Dumping hurts world's poorest farmers, Oxfam says

Catholic New Times, March 8, 2005

The international trade in rice and other foods is rigged--and millions of poor farmers are being squeezed out of business by "rich countries" dumping massively subsidized food, the aid agency Oxfam said in a report, published in the Globe and Mail in April.

The situation for vulnerable farmers around the world is likely to worsen, Oxfam says, if the United States and Europe sell excess farm produce below cost in developing countries, after winning greater access to those markets in the current round of world trade talks.

The world's third largest rice exporter, the U.S. spends $1.3-billion in subsidies to support a rice crop that costs. $1.8-billion to grow. This allows the country's exporters to dump 4.7 metric tonnes of rice on world markets at 34 per cent below the cost of production--a move that hurts struggling farmers in countries such as Ghana, Haiti and Honduras.

"This is an example of rigged rules and double standards at their baldest," said Phil Bloomer, head of Oxfam's Make Trade Fair campaign.

"Rich countries are demanding that poor countries pull down their barriers to trade and, at the same time, they are continuing to subsidize massive overproduction and dumping. Their selfish motives couldn't be clearer."

According to Oxfam, two billion people earn their livelihood from rice production. Most of them are small farmers in poor countries. The NGO said if state support was reduced and import tariffs cut sharply, low-cost imports would force local producers out of business. It cited the case of Haiti, where the government cut tariffs on rice imports in 1995 to three per cent from 35 per cent (responding to pressure from the International Monetary Fund). This resulted in a 150-per-cent increase in imports. Today, three out of every four plates of rice eaten in Haiti come from the United States.

"It has devastated farmers in Haiti where rice-growing areas now have some of the highest levels of malnutrition and poverty," the 68-page report says.

Rieky Stuart, executive director of Oxfam Canada, said Canada does not dump its agricultural imports as the United States and the European Union do.

"But Canada's drive to force poor countries to lower tariffs quickly can be just as devastating. Poor countries have been forced to liberalize agricultural trade faster and deeper than any rich country in history. They are losing by this shock therapy and shouldn't have to endure it."

The World Trade Organization is trying to put together a new global trade treaty by the end of next year.