| Series Title | The Economist |
|---|---|
| Series Details | No.8371, 17 April 2004 |
| Publication Date | 17/04/2004 |
| Content Type | Journal | Series | Blog, News |
|
Date: 17/04/04 A report counts the cost of Europe's sugar subsidies on poor countries AS THE Doha round of trade negotiations slowly revives at the World Trade Organisation (WTO) in Geneva, agricultural subsidies and tariffs have been taking centre stage. A new report from Oxfam, a campaigning group for poor countries, highlights the absurdities of agricultural subsidies, by focusing on those for sugar, a product that developing countries are especially good at producing. In particular, the report explains exactly how the European Union's common agricultural policy (CAP) enriches a few European farmers and sugar refiners at the expense of the world's poorest. Oddly, the EU is the world's second-biggest sugar exporter. Though it does not have the right climate for growing cane sugar, since Napoleon's time Europeans have grown sugar beet instead. They do not, however, do this efficiently: the cost of producing a pound of sugar in the EU is more than six-times higher than in Brazil, says Oxfam. It argues that the EU subsidy is much bigger than the €1.3 billion ($1.5 billion) it owns up to publicly. Oxfam says there are €833m of “hidden subsidies”, too. Subsidising sugar producers is not just economically stupid, it is morally indefensible, too. For Europe's subsidies are not merely a quaint way to keep a few farmers in business. They cause so much sugar to be produced that the stuff is exported to poor countries, hurting farmers who might otherwise earn a living by growing it themselves - and perhaps even exporting it to Europe. At most, only 1.5m tonnes of sugar a year is bought in Europe from preferred trading relationships with African, Caribbean and Pacific countries. Worse, the sugar provisions of the CAP set poor countries against each other. European subsidies mean that its excess sugar ends up in places such as Algeria, Ghana, Congo and Indonesia, displacing sugar produced in countries such as South Africa and India. Brazil and Thailand are the hardest hit, Oxfam reckons. On its analysis, Brazil loses around $500m a year, and Thailand about $151m, even though these two countries are the most efficient sugar producers in the world. Even less efficient, and poorer, African countries lose out. Mozambique will lose $38m in 2004 - as much as it spends on agriculture and rural development. The costs to Ethiopia equal the sums it spends on HIV/AIDS programmes. The biggest winners, says Oxfam, are large European sugar refiners. France's Beghin Say, it claims, benefits by €236m a year, Germany's Sudzucker by €201m, and Britain's Tate & Lyle by €158m. Further progress at the WTO may depend in part on whether such firms will accept the loss of such subsidies. That fact should leave a very sour taste in the mouth. Feature looks at an Oxfam report on the EU's sugar regime. |
|
| Source Link | http://www.economist.com |
| Related Links |
|
| Subject Categories | Business and Industry |
