Africa To WTO: If You Really Want To End Poverty, Stop Subsidizing Farmers In Rich Countries

Written by Dana Sanchez

Poor African countries want rich European and U.S. countries to stop subsidizing farmers.

Subsidies are distorting trade, depressing world prices and affecting poor producers in Africa who can’t compete, lobbyists said at the World Trade Organization conference in Nairobi, MediaMax reports.

Africa is lobbying for more access to duty free global markets for agricultural products, support at home to protect domestic exports from competition, and an end to agricultural subsidies for farmers in rich countries.

The continent’s trade ministers say success for them at the ongoing ministerial conference in Nairobi will mean achieving a trading system that levels the playing field and helps developing countries lift people out of poverty through trade, SABC reported.

There’s nothing new about the subsidies issue. It came up in 2003, 2005, and 2013 WTO conferences.

African trade ministers hope to break a 14-year deadlock on talks between them and developed countries, according to SABC.

Benin, Burkina Faso, Chad and Mali — the “Cotton Four” — first asked the World Trade Organization in Cancun, Mexico, in 2003 to pressure developed countries to eliminate subsidies and compensate them for economic losses caused by the subsidies, MediaMax reported.

Farmers argued that in some years total subsidies in rich countries amount to almost as much as the value of world trade in cotton.

The four countries said they weren’t asking for special treatment, but for a solution based on a fair multilateral trading system. The proposal to phase out subsidies got support from Canada, Australia, Argentina, Cameroon, Guinea, South Africa, Bangladesh, Senegal and India.

The U.S. however argued that imbalances in cotton are caused by factors other than subsidies alone such as country-specific industrial policies that support production for synthetic fibers, high tariffs on finished products and good harvests caused by favorable weather. They suggested that the distortions should be addressed through the production chain.

The E.U. said its production and exports were too small to have an impact on world cotton prices, and that it was changing its program for cotton producers.

No decision was made.

Cotton prices have increased significantly since then, reducing pressure in the E.U. and U.S. to pay subsidies. U.S. have declined from historical highs and are projected to be lower as a result of a new U.S. Farm Bill.

Higher prices for other crops such as corn and wheat, together with declining yields and rising production costs of cotton have also provided incentives to U.S. farmers to move away from cotton production.

At the global level, patterns of trade have shifted and new players have emerged, MediaMax reported. India went from being a net importer to the largest exporter of cotton, bypassing China in 2014.

South Africa has also joined in a call to prioritize issues affecting least developed countries.