Moreover, the goal of rural and agricultural development needs to be given additional support across OECD countries where policies should aim to diversify and improve future employment opportunities in the farming sector, particularly for smallholders.22
How much revenue could be mobilised? Given that a significant proportion of OECD subsidies are ultimately spent supporting large agri-corporations and industrial agricultural practices, steep cuts to existing levels of domestic subsidies are necessary. As a minimum, these cuts should eliminate those subsidies that facilitate the overproduction and export of artificially cheap produce to developing countries (including indirect and hidden subsidies). Reducing agricultural subsidies by an average of 50% across OECD countries could raise $187bn per year, which could instead be used to tackle poverty and increase food security in the Global South. Remaining subsidies should be re-oriented to support small-scale producers and agro-ecological farming practices, alongside wider reforms to agriculture based upon the principles of food sovereignty. 50% reduction in total OECD agricultural support = $187bn per year.23
Fixing the farm subsidy regime Subsidies have been a key stumbling block in trade negotiations ever since agriculture was included in the World Trade Organisation agreement at its inception in 1995. The Agreement on Agriculture (AoA) has long been criticised by civil society groups for reducing tariff protections for small farmers, while allowing rich countries to continue paying their farmers massive subsidies that developing countries cannot afford. In effect, the AoA locked in the disadvantages and unequal playing field that developing countries already faced in agricultural commodity markets. Considerable contention has existed both against and between the EU and US in subsequent negotiations over their maintenance of subsidies, which are seen to operate effectively as barriers to free trade. Following the start of the Doha ‘development’ round of trade talks in 2001, many campaigners focused on the subsidies issue with the oft-heard claim that while nearly three billion people in the world are forced to live on less than $2 a day, the average European cow receives more than that amount in government subsidies.24 At the Cancun Ministerial in 2003, the new ‘Group of 21’ countries – led by some of the developing world’s most important agricultural producers and exporters, including Brazil, India and China – demanded a rapid phase-out of agricultural subsidies in the US, EU and Japan.25 The US in particular was not only unwilling to cut subsidies, but continued to expand agricultural protections to appease domestic interests – in fact almost doubling subsidies on some products in the preceding US farm bill in 2002,26 and increasing them again in a five-year programme of subsidies in 2008.27 Subsidy levels in both the US and EU have since decreased in recent years, especially from 2006 onwards. With the rise in global food prices, subsidy levels have reduced in those countries where part of the support to farmers is linked to low prices, although total subsidy levels still remain considerable for most OECD countries.
End support for agribusiness
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