The pot calling the kettle black

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SummaryOECD countries' agriculture subsidies rose to $406 billion by 2011 but developed countries continue to force a cap on such subsidies on poor countries

A fight taking place in the WTO negotiations towards the Bali Ministerial shows how the rules on agriculture allow developed countries to continue huge subsidies whilst penalising developing countries’ farmers. Food security is one of the key issues now being negotiated at the WTO as part of its preparation for the Ministerial meeting in Bali in December. For developing countries, food security and the livelihood and incomes of small farmers are important priorities. Especially for the poor, food is the main item in the household budget. Agriculture also employs the most people in most developing countries. Ensuring farmers have enough income is key to development and social stability.

Increasing food self-reliance is a goal in many countries. Food security became a high priority after global food prices shot up to record highs in 2008, and there was a near-scramble for supplies of some food items including rice because of potential shortages. Also, reducing and eventually eliminating hunger worldwide is one of the key Millenium Development Goals adopted by governments at the United Nations. In the present negotiations on formulating Sustainable Development Goals in the UN in New York, food security, nutrition and agriculture are one of the key clusters of issues.

Against this background, there is a remarkable discussion now taking place at the World Trade Organisation, as part of preparations for its Ministerial Conference in Bali in December. Developing countries grouped under the G33 are asking that their governments be allowed to buy food from their farmers, stock the food and distribute it to poor households, without this being limited by the WTO’s rules on agricultural subsidies. However their proposal is facing resistance, mainly from some major developed countries, especially the United States, whose Ambassador told the WTO earlier this year that such a move would "create a massive new loophole for potentially unlimited trade-distorting subsidies".

This clash is outstanding example of the how the agriculture rules of the WTO favour the rich countries whist punishing the developing countries, including their poorest people.

It is well known that the greatest distortions in the trading system lie in agriculture. This is because the rich countries asked for and obtained a waiver in the 1950s from the liberalisation rules of the GATT, the predecessor of the WTO. They were allowed to give huge subsidies to their farm owners, some of who do not even carry out farm

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