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Mon, Mar 21, 2005 - Page 12 News List

Complete end to farm aid urged

ARTIFICIAL PRICES Developing nations called on rich countries to remove their US$230 billion in annual subsidies ahead of Hong Kong trade talks in December

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India, China, Brazil and other developing nations urged rich countries to end all farm subsidies in five years, stepping up pressure on the US, Europe and Japan before key global trade talks in December.

Developing nations "are concerned about the enormity of farm subsidies in rich countries, which create artificial prices," Indian Commerce and Industry Minister Kamal Nath told a news conference after a two-day meeting of Group of 20 trade representatives in New Delhi. "This has to be corrected." The talks sought to strengthen the hand of developing countries in negotiations for a global trade accord scheduled for completion by the end of 2006.

The 148-member World Trade Organization is seeking to reach agreement on formulas for cutting import tariffs at a meeting in Hong Kong in December.

Before they open their markets to foreign goods, services and investment, developing nations say industrialized countries must stop distorting market prices with subsidies for farmers.

The G-20, which contributed to the collapse of world trade talks in Mexico in 2003, called for an immediate freeze on export aid.

"The G-20 needs to ensure that developing countries negotiate in unison to bring about a pro-poor outcome in Hong Kong," Celine Charveriat, a spokeswoman for Oxfam International, said in New Delhi. "Calling for countries to eliminate all forms of export subsidies within five years is a very positive move."

Farm subsidies total more than US$230 billion a year in the Organization for Economic Cooperation and Development, almost 30 times the amount of agricultural aid to developing countries, according to the Food and Agricultural Organization, a UN agency.

Subsidies include between US$3 billion and US$4 billion a year for US cotton farmers.

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