Friday, April 16, 2004

kickAAS:: Kick All Agriculture Subsidies. The state of the particular brand of corporate welfare is amazing. This article says it all:
It is difficult to find anything in the European Union more perverse than its continuing subsidy of sugar. It fails every test miserably. It is economic madness since the EU is shelling out hundreds of millions of taxpayers' money - that could be used to reduce its growing budget deficit - to grow crops at a loss that could be better grown elsewhere. It is immoral because subsidies prevent poor countries from growing sugar that would create hundreds of thousands of jobs. It is also unhealthy because it is encouraging the subsidised output of a product that the World Health Organisation, courageously - in view of the vested interests attacking it - says we should be cutting back on.
If the figures - published in a new Oxfam report, Dumping on the World, this week - were applied to any other industry, they would be laughed out of court. Oxfam claims the EU is spending €3.30 to export sugar worth €1, an almost unbelievable support of more than 300% - and that is only part of the elaborate welfare package bestowed on the industry. These hugely subsidised exports are dumped on developing countries, snuffing out potential economic growth that could enable them to work their way out of poverty. All they want is a level playing field. Is that too much to ask for? Oxfam - quoting World Bank figures - also claims that sugar costs 25 cents per pound weight to produce in the EU compared with 8 cents in India, 5.5 cents in Malawi and 4 cents in Brazil. The world price for raw sugar is 6 cents a pound. It is bizarre that European governments reconciled, albeit reluctantly, to call centres being subcontracted elsewhere will not let go of sugar output which, left to market forces, would long ago have migrated to the third world. Sugar producers, with twisted logic, use Brazil's low cost of output as a reason for retaining subsidies on the grounds that it will not be really poor countries benefiting, only the medium poor.

The simplest solution would be to abolish all agriculture subsidies, even though it would, in the short term, hurt a minority of poor countries that might lose out to the likes of Brazil. Once exceptions are granted, then everything is up for grabs, and trade and talks would be dragged down by interminable bargaining. If complete abolition is deemed impracticable in the short term, then at the very least Europe should commit itself at once to the complete abolition of all export subsidies, direct and indirect. Apart from the huge relief it would bring to poor countries, it would also restore Europe's long-lost moral leadership.

I suppose those farmers think that if socialism was good for them, it would clearly be good for the world's poor. These subsidies are the perfect tool to crush competition and encourage a beggar mindset.
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