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May 16, 2002

WORLD: Commonwealth criticises US farm subsidies

Zealander Don McKinnon, secretary general of the Commonwealth, yesterday [Wednesday] spoke out against the new US farm bill, which was signed into law by President George Bush on Monday. McKinnon took issue with the sharp increase in the levels of US farm subsidies as incorporated in the bill. He said that the allowances are an example of rich countries bending the rules for their own benefit, and that they made a mockery of US free trade pledges, locking developing nations out of lucrative markets.

Zealander Don McKinnon, secretary general of the Commonwealth, yesterday [Wednesday] spoke out against the new US farm bill, which was signed into law by President George Bush on Monday.

McKinnon took issue with the sharp increase in the levels of US farm subsidies as incorporated in the bill. He said that the allowances are an example of rich countries bending the rules for their own benefit, and that they made a mockery of US free trade pledges, locking developing nations out of lucrative markets.

In a statement, McKinnon said: “The recently announced US Farm Bill makes a farce of the commitments for trade liberalisation reached in Doha [in Qatar last November] and undermines the prospects of developing countries trading their way out of poverty.

“How can poor countries believe in the benefits of globalisation when they see the rich countries bending the rules in their own favour?”

That the US could preach trade liberalisation while practising protectionism “is not only pure hypocrisy, it smacks of indifference to the poorest people on the planet,” he added.

“As the only economic and military superpower today, the US should provide positive leadership on these issues.”

The new law will see a total of US$170bn distributed to US farmers over the next ten years. It represents an increase in subsidies of 67%.

The Commonwealth consists of 54 nations, largely former British colonies. Britain, Canada, Australia and New Zealand stand aside 50 developing nations situated in Africa, Asia and the Pacific. Complaints about the extent of the US subsidies have come from Canada, Australia, Brazil and the EU, although no nation has said that it will take its complaint as far as the World Trade Organisation (WTO).

In Australia, the National Farmers’ Federation president Ian Donges singled out, grain, cotton rice and dairy farmers as those who would be most affected by the US subsidies.

US officials have meanwhile argued that EU agricultural subsidies are far larger than those introduced on Monday.

In New Zealand, Craig Norgate, CEO of dairy giant Fonterra, calculated that increased subsidies in both the US and Europe will cost New Zealand farmers about NZ$1.3bn.
 
In a speech at the Dexcel Ruakura Dairy Farmers Conference, in the dairy heartland of Hamilton, Norgate told about 1000 Waikato farmers that commodity prices were now “below what economic fundamentals appear to justify” due to subsidies in the US and EU.

“We are also very conscious of the impact that will have on the wider New Zealand economy,” he added.

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