US Hits the Poor. (Trade)

By Gunnell, Barbara | New Statesman (1996), May 20, 2002 | Go to article overview

US Hits the Poor. (Trade)


Gunnell, Barbara, New Statesman (1996)


George Bush has just signed away $l9Obn to America's farmers, no doubt pleasing them but angering his Republican colleagues, who reportedly begged him to veto the farm bill right up to the signing ceremony. They were offended partly by the sheer cost of the bill -- up to $l9bn a year for the next ten years -- and partly at the idea of such heavy government support for a lame-duck sector.

It would be good to think they were also anxious about the highly detrimental impact the bill will have on the farmers of poor countries, or troubled at the hypocrisy of the richest nation in the world showing such blatant disregard for its own free-trade rhetoric, most recently declaimed in March at the UN summit in Monterrey, Mexico. Here, Bush pledged $5bn a year for three years to vanquish third-world poverty, with a reminder that future prosperity for all depended more on free trade than on aid.

The $15bn is now looking rather paltry, but he was right about trade. The use of agricultural subsidies by rich countries to protect farmers' prices quite literally keeps the developing world in poverty. Last year, at the global trade summit in Doha, Qatar, the rich nations recognised this and pledged to work towards reducing them. Currently running at around $350bn a year (or a billion a day), agricultural subsidies equal the entire GDP of sub-Saharan Africa, and seven times as much as the rich countries give in development aid. In Europe alone, the Common Agricultural Policy hands out $36.8bn to its farmers to help them compete with some of the poorest people in the world. Despite the Doha pledges, only optimists now expect the EU to reduce this level of subsidy.

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