Agricultural Policies: An Engine of Poverty
Date: Tue, 2 Sep 2003 20:59:34 -0700 (PDT)

Dear All,

"The average person in sub-Saharan Africa earns less than $1 a day. The average cow in Europe -- thanks to government subsidies -- earns about $2 a day. And therein lies a tale of the power of European farm interests, and the weakness of African economies." -- Kevin A. Hassett & Robert Shapiro, Washington Post, 6/22/03

Agricultural policies in our land of opportunity effectively forestall the possibility of a world of opportunity. Notwithstanding our country's rhetorical or philosophical commitment to free trade, U.S. agricultural subsidies and trade barriers present enormous obstacles to the future development of much of Africa, Asia, and Latin America, where about two-thirds of workers are employed in agriculture. Regrettably, we are not alone in these unfair practices. Domestic subsidies and trade barriers that harm developing countries exist in most other wealthy nations as well -- in Europe, Japan, and Canada. The upcoming World Trade Organization (WTO) meeting in Cancun, Mexico, presents a chance to begin to undo these injustices by providing the opportunities of free trade to people whose most basic needs depend on it.

Domestic subsidies, protective tariffs, and other trade barriers imposed by wealthy nations harm agricultural workers in developing countries in several ways. Subsidies enable farmers and agribusiness in developed countries to sell their products for less than their cost of production, often for even less than production costs in developing countries where these costs are often much lower. This reduces exports from developing countries, because consumers in other countries will buy the artificially less expensive products from wealthier countries. Subsidized products imported from developed countries also often displace locally-produced products in developing countries. The high tariffs that wealthy nations place on agricultural products from developing countries also reduce the ability of exports from poorer countries to compete in wealthy nations' markets. Further, the low prices at which subsidized farmers and agribusiness from the United States and elsewhere are able to sell their products depress global market prices, reducing the income of farmers in developing countries on the products they do manage to sell.

For vivid examples of the effects of these subsidies and related policies at work, see the NY Times series of editorials "Harvesting Poverty," available at (You can find all NY Times articles that I cite here through this site.) For a more detailed examination, as well as other information on how the rules of international trade harm poor countries, see Oxfam's 2002 report, Rigged Rules and Double Standards, available at

The stakes are enormous. An analysis in The Washington Post not long ago is worth quoting -- please excuse the length:

A recent study from the Institute of Economic Affairs in Britain estimates that EU agriculture policies have reduced African exports of milk products by more than 90 percent, livestock by nearly 70 percent, meat by almost 60 percent, non-grain crops by 50 percent and grains by more than 40 percent. If we assume from this that the [EU agricultural policies] reduces Africa's total potential agricultural exports by half, it suggests that without the [EU agricultural policies], the current $10.9 billion in annual food-related exports from sub-Saharan Africa (excluding South Africa) could grow to nearly $22 billion. Moreover, the International Food Policy Research Institute . . . has found that in sub-Saharan nations, every $1 in agricultural income produces an additional $1.42 increase in GDP. So, the end of [these EU agricultural policies] could raise sub-Saharan GDP by nearly $26.4 billion per year--enough to increase the annual income of every person in these countries by nearly 13 percent. (Washington Post, 6/22/03)
That's a 13 percent rise in income for sub-Saharan Africa alone -- and that's only by eliminating the destructive policies of the European Union. Think of what would happen if we did the same for policies of the United States, Japan, and Canada.

Africans and others are losing more than their dollars; they are losing their lives. Poverty kills all too easily. How many more children will die of malnourishment and related diseases, how many more people will be unable to afford medicine or even a trip to the nearest health clinic because of these policies? How many rural villages will remain without clean water or adequate sanitation, causing diseases to spread? How many agricultural workers will be unable to pay for their children's education?

