Fairer deal needed for Third World farmers; Michael Smith attends a farmers' dialogue on tackling poverty.

At the end of July, Europe and America agreed to slash their agricultural subsidies, which have been blamed for driving Third World farmers out of business. No timetable was set, and aid agencies and campaigners thought the deal didn't go nearly far enough. But the decision, at the World Trade Organization (WTO), put the so-called Doha round of negotiations back on track.

The issue of farming subsidies was also a focus of the Caux Conference for Business and industry, which took place earlier that month.

Reducing tariffs and subsidies would benefit both the developing and developed world, maintained Robert Anderson, a Canadian counsellor to the WTO. But it would be a 'long and tortuous process', not least because these developing countries that are net agricultural importers also benefit from subsidies, 'at least in the short run'. There was a need for 'honest evaluation' of such issues as price fixing cartels, which act as 'unofficial reverse development assistance that transfers wealth from poor countries to rich countries'.

Switzerland's newly-appointed Secretary of State for Economic Affairs, Jean-Daniel Gerber, also called for urgent action to give developing countries better access to rich-world markets, as well as grant them debt relief. The world's development aid had totalled $68.5 billion last year, yet agricultural subsidies in the rich world came to $300 billion, and military spending stood at $1,000 billion, he said in a Caux lecture.

There has been a 'scandalous' two-thirds decline in investment in African agriculture in the last decade, according to Christie Peacock, Chief Executive of the UK charity Farm Africa. She described Africa as 'the most rural continent in the world', with 80 per cent of the population depending on farming (compared with only 3.3 per cent in Europe and America). Yet direct food aid to Eritrea, for instance, was 40 times the aid to agricultural development.

'The World Bank has given up on agriculture, yet farming is where people are,' said Peacock. She called for a 'significant increase in government spending on agriculture'. There was a need to give the rural poor access to land and water resources, technical and other support services and to local political processes.

She cited the example of Meru, Kenya, where 50,000 smallholder farmers had benefitted from a goat-breeding scheme sponsored by Farm Africa. They were now selling breeding goats to five East African countries and the knock-on effect to the local economy had been 'huge'. One beneficiary, a former casual labourer, now owned two hectares of land and had been able to send his daughters to school. His sons were starting a business in the local town. 'A virtuous spiral is developing,' commented Peacock.

There was only $2 billion of intra-regional trade in Africa, she continued, yet there was a $50 billion domestic demand for food crops, which is predicted to double in the next 15 years. She called on voters in the rich countries to press their politicians to increase aid to agricultural development.

'We're proud to give some hope from Zimbabwe,' said Dr Ian Robertson, who has taught microbiology for 27 years at the University of Zimbabwe in Harare. Seventy per cent of Zimbabwe's population live on less than $1 a day. Robertson's firm, Agri-Biotech, employs some of his graduates and draws on their research to produce virus clean sweet potato and cassava. Three thousand farmers are benefitting from these strains, with threefold rises in sweet potato yields and fourfold in cassava.

The CEO of the American Corn Growers Association (ACGA), Larry Mitchell, declared that American agricultural subsidies of $20 billion a year were 'critically wrong'. He quoted a report from the Agricultural Policy Analysis Center (APAC), at the University of Tennessee, which accuses the US of 'exporting poverty', because subsidies depress farm prices worldwide. The APAC report suggested that the way out lay in a 'careful and balanced application' of measures that would have the goal of 'improving the welfare of farmers worldwide'. (http://apacweb.ag.utk.edu/blue print.html)

'There is a large difference,' Mitchell noted, 'between a subsidy and support. The former is paid by taxpayers, and the latter by the users. If we raise the support programme, we can reduce or eliminate the subsidy programme.'

With reporting by Joanna Margueritte and Andrew Stallybrass www.cauxinitiativesforbusiness.org