Oxfam: US farm subsidies offer 'smoke and mirrors'

The United States will have to make only negligible cuts to the subsidies it pays to farmers, despite a supposed breakthrough offer on agricultural reform at the World Trade Organization (WTO), international agency Oxfam said today. Under its proposal made today, the US would have to cut its spending on agriculture by only 2% – from $74.7bn to $73.1bn at the end of the Doha round implementation period.

The United States will have to make only negligible cuts to the subsidies it pays to farmers, despite a supposed breakthrough offer on agricultural reform at the World Trade Organization (WTO), international agency Oxfam said today. Under its proposal made today, the US would have to cut its spending on agriculture by only 2% – from $74.7bn to $73.1bn at the end of the Doha round implementation period.

The US said it would reduce the ceiling on trade distorting support to its farmers by 60% but Oxfam said that this would leave overall spending almost untouched and poor farmers in developing countries would not benefit.

The US is also demanding that developing countries cut their tariffs more than rich countries at the WTO, in direct violation of the principle of special and differential treatment.

"It's a case of smoke and mirrors. If this offer goes ahead, trade distorting domestic subsidies will remain almost completely unchanged and dumping will continue. Meanwhile harsh concessions on market access will be wrung from developing country members in exchange for illusory progress," said Celine Charveriat, Head of Oxfam International's Make Trade Fair Campaign.

"If this were a game of limbo the US would be agreeing to have the bar lowered to eyebrow level. It is simply shifting payments around from one place to another rather than cutting them significantly. This will make hardly any difference for the millions of poor farmers suffering from unfair US competition in sectors such as corn, rice or cotton," she added.

The US proposal was put forward today in an article by the US Trade Representative, Rob Portman in the Financial Times. The proposal will be discussed in Zurich this afternoon at a meeting with other key countries including the EU, India and Brazil.

The US proposes an end date of 2010 for export subsidies, but hardly any of its payments are classified in this way. It says it will discipline food aid, which acts as a hidden export subsidy, but gives no detail of how it will do this.

Charveriat: "On export subsidies the US is essentially shooting with somebody else's bullet: committing to eliminate payments it doesn't have and failing to make meaningful commitments on the instruments it does use: export credits and food aid."

"What looks on the surface like a genuine attempt to move the talks forward is in fact a very clever piece of manoeuvring by the US. This proposal would allow them to get away with doing next to nothing in return for some very painful concessions from developing countries. The devil is in the details, and these details are very devilish indeed."