Volume 17 Number 5
Fairer Deal Needed for Third World Farmers
01 October 2004
Michael Smith reports 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 socalled 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 those 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 newlyappointed Secretary of State for Economic Affairs, Jean-Daniel Gerber, also called for urgent action to give developing countries better access to richworld 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 knockon 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’.
‘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
HOW MY FARM COPED WITH LOSS OF SUBSIDIES
MY WIFE and I have a family farm in the South Island of New Zealand, 100km from Mount Cook. We own 865 hectares. In the summer we have nearly 10,000 sheep, 100 beef cattle and 100 hectares of barley and lucerne crops.
We farm with two and half permanent employees—I’m the half—but use the services of many agricultural specialists—people who dip, spray, shear and pregnancytest sheep, and other contractors who spray seed and fertilize our paddocks, by truck and plane.
When I was 30 I had an increasing conviction to return to New Zealand to take responsibility for the farm that my father had left me. I had spent over 12 years abroad in voluntary work.
What were the challenges? My back was not 100 per cent; I had never received agricultural university training; farm product prices were depressed and, shortly after my return, we were snow-bound for three weeks, with one metre of snow and with all our animals living outside to feed. Four days after the snow, all the stock were reached by bulldozer or helicopter with feed. Regular exercise greatly improved my back.
Amazingly product prices went through the roof two years after we returned. This covered many of my mistakes and helped me to set up on a good financial footing.
My father, still living on the farm, was completely blind. After four previous operations for glaucoma, he reluctantly accepted one more for a cataract removal. To his astonishment, he regained 90 per cent of his sight—in his words a miracle. He could see his wife and children for the first time in 10 years and threw away his white stick.
I was on the National Council of the New Zealand Farmers Federation when the Labour government decided to drastically change the economy. A 10 per cent goods and service tax was introduced. The New Zealand dollar was floated, the reduction of tariffs was started, and, overnight, all farm subsidies terminated. We were receiving 20 per cent of our income from the New Zealand taxpayer. Our farmers marched in the streets, but as one of their leaders I knew in my heart that New Zealand had no alternative. We exported 90 per cent of our agricultural production and our trading partners had threatened us: remove subsidies or face tariffs.
The next years were difficult. Some farmers, big and small, lost their farms. Some committed suicide. I worked so hard my hips wore out. We survived by selling a city property we had been led to purchase when we were receiving subsidies. But the fact was we were overproducing a product that was hard to sell.
During the past 20 years there has been an enormous turn around. New Zealand’s sheep population has fallen from 70 to 40 million. Farmers have become very innovative and, where possible, successfully diversified into alternatives, such as producing trees, venison or dairying. Sheep farmers and our meat processing industry have substantially improved efficiency, and quality. We now cannot meet demand, and product prices are the best they have been.
During this time I could purchase farm advice from specialists, but by far the most secure, satisfying and stimulating daily advice came from my early morning times of silent reflection. If God could steer us through such changes, I am convinced that he can supply the answer to the problems and challenges of world agriculture, if we choose to listen to him.
For instance, for 20 years we baled our wool in jute packs instead of synthetic packs, to give trade to the jute growers of Bangladesh. To keep things transparent all our farm sales go through the company books.
Historically there has been division between farmers and trade union leaders in our meat processing industry. My wife, Helen, and I have met these leaders, had them to stay in our home and arranged meetings with local farmers.
Alcoholism is a big problem among our sheep shearers. Although contravening custom, we ran an alcohol-free wool shed. But with Helen giving excellent meals, the shearers were always keen to return.
In a global world, where the need for change and innovation is always constant, for New Zealand agriculture there has definitely been good life after the removal of subsidies.
By Garfield Hayes, New Zealand
Unless stated otherwise, all content on this site falls under the terms of the Creative Commons Licence 3.0