Farm subsidy cuts seem to be on the agenda of most governments these days, but a global environmental watchdog group and a leading Canadian environmentalist say massive subsidies worldwide continue to support unsustainable farm practices.
Recent retreats by governments from commodity-specific subsidies have helped but have not gone far enough, former United Nations official and Canadian bureaucrat Maurice Strong said in introducing a report on subsidies last week.
“The recent movements toward more open market-oriented eco-nomies, free trade and budgetary austerity have resulted in some modifications and reductions in these subsidies,” he wrote.
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“But they continue to exact a heavy cost from people as taxpayers and consumers while distorting markets and undermining economic efficiency.”
The report, entitled Subsidizing Unsustainable Development was commissioned by the Earth Council, set up after the 1992 Rio Earth Summit to monitor progress on the commitments made at the Brazil conference. Strong is chair of the Earth Council.
The report stated that as recently as 1995, governments and consumers around the world subsidized agriculture to the tune of $335 billion.
“In earthier terms, agricultural support policies were the equivalent of transferring $16,000 to each full-time farmer, or an additional $1,500 on the annual food bill for a family of four,” it said.
The Earth Council report used definitions and calculations done by the Paris-based Organization for Economic Co-operation and Development to argue the point. The OECD uses a broad definition of subsidy, including direct and indirect payments to farmers or marketing arrangements which keep consumer prices “above the market level.”
It considers cost-based price setting by marketing boards a form of consumer subsidy to farmers.
Called hidden subsidies
A cutline in the report under a photo of a grain spout indicated: “Export sales of grain through a government agency are just one of the many hidden subsidies enjoyed by agriculture in industrialized countries.”
Using that broad definition, the report cited OECD numbers to conclude that the level of farm and food subsidies actually increased in the decade between the mid-1980s and mid-1990s.
Policy changes since then, including subsidy limits set in the world trade deal, the new U.S. farm bill and subsidy cuts in most other developed countries, including Canada and the European Union, are not captured in the OECD data.
But the Earth Council report says that whatever policy changes are in the works, subsidies which continue to prop up unsustainable farm practices and to increase production remain a multi-billion dollar problem in the world.
Gains in food production in recent years have been impressive, it says.
“Even more impressive, and unacceptable, has been the cost: of the degradation of soil, the deliberate impoverishment of some farmers and just as deliberate enrichment of others, the pesticide poisoning of water, air and soil,” said the report’s authors AndrŽ de Moor and Peter Calamai.
“It is a price the earth cannot sustain and subsidies are a big part of the problem.”
As the beginning of a solution, it suggests the type of reform many governments have started to embrace – reducing subsidies and converting them from production-related to income-supporting.
