Developing world loses $40 billion a year from Western protectionism

22 Mar, 2004

The developing world loses 40 billion dollars worth of potential agricultural exports each year due to protectionism and subsidies by rich countries, a conference in Dhaka was told Sunday.
The International Food Policy Research Institute, a Washington-based think tank focusing on agriculture in poor countries, said the lost exports would be able to add nearly 30 billion dollars to farmers' incomes in the developing world.
"There is no level playing field for the developing economies, including the countries in the South Asian region, as developed economies are pumping in a very high level of subsidies to their farmers," said Suresh Babu, a senior research fellow of the Institute.
He said the Institute's research found that "agricultural surpluses in rich countries, generated through protectionism and subsidies and then dumped onto world markets, hurt agricultural development in developing countries."
Poor countries' demands that Western nations slash agricultural subsidies brought about a collapse in World Trade Organisation talks in September in the Mexican resort Cancun.
The developing world argues that the subsidies artificially lower prices on goods, making it impossible for their farmers to compete.
Babu said Bangladesh and other South Asian countries whose economies are dominated by agriculture meant nearly exclusively for domestic markets needed to diversify to high-value farm goods that could make lucrative exports.
Babu was particularly critical of the poor level of agricultural investment in South Asia, saying "at least 10 percent of agricultural GDP should be invested in agricultural research."
"In India, for instance, only two percent is invested and in Bangladesh the amount is even less," he said.
The five-day workshop here brings together 24 delegates from South Asia and the United States.
P.K. Joshi, another expert at the Washington-based institute, said the meeting would help improve understanding of how South Asia can benefit from globalisation.
Zinatunnesa Khuda, head of the economics faculty at Bangladesh's Jahangirnagar University which is sponsoring the seminar, expressed fear that globalisation and the growing dominance of large corporations could leave millions of farmers in the developing world "vulnerable."
The Manila-based Asian Development Bank is also supporting the conference.

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