food prices will indeed hit poor
Letter, August 12, 2004)
Sir, William R. Cline's reaction
(Letters, August 9) to my exposure of the fallacy that the removal of the
rich country subsidies and protection in agriculture is desirable because
it will do most good to the least developed countries (LDCs) is to deny
the fallacy by assertion.
Mr Cline concedes that two-thirds of the LDC poor reside in the countries
that are net food importers. The majority of these countries will surely
be hurt by higher food prices. I see nothing in his "model" that
shows anything otherwise except by untested assumptions.
A bigger, and largely unnoticed, problem he does not address is that even
the LDC exporters stand to lose from the liberalisation. They currently
enjoy duty- and quota-free access to the European Union internal price,
which will decline once the liberalisation takes place.
This point is graphically illustrated by the fact that the recent World
Trade Organisation ruling against the EU sugar subsidies, which I welcome
because it moves the global trading system towards a less distorted
regime, was seen by the ACP (Africa, Caribbean and Pacific) countries that
include all African LDCs as detrimental to their interests. And they had a
good reason for it: many are currently able to sell sugar in the EU market
at three times the world price. The complainants in this case were the
richer developing and developed countries - Australia, Brazil and Thailand
- unsupported by any LDCs.