LexisNexis(TM) Academic - Document
Copyright 2005 The Financial Times Limited
Financial Times (London, England)

April 11, 2005 Monday
London Edition 1

SECTION: THE AMERICAS & INTERNATIONAL ECONOMY; Pg. 12

LENGTH: 549 words

HEADLINE: Oxfam backs protection for farmers in poor countries

BYLINE: By ALAN BEATTIE

BODY:


Poor countries in the World Trade Organisation are attempting to retain tariff protection for farmers they say are vulnerable, conflicting with the search for new markets by farmers in rich nations.

A study published today by Oxfam, the international development campaigner, argues that poor nations should be allowed to protect their rice farmers from low-cost - and often subsidised - competition from abroad.

Oxfam calculates that, under proposals being discussed in the WTO, 13 poor countries with around half the world's production of rice - including Egypt, India and China - would be forced to cut tariffs protecting their rice producers. "Low-cost imports threaten to destroy the livelihoods of millions of farming families and the prospects for rural development," says Kate Raworth, one of the report's authors.

American rice, which many poor countries import after liberalising their trade, receives heavy domestic subsidies. Jackie Loewer, chairman of the US rice producers' group, himself farms some 1,600 acres of rice in Louisiana. He estimates that government subsidies average 20-30 per cent of his revenue, rising above 50 per cent when market conditions are poor.

But he argues: "It is a chicken and egg situation. We wouldn't need the subsidies if we had enough markets opened to us." The US already exports about half its rice, and is currently trying to get more access for exports to central America.

Mr Loewer's rice ends up in places such as Accra, capital of the west African state of Ghana. After liberalisation of the Ghanaian rice market, urged on the country by the International Monetary Fund and the World Bank, the markets in Accra are piled high with sacks of US rice, backed by an aggressive marketing campaign portraying it as a superior product. So successful has this been that many of the sacks - even those from Thailand, the US's biggest global competitor - are stamped with the Stars and Stripes.

In the WTO framework agreement last summer that got the Doha round of talks back on track, poor countries secured a vague pledge permitting them to retain more protection for so-called "special products" - based on criteria of "food security" (ensuring an adequate national supply of food), "livelihood security" and "rural development needs".

But the US government argues that this should only apply to a narrow range of farm products, essentially those produced by subsistence farmers, and that consumers pay the price for trade protection.

"Food security is often better served by opening markets to high-quality, low-cost produce than favouring domestic producers," says a US trade official.

The rice lobby is very well connected politically in the US, being large donors to political campaigns. In a 2003 open letter to Robert Zoellick, then US trade representative, a group of agricultural exporters including the US rice producers' association argued against protection for special products. "Since developing countries offer the most potential for demand and import growth in the future, these provisions would severely undermine potential market access gains from tariff reductions," it said.

Oxfam says that consumers' access to cheaper rice is important, but it is for poor countries' governments to decide on the right trade-off. www.oxfam.org www.ustr.gov

LOAD-DATE: April 10, 2005