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Scrutiny
  
Oh, subsi-die-s
First world is killing the third
21/09/2006

The fluctuation of coffee or cereal prices might destroy the economy of any third world country, but unfair agriculture support systems and subsidy mechanisms in the first world are not only making the first world agriculture unfairly profitable, but are also destroying the subsistence economy in developing countries. UNDP reports that in the developing world, more than 67% of people below the poverty line are from rural areas, and are mostly small farmers dependent on agriculture.

Subsidies and support structures in the first world amounting to $350 billion a year come in the form of high import tariff and distorted pricing for boosting exports. Import tariffs at times rise to more than 100%, while even budget transfers have raised incomes making agriculture more profitable. The hypocrisy is more than apparent as similar attempts by developing countries is inevitably scoffed at. The beneficiaries of these large scale dole-outs are inevitably the large scale farmers and corporate agribusiness lobbies. Statistically, agricultural support as a value to protection was 56% for Japan, while it was 18% and 33% for US and EU respectively. In EU, more than 75% of Common Agriculture Program support goes to the biggest 10% of subsidy recipients, while in the US, of the 40% of farmers that got any kind of subsidy, the richest 5% got a whopping 50%, amounting to $470,000 each.

Compare that to the miniscule $1 billion that the developed world ‘lavishes’ on developing countries for ostensibly improving their agricultural structures. Researches suggest that annually, developing countries lose about $24 billion due to the protectionism in the first world. And for every penny that’s lost due to unfair agricultural practices, there is also a matching loss in purchasing power and investment in developing countries. For example, subsidised sugar from EU is reported to have reduced world prices by 33%, which resulted in direct foreign exchange and livelihood losses in many efficient sugar producers like Brazil, South Africa and Thailand, where more than 60 million people survive below $2 a day.This stupefying exhibition of double standards by western powers has been intriguing and dehumanising. Protectionism can’t be looked down in one form and supported in other.

By:- The IIPM Think Tank
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