CGD in the News

Letters to The Editor: West's Farm Subsidies Cut Off Market Access for Poorer Nations' Goods (Financial Times)

January 14, 2010

Sir, Two centuries after Napoleon encouraged French farmers to grow sugar beets to get around a British trade embargo, sugar remains one of the most protected products in Europe. Anand Menon ("The bitter truth about European sugar", February 25) rightly points out the absurdity of giving development aid while keeping countries from helping themselves by selling goods they can produce far more efficiently than European farmers.

Similar absurdities afflict US policies. Thanks to quotas that grew progressively tighter until the mid-1990s, the import share in the US sugar market is under 20 per cent, down from half in the 1970s. According to estimates from the Organisation for Economic Co-operation and Development, US sugar producers receive proportionally more support from their government than any other crop, and sugar subsidies are second only to beef in the level of generosity provided to farmers in the European Union.

The absurdities go beyond sugar. Like the European Union, the US government is appealing against a World Trade Organisation ruling against its farm subsidies, in this case for cotton. Benin and Mali are two of the four west African countries that put cotton subsidies on the Doha round agenda and would benefit most from their reduction. These also happen to be two of the 16 countries chosen by the US government to be rewarded for good policies under the Millennium Challenge Account - rewarded with aid but not with market access. Absurd indeed.