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The World Bank recently brought out a study, Agricultural Trade Reform and the Doha Agenda (big pdf). The WB can hardly be suspected of sympathy for agricultural support systems. In fact, this study was brought out to argue for free trade in agricultural goods and other goods and services, in time for the ministerial talks in Hong Kong.

Yet the report says this (p 17):

Poverty could be reduced under Doha.
Under the full merchandise trade liberalization
scenario, extreme poverty--those earning no more than $1 a day--would drop by 32 million in developing countries in 2015 relative to the baseline level of 622 million, a reduction of 5 percent. The majority of the poor by 2015 are projected to be in Sub-Saharan Africa, where the reduction would be 6 percent.

Note: the full merchandise trade liberalization scenario. This means total dismantling of all agricultural tariffs, aids, export subsidies plus total free trade in other merchandise and some services. It would, according to the WB, only reduce Sub-Saharan African poverty by a small percentage.

(p 19) If only agriculture was reformed (Doha scenario 1), there would be much less poverty
alleviation globally and none at all in Sub-Saharan Africa. This shows the importance for poverty of including manufactured products in the Doha negotiations.

Total free trade in agricultural goods will not alleviate poverty in Sub-Saharan Africa. This is from the World Bank, in a report the main intent of which is to support the idea of free trade.

I'm not in favour of dumping agricultural surplusses on the world market. I'm all in favour of real, sustainable development for Africa. But the notion that all we have to do is dismantle rich countries' agricultural support systems (I'm assuming you included that of the US too, when you said "dismantle the CAP"), for Africa to produce all the food we need, is so over-simplified it's laughable. It takes no account of climatic differences (can Africa produce the same food we now produce?), or, as Migeru points out, of the externalities involved in shifting the huge tonnage of foodstuffs needed by Europe and North America around the world.

Above all, it doesn't take into account the fact that Africa is unfortunately not geared up at all to take advantage of agricultural free trade. It is countries like Brazil, Argentina, Thailand, India, and other Cairns Group countries that will.

by afew (afew(a in a circle)eurotrib_dot_com) on Wed Dec 7th, 2005 at 02:39:51 PM EST
[ Parent ]
Try telling those thirty-two million people it's ok if they stay in poverty because they're only a "small percentage".

The actual number (and percentage) is even greater because it is relative to the 2005 population, not the 2015.  If you want "small", try the percentage of the European (and American, and Japanese) that actually works in agriculture and compare it to the corresponding percentage in Africa.

The "Doha scenario 1" you cite refers to a one-third cut in subsidies - see the table at the bottom of page 14.  None of the eight Doha scenarios envisage the complete elimination of subsidies; that is an additional one outlined by the research team.

Did you miss the table on page 12 of the report?  It showed that 63 percent of gains to developing countries from trade liberalization are from agriculture.  Right below that, you can't miss it, it says flatly, "Agriculture is where cuts are needed most".

There seems to be an attitude here that CAP reform is some kind of right-wing plot by so-called "Anglo-Saxon" countries.  This is nonsense.  The US and Canada have resisted cutting subsidies every bit as much as the EU and Japan have.

On this issue, the EU is on the same side as the Bush administration - the wrong one.  Virtually all NGOs working in the Third World have called for subsidy reform - see Oxfam, for example.  The Trade Justice Movement calls for the EU to abolish export subsidies.  So have African governments - see this article.  The Guardian, the UK's only liberal broadsheet, maintains a blog on the subject.

As to the myth that subsidized exports from the EU benefit food-importing countries, see Devinder Sharma's rebuttal here.

by tyronen on Thu Dec 8th, 2005 at 02:12:46 PM EST
[ Parent ]
I'm sorry if I appeared insensitive in speaking of a "small percentage". My point was simply to show that the gains from sweeping free trade reform were far slighter -- for those the most in need -- than some rhetoric on the subject implies. Your own comment at the top of the thread, to which I was replying, was extremely sweeping and simplistic, and most certainly implied that the total dismantling of the CAP would solve a great many of Africa's problems. May I ask you if you really believe that liberalization is the way to bring about progress for the poor in Africa and other continents? You really think free trade is the answer?

On the World Bank report: I don't want to be tedious, but there are a couple of things I'd like to rectify or nuance in what you say.

  • The "32 million" you quote are in all developing countries, not just Sub-Saharan Africa. Quote: "The majority of the poor by 2015 are projected to be in Sub-Saharan Africa, where the reduction [in poverty] would be 6 percent".

  • The "Doha scenario 1" implies elimination of agricultural export subsidies plus (for the CAP) a reduction of 18% in domestic farm and industry aid (already programmed) plus "the applied global average tariff on agricultural products is cut by roughly one-third, with larger cuts in developing economies, smaller in developing economies, and zero in least developed countries". In other words, one-third is an average, but the EU would be required to lower its tariffs by considerably more.

  • The table on p12 speaks of all developing countries, not just the poorest. Your comment above spoke of Africa. There is a middling rank of emerging agricultural exporting countries that stands to gain from liberalization, as I pointed out above.

  • "Agriculture is where cuts are needed most" same comment. What was most important was where the report dealt with the poorest, not with a lumped-in "developing countries" category.

My main point, anyway, was to say that even the World Bank was not very affirmative about alleviating African poverty even in the most favourable to free trade of its scenarios.

I then have a job understanding what the rest of your remarks have to do with anything I said. If the remark

There seems to be an attitude here that CAP reform is some kind of right-wing plot by so-called "Anglo-Saxon" countries.

is meant to apply to me, I'm at a loss. People here have repeatedly said (and I'm among them) that we want to see CAP reform. I want to see phasing out of export subsidies and of subsidies to the agri-food industry, and capping of direct farm subsidies with redistribution in favour of small farms. I'm pretty sure most people who comment here would agree.

As for "there seems to be an attitude", permit me to say that, if there seems to be an attitude anywhere, it's in the hectoring tone of your comments. As for "Anglo-Saxon", it's a term I avoid because it's inexact, but trying to make out it's as pejorative as "Frog" seems to me to be stretching it more than a bit.

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Dec 8th, 2005 at 04:42:23 PM EST
[ Parent ]
Thanks for delivering this spot-on and measured reply to him/her. I didn't have the nerve yesterday to reply to this stuff that as you say has not much to do with anything we said, yet was delivered in such a hectoring tone.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Fri Dec 9th, 2005 at 04:49:38 AM EST
[ Parent ]

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