Farm supports in richer nations artificially lower export prices, hurting growers in countries that can’t compete
TORONTO (Thomson Reuters Foundation) — Rich nations are spending $250 billion a year subsidizing their agricultural sectors to the detriment of poor farmers, a new study says.
The subsidies artificially lower prices for some crops and block market access for growers from poor countries, the report said.
Wealthy nations spend 20 times more on farm subsidies than the $12 billion they allocate annually to food aid and support for poor farmers, said John McArthur, a senior fellow with the Brookings Institution, the think-tank that led the new research.
Japan spends 59 times as much supporting its 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 study said.
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“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 said.
Subsidies from the 31 members of the Organization for Economic Co-operation and Development included direct payments to farmers, trade barriers to food from poor countries and mandates for biofuel, 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 and hindering access for unsubsidized growers.
This process discourages poor farmers from investing in their operations or increasing production because they cannot fairly compete with subsidized crops. This in turn hurts food security in poor countries.
However, 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 one percentage point every three years, but McArthur said the speed of hunger reduction needs to significantly accelerate if hunger is to eliminated entirely by 2030, which is in line with the United Nations’ Sustainable Development Goals.
Many African countries have made major progress in the last decade, he said.
