, Mr Blair suggested for the first time during Prime Minister's Questions that it should be abandoned as part of a complete overhaul of the EU's finances.
Hilary Benn, the International Development Secretary, said the rich world had a "moral imperative" to achieve trade justice. He called for an end to EU and non-EU agricultural subsidies in which rich nations give their farmers £154 billion a year - 10 times the amount given in aid to Africa.
The concerted demands for action on the CAP set the stage for further disagreement between Mr Blair and Jacques Chirac, the French president, at Gleneagles, where moves to liberalise world trade to alleviate poverty will be high on the agenda.
French farmers receive 21 per cent of the CAP payments - £7 billion a year. As a result, Mr Chirac and the French political establishment defend the system fiercely. At a bad-tempered summit in Brussels this month Mr Chirac rejected Mr Blair's calls for reform and told other leaders that the system was essential to the EU's future.
In a speech to Unicef, the United Nations Children's Fund, Mr Brown said that some progress had been made to persuade rich nations to open up their markets and take measures to end export subsidies. But he said more needed to be done, particularly at European level. "We cannot any longer ignore what people in the poorest countries will see as our hypocrisy of developed country protectionism.
"We should be opening our markets and removing trade-distorting subsidies and, in particular, doing more to urgently tackle the waste of the Common Agricultural Policy by now setting a date for the end of export subsidies."
Under the CAP, EU farmers receive subsidies to produce and export surplus crops, driving down world commodity prices and thereby harming the economies of nations whose prosperity depends on a thriving agricultural sector.
Mr Brown said: "Think of the Mozambican sugar producer who cannot compete with European sugar beet farmers because the subsidies Europeans receive enable them to sell more expensive goods at a cheaper price."
Mr Blair surprised MPs by declaring publicly that it was his ambition "to get rid of" the Common Agricultural Policy".
Although he has previously talked of reforming the EU's farm subsidy system, it was the first time he had talked of scrapping it.
His remarks were confirmation that he intends to put radical reform of the CAP centre stage during Britain's six months at the EU helm.
It will put him on a collision course not only with France but with the Irish Republic, another leading beneficiary of CAP payments.
During noisy exchanges in the Commons, Mr Blair was accused by Michael Howard, the Conservative leader, of "shifting positions" on negotiations over the CAP and Britain's £3 billion a year rebate from the EU.
Mr Howard said the Prime Minister had assured MPs that the rebate would stay and would not be negotiated. Now he was saying that everything was open to debate as long as there was a fundamental review of the CAP.