The amounts of these agricultural subsidies dwarf the development assistance -- delivered by these same wealthy nations -- that is supposed to help end malnourishment, inadequate health care, and dirty water. The United States, Europe, and Japan provide their farmers about $320-$350 billion annually in subsidies, compared to the little more than about $50 billion per year they provide in development assistance. (NY Times, 7/20/03;

What purpose do these subsidies, tariffs and similar policies serve? "The system is sold to the American taxpayer as a way of preserving the iconic family farm, which does face tough times and deserves plenty of empathy, but it in fact helps corporate agribusiness interests the most." (NY Times, 7/20/03) The same is true in Europe: "European voters may believe that these policies defend quaint dairy farms dotting the French or Dutch countryside, but the truth is that most of the subsidies go directly to the bottom line of multinational agribusinesses." (Washington Post, 6/22/03) The 25,000 cotton farmers in the United States, who receive subsidies that exceed the entire gross national product of the West African nation of Burkina Faso and its 2 million cotton farmers, each has an average net worth of almost $1 million. (NY Times, 8/5/03) If family farmers are facing "tough times" and need help to get by, they should get that assistance, but we must find ways to provide it without hurting the rest of the world.

The WTO agreements in 1994 included an Agreement on Agriculture, intended to be a first step in creating a more level playing field in the international trade of agricultural products, which are treated differently from non-agricultural goods. The Agreement on Agriculture required future negotiations, which are now under way. In preparation for the WTO meeting that begins this September 10, American and European negotiators reached a "vague agreement," with the numbers -- the all-important details -- "yet to be filled in." (NY Times, Aug. 15, 2003) Some of what is already clear about the deal is discouraging, and a group of developing countries quickly responded with a counterproposal. But the mere fact that some agreement was reached demonstrates the pressure that the United States and Europe are under to make the rules fairer.

I hope that you might apply additional pressure by writing to key policymakers in the United States, Europe, Japan, and Canada, encouraging them to commit to an agreement at the upcoming WTO meeting that will quickly deconstruct the system of agricultural subsidies, tariffs, and other trade barriers that is among the most significant obstacles to eradicating poverty in developing countries. You can e-mail the United States Trade Representative Robert B. Zoellick at and President Bush at (or call the White House comment line at (202) 456-1111). Congressional contact information is available at The e-mail address of Pascal Lamy, the European Union's Trade Commissioner, is, and the e-mail address of Japan's Ministry of Economy, Trade and Industry is A contact form for Canada's Department of Foreign Affairs and International Trade is available at

The agricultural policies of wealthy nations that create additional burdens on the lives of the world's poorest people are an assault upon the foundational values of our nation and of human rights-based societies everywhere: the inherent dignity and equal worth of every person. We assert that all people are created equal, yet have thus far been willing to accept trade and subsidy policies that result in untold suffering and loss of life around the world. We cannot find the funds necessary to help provide people at home and abroad the basic necessities such as quality health care, education, and housing that human dignity requires, yet we do find billions of dollars for destructive domestic subsidies.

Forty years ago, Dr. Martin Luther King, Jr., urged America to "rise up and live out the true meaning of its creed," that we are all created equal. That was his dream. It's true that far too much of his dream of a new America remains unfulfilled. Poverty and joblessness are still part of our nation's landscape, and discrimination has not been vanquished. Yet we are closer today to realizing his dream. We live in a different America. And while we still have more to do to fine tune the beautiful symphony of brotherhood -- especially with the post-September 11 backlash against immigrants -- today Americans of all races and religions, nationalities and ethnicities, both men and women, whether or not disabled, whatever their sexual orientation, can sit together at the table of brotherhood and sisterhood, recognizing our common humanity.

Surely the belief that all people are created equal is not bound by the Atlantic and the Pacific, or by the Rio Grande and the 49th parallel. But what of the children of Burkina Faso and Vietnam and Brazil? Do we embrace them as our brothers and sisters too? When we set the table of humanity, do we leave places for the farmers of Mozambique and the Philippines and Guatemala?

The WTO meeting in Cancun later this month provides the opportunity for the United States and other wealthy nations to stop closing our eyes to the worldís poorest people, and instead extend our hearts to them. The meeting provides an opportunity to begin to live the foundational values of our nation in their true, global sense, rather than abandoning them at our borders. Cancun is an opportunity to recognize the equal dignity of every human being -- and begin to act accordingly. The Dream demands it.

As always, thank you.



"I have only dreams: to build a better world, a world of harmony and understanding, a world in which it is a joy to live. This is not asking for too much." -- Yitzhak Rabin

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