A defining moment of Tony Blair’s premiership was his speech at the Labour Party conference in 2001. It seemed to mark his transition from the insecure, focus-group junkie of Labour’s first term to a visionary statesman, determined to change the world.
”The state of Africa,” he said, ”is a scar on the conscience of the world. If the world … focused on it, we could heal it. And if we don’t, it will become deeper and angrier.” So I would respectfully ask him to explain what the hell he thinks he is doing in France.
A few weeks ago President Jacques Chirac, who had formerly prevented any real change to Europe’s farm subsidy regime, suddenly gave ground. He wanted to show that the G8 summit in Evian would offer more than the usual spectacle of the rich deciding how they would make themselves richer. He proposed that Europe would stop subsidising its food exports to Africa if the United States did the same, ending the perpetual agricultural arms race between the European Union and the US, with each seeking to out-subsidise the other.
Europe’s farm subsidies are disastrous for the developing world, and particularly Africa. Farming accounts for 70% of African employment, and most farmers are desperately poor — in part because they are unfairly undercut by subsidised US and EU exports dumped on their markets. Chirac’s proposals could have begun the process of dismantling a system that harms our pockets, our environment and the world’s most vulnerable.
Blair could have welcomed the lost and heavily subsidised sheep into the free-market fold. Instead he single-handedly destroyed the initiative.
The reason is familiar. President George W Bush, who receives political support from US agro-industrialists, grain exporters and pesticide manufacturers, was not prepared to make concessions. Had the EU, and in particular the member claiming to be a transatlantic bridge, supported France, the pressure on Bush might have become irresistible. Once Blair made it clear he would not back Chirac, the initiative was dead. So, thanks to Blair’s habit of doing whatever Bush tells him to, Africa is well and truly stuffed. Every trade distortion he promised to address remains. Food crises in Africa are directly exacerbated by its farmers’ plight.
The problem is that the rich nations set global trade rules. The current world trade agreement was supposed to stop the EU and the US subsidising exports to developing nations. But, Oxfam has shown, it contains so many loopholes that it permits them simply to call export subsidies by another name.
The EU has, in several farm sectors, stopped paying farmers according to how much they produce (classified by the World Trade Organisation as a ”trade-distorting” subsidy), instead giving them direct grants based on the amount of land they own and how much they produced in the past. The effect on crop prices is almost identical, but the new subsidies are classed as ”non-distorting”.
The US applies the same formula, adding some tricks of its own. One is called ”export credit”: the state cuts the cost of exports by providing cheap insurance for exporters. These credits, against which Chirac hoped to trade the European subsidies, are worth $7,7-billion (about R65-billion) to US grain sellers. With other ruses, they ensure US exporters can undercut the world wheat and maize prices by up to 16%, and the cotton price by 40%.
The ugliest of hidden US export subsidies is the use of aid to penetrate poorer countries’ markets. While other donors provide money, which the World Food Programme uses to buy local supplies, helping indigenous farmers while feeding the starving, the US insists on sending its own produce. This programme, the government states with breathtaking frankness, is ”designed to develop and expand commercial outlets for US commodities”.
The major recipients are not the most needy, but those which can, to quote the US Agriculture Department, ”demonstrate the potential to become commercial markets”. Thus the Philippines receives more US food aid than Mozambique, Malawi, Zambia and Zimbabwe combined, all of which (unlike the Philippines) are suffering serious food shortages.
US policy also ensures food aid is delivered when it is least needed. An Oxfam graph plots the amount of wheat the US gives to developing nations against world prices. When the price falls (when a global surplus means poor nations can buy cheaply) the ”aid” volume rises. This is a clear demonstration of agricultural dumping. A programme intended to help the poor undermines them.
Faced with a choice between saving Africa and saving Bush from mild diplomatic embarrassment, Blair has done his master’s bidding. The scar on the conscience of the world has become deeper and angrier. — Â