Drinking rainwater from banana leaf, Nigeria. (c) I. Uwanaka/UNEP peopleandplanet.net
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Drinking rainwater from banana leaf, Nigeria. (c) I. Uwanaka/UNEP
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poverty and trade > factfile > farm subsidies

Farm subsidies

Posted: 04 Aug 2004

In 2000 the 29, mostly Western, countries belonging to the Organisation for Economic Cooperation and Development (OECD) paid out $327 billion in supports and subsidies to the farmers. The sum is roughly equivalent to the total annual output of sub-Saharan Africa. It comprised $114.5 billion of European Union production support and $54 billion for the USA. Supports from the other OECD countries, together with the estimated benefits of tariffs and non-tariff barriers, made up the remainder. The chief beneficiaries were large-scale agricultural businesses.

The losers are the farmers in poorer countries. Farm subsidies of more than $300 billion a year allow food crops exported by farmers in industrial countries to be sold at prices 20-50 per cent below the cost of production, under-mining farmers in developing nations.

In Mexico, Peru, and Colombia, farmers are turning to drug crops like opium, coca, or cannabis because their food crops cannot compete with cheaper, mass-produced imports.

In 2002, USA farm support is set for a huge increase, (see: Farm Folly, Financial Times, 6th May 2002).

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Guillermo, a cocoa farme, Dominican Republic. Photo: Fairtrade Foundation
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