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Subsidies to agriculture

Subsidies to agriculture

By Devinder Sharma

Queen Elizabeth II of Great Britain is not a farmer but is among the main recipients of agricultural grants: Her son, and heir to the British throne, Prince Charles, received more than $ 480,000 in support of agriculture for his properties in the Duchy of Cornwall and the Duchy's farm.

Britain's royal family is not the only recipient of state agricultural subsidies. In 2003, Prince Joakim of Denmark received grants amounting to $ 220,000 for his Schakenbourg estate in South Jutland. Prince Albert, who reigns in Monaco, got $ 300,000 last year in farm subsidies.

At a time when the World Trade Organization fiercely grapples with the controversial issue of massive agricultural subsidies to farmers and agro-industrial companies in rich and developed countries, the reasons why these countries with unable to withdraw agricultural subsidies. Not only royalty, but also a long list of characters have benefited from agricultural subsidies; hence the increasing resistance to any significant reduction in them.


The richest man in the UK, the Duke of Westminster, who owns some 55,000 hectares of farmland, received a direct grant of $ 480,000 in 2003-04, plus $ 550,000 annually for the 1,200 dairy cows he owns. According to the reform provisions of the Common Agricultural Policy, his right to the subsidies will remain intact, with the exception that the subsidy he now receives for the cows will be granted to him for the pastures he maintains.

In the United States, recipients of federal support for agriculture include Ted Turner and David Rockefeller.

While royalty tops the list, how could politicians be left behind? Marita Wiggerthale, a German researcher and activist, has revealed in a presentation (“What's wrong with EU agricultural subsidies? What's wrong with the EU agricultural subsidies?) That only in Denmark, four of the 18 ministers (or their spouses ) have received grants from the EU. Among the 2003 recipients are the Minister of Food, Agriculture and Fisheries, Mariann Fischer Boel, who received a total of $ 480,000; the Minister of Education, Ulla Tornes, $ 655,000; and the Minister of the Economy, Thor Petersen, $ 175,000. In the Netherlands, the Minister of Agriculture, Cees Veerman, benefited in 2004 from grants worth $ 180,000.

Among Danish parliamentarians, a considerable number, most of whom belong to the Liberal-Democratic Party of Denmark, receive agricultural subsidies. On the list are Jens Kirk ($ 273,000) and Jens Vibjerg ($ 110,000). But it is even more significant that Nils Busk Simonsen, a veteran member of the Liberal Democrats in the European Parliament, received a generous grant of $ 382,000 in addition to his annual salary. In Denmark, a total of 109 individuals and organizations or institutes continue to receive more than $ 165,000 annually in grants.

Subsidies to agriculture are also being awarded for research and development, and most of these research funds are of course helping countries like Denmark to export training to developing countries as part of bilateral agreements. trade. For example, the Danish Institute of Agricultural Sciences receives an annual grant of US $ 160 million. In 2003, the Danish Agricultural Center for Advisory Services received $ 4.8 million. Interestingly, in the same year, the board members (including Peter Gaeelke, Henrik Hoegh, and the Chairman of the Board of Directors, Gert Karkoz) jointly received a $ 1,500,000 grant.

In Spain, 300 families pocket most of the agricultural subsidies, with an average for each of more than 354,000 US dollars. Of these, only seven of the most important receive support of $ 7,000 a day.

It is certainly an unequal world, and perhaps the most glaring of all the world's inequalities is the way livestock are pampered in rich countries at the expense of several hundred million farmers in developing countries. When I first compared the lives of western cows with that of peasants in developing countries, I did not realize that it could hurt the sensibilities of at least some economists and policy makers. It is estimated that Europe now provides a daily subsidy of $ 2.7 per cow, and Japan does three times that, 8 $, while half of the 600 million farming families in India survive on $ 1.50 a day .

In the United States, only 20,000 cotton growers collectively receive a subsidy of $ 10.1 million annually.


Mainly because of these subsidies in many of the high-income developed countries, in the richest trading bloc of the Organization for Economic Cooperation and Development the average income in the agricultural sector is higher than the average income of all households in the country. In the Netherlands, for example, the average income per family of farmers is almost 275 percent of the average family income, 175 in Denmark, 160% in France and 110% in the United States and Japan. Agriculture in India continues to have negative tax treatment, with more than 40 percent of the peasant population willing to abandon agriculture in search of jobs as servants in urban centers. Peasants occupy the lowest echelon of national income, and