Jun 10, 2008

New York Times Calls For An End To Agriculture Subsidies

A few years back this lead Editorial in today's New York Times would have been regarded as a major foreign policy triumph for New Zealand. It shows how much the world has changed to our way of thinking. The challenge now is to take full advantage

One might expect that food riots in Egypt and Haiti would convince the world’s wealthy nations of the need to do more to feed the world’s poorest. If not, maybe the threat of 100 million more people falling into poverty due to soaring food prices would spur them to help.
Yet at last week’s United Nations food summit, the world’s more-developed nations proved, once again, that domestic politics trumps both humanitarian concerns and sound strategic calculations.
Over the past year, the prices of grains and vegetable oils have nearly doubled. Rice has jumped by about half. The causes include soaring energy costs, drought in big agricultural producers, like Australia, and rising demand by a burgeoning middle class in China and India. But misguided mandates and subsidies in the United States and Europe to produce energy from crops are also playing an important role.
The International Monetary Fund estimated that biofuels — mainly American corn ethanol — accounted for almost half the growth in worldwide demand for major food crops last year. About a third of this country’s corn crop will go to ethanol this year. Yet at the summit meeting in Rome, the Bush administration insisted that ethanol is playing a very small role in rising food prices and resisted calls to limit the drive to convert food into fuel. The United States wasn’t alone.
Brazil, which has an enormous sugar-based ethanol industry, also rejected demands to curb biofuel production. Argentina objected to calls to end export taxes that it and other countries have erected to slow food exports. The United States and Europe also rejected suggestions that their farm subsidies should be blamed for depressing agricultural investment in poor countries.
Today, Africa has less large-scale commercial agriculture than it had 50 years ago. Productivity has slowed to a crawl in India, Indonesia and China.
Several countries have pledged more aid in response to the crisis, but not nearly enough. The Bush administration wants to increase food assistance to $5 billion over two years.
According to the United Nations Food and Agriculture Organization, there are 37 countries in critical need of food assistance. Many need not only food, but also seed and fertilizer to plant this season.
According to the U.N. secretary general, Ban Ki-moon, world food production must rise 50 percent by 2030. This will require investments exceeding $15 billion to $20 billion a year in the farm economies of poor countries, including research into robust, high-yielding crops suited to poor regions like sub-Saharan Africa.
After 9/11 the world’s richest nations saw the link between hunger, alienation and terrorism. They offered a trade deal to eliminate the agricultural subsidies and tariffs that were pushing farmers in developing countries out of the market and further into poverty. Seven years later the tariffs and subsidies are still there.
One of the most useful things industrialized countries could do would be to deliver on their promise and end the fat subsidies they provide their farmers no matter how high prices go. These subsidies depressed food prices for years and discouraged investment in agriculture across much of the developing world.
In a world of growing demand and far too much hunger, they have no justification at all.