[PEN-L:30644] subsidies backlash

["Ian Murray" <seamus2001@xxxxxxxxx>]

Brazil fights US and EU farm subsidies

Charlotte Denny
Saturday September 28, 2002
The Guardian

Brazil launched a broadside against Europe's and America's lavish payments
to their farmers yesterday, filing a double complaint at the World Trade
Organisation over cotton subsidies in the US and sugar subsidies in the EU.

The challenge by one of the leading members of the Cairns groups of
agricultural free traders strikes at the heart of the complicated system of
quotas and payments that protect western farmers.

Brazil blames America's $3.9bn (£2.5bn) cotton subsidies for ruining its own
far more efficient industry. The US is the world's most expensive producer
of cotton, with costs per lb twice the world average. Brazil says the EU's
sugar regime is also damaging to its farmers.

Aid agencies yesterday accused the US of dumping its surplus cotton on world
markets and contributing to a catastrophic price fall. World prices have
fallen by half since the mid-1990s and, adjusted for inflation, they are at
their lowest level since the great depression.

In a report released to coincide with the filing of the Brazilian case,
Oxfam said the subsidy regime, which costs three times more than America's
aid budget for all of Africa's 500m people, was contributing to mass poverty
in cotton producing nations such as Mali and Chad.

"The US is the world's strongest proponent of free trade, but when poor
cotton farmers in Mali try to trade on the world market, they must compete
against massively subsidised American cotton," said Kevin Watkins, the
report's author. "This makes a mockery of the idea of a level playing field.
The rules are rigged against the poor."

The WTO is likely to take at last a year to decide if the cotton and sugar
regimes break its rules