Rich nations spend $250 billion on farm subsidies, hurting poor growers

Rich nations are spending $250 billion annually subsidizing their agricultural sectors to the detriment of poor farmers as they artificially lower prices for some crops and block market access for growers from poor countries, a new study said. Wealthy nations spend 20 times more on farm subsidies than the $12 billion they allocate to food aid and support for poor farmers annually, John McArthur, a senior fellow with the Brookings Institution, the think-tank which led the new research, said on Friday.

Japan spends 59 times as much supporting its own farmers than on food aid and nutrition support, while countries in the European Union spend 42 times as much and the United States spends 16 times as much, the Brookings Institution study said. “There are a lot of ways countries can give artificial support for their own farmers, hurting farmers in Asian or African countries who could supply that (product) for better value,” McArthur told the Thomson Reuters Foundation.

Subsidies from the 31 members of the Organization for Economic Cooperation and Development (OECD), a group of wealthy countries, included direct payments to farmers, trade barriers to food from poor countries, and mandates for biofuels, he said. These supports for farmers in wealthy countries can hinder food production in developing states, by artificially allowing food to be sold on international markets below the cost of production, hindering access for unsubsidized growers.

This process, known as “dumping” in international trade, discourages poor farmers from investing in their operations or ramping up production as they cannot fairly compete with subsidized crops. This in turn hurts food security in poor countries. But it is not only rich-world subsidies that hurt poor farmers. Countries in Africa and Asia also need to invest more in infrastructure, fertilizer and crop insurance to help growers reach their potential to feed the 795 million worldwide who don’t have enough to eat.

Undernourishment in the developing world has been falling by roughly one percentage point every three years. But to eliminate hunger entirely by 2030, in line with UN Sustainable Development Goals, the speed of hunger reduction needs to significantly accelerate, McArthur said In Africa, the continent hit hardest by a lack of food and poor crop yields, some countries, such as Ethiopia, Malawi and Ivory Coast, have made major progress in the last decade, he said.

(Reporting By Chris Arsenault by Ros Russell please add; Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women’s rights, trafficking, corruption and climate change.

Copyright Reuters, 2015


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