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The world’s rich nations miss a golden opportunity to back fair trade
Level 1 |
Elementary
2
Both the European Union and the
United States give subsidies to their
f a r m e r s. This means that they give
money to their farmers, which makes it
possible for the farmers to produce food
at a cheaper price. It also means that
they sometimes have too much food.
When this happens, they often give this
food to poorer countries in Africa and
A s i a . This is called "food aid". But there
is a problem with this food aid. W h e n
cheap food from the EU and the US is
sold in poor countries, the price of this
food is much cheaper than the price of
food grown by local farmers. The food
aid doesn’t help the farmers at all
because they cannot sell the food they
produce at a fair price. They have to sell
their products at a lower price and this
means that they remain very poor.
In a speech in October 2001, the British
Prime Minister, Tony Blair, said that this
situation should change. He said that
the food situation in Africa was terrible
and that the whole world had to work
hard to help A f r i c a .
So what was Britain's prime minister
doing at the G8 summit meeting in
France last month? A few weeks ago
President Jacques Chirac did something
very surprising. France was alwa y s
against changing the European farm
subsidy system, but President Chira c
told the US government that if the
Americans stopped subsidising their
food exports to A f r i c a , Europe would do
the same.
This was an important offer. The We s t ’s
a g r i c u l t u ral subsidies are a disaster for
the developing world, and particularly
for A f r i c a . 70% of working people in
Africa work on farms, and most of the
farmers there are very poor. One reason
for this is that subsidised food from
Europe and the US is much cheaper
than locally grown food.
So did Mr Blair welcome President
C h i ra c ’s offer? No, he didn’t . The reason
i s, of course, w e l l - k n o w n . George Bush
receives a lot of support from the US
a g r i c u l t u ral industry, and he was not
willing to remove subsidies to farmers.
S o, thanks to Mr Blair and his master
President Bush, Africa will continue to
s u f f e r. The basic problem is that the rich
nations make world trade rules. Th e
current world trade agreement says that
the EU and the US are not allowed to
subsidise food exports. But both the EU
and the US use tricks to avoid this rule.
The US gives exporters cheap insura n c e,
for example. This is worth $7.7 billion to
US grain exporters. This money means
that US exporters can sell wheat and
maize at a price 10% to 16% cheaper
than the world price. They sell cotton at
40% below the world price.
Many countries give money to poor
countries and the World Fo o d
P r o g ramme can use this money to buy
supplies in local markets and this helps
local farmers. But the US sends
subsidised food instead of money,
saying that this programme will
"develop markets for US products".
The result is that the countries which
receive this aid are not the poorest
countries that need the aid most but the
ones that could be good markets for
American farm products. This is why, f o r
e x a m p l e, the Philippines receives more
US food aid than poor countries like
M o z a m b i q u e, M a l a w i , Zambia and
Z i m b a b w e.
The US also sends food aid when it is
least necessary. When the world price of
wheat falls, the amount of food "aid"
r i s e s. The programme that is meant to
help the poor is in fact making them
p o o r e r.
The Guardian Weekly
2 0 - 3 - 0 3 , page 1 3
The world's rich nations miss a golden
o p p o rtunity to back fair trade