Egypt demands rich nation to cut farm subsidies
Published on Sunday 20th July 2008Geneva: The United States, Europe and other rich countries can help poor nations ramp up their own food production by agreeing to cut farm subsidies at talks this week, Egypt's trade minister said on Monday.
As ministers began searching for an urgent breakthrough in long-delayed global trade talks, Egyptian Trade Minister Rachid Mohamed Rachid said cutting agricultural subsidies would hurt poor countries and not just for farmers in rich countries.
"Egypt is a net importer of food products, we have been enjoying subsidised crops of wheat and corn and animal feed coming from all these markets... We know we are going to suffer," Rachid told Reuters in an interview.
"But looking at the real interests of Egypt, the region and the world it is in everyone's interests to see Egypt becoming efficient and productive in food and that could happen if we had a level competition field," he said.
This week's talks at the World Trade Organisation (WTO) -- aimed at finding an agreement to bring down barriers to trade in farm and manufactured goods -- are taking place in the shadow of soaring food prices around the world.
The boon for rich country farmers has raised hopes that the United States will agree to deep cuts in its agricultural subsidy ceiling, paving the way for Europe to make bigger cuts on its farm import tariffs and for developing countries like Brazil and India to cut tariffs on industrial goods.
Such a deal would settle the main dispute that has dogged the WTO's Doha negotiations for a global trade deal which are now in their seventh year but which risk years of further delay without a breakthrough this week.
Subsidies and other protections for farmers in rich countries have long been blamed for hurting agriculture in poor countries where higher output is now urgently needed as millions more face the risk of hunger due to the food price crisis.
"The distortion in the market place created by decades of very heavy intervention to support their agriculture have deprived places like Africa of serious investment in agribusiness," Rachid said.
"If you have all the subsidies coming in, it destroys your economics."
Egypt was working on plans for investment of up to $25 billion in its agribusiness sector over the next 10 years with funds coming from some of the world's biggest food producers, Rachid said.
But for countries like Egypt to succeed as a new food power, the United States, the EU and other industrialised economies had to reduce the risk of their subsidised crops flooding the market and depressing prices, he said.
"If the subsidies are removed and you have fairer competition on agriculture, the biggest benefit you will see is a serious flow of investment in emerging markets and in Africa," Rachid said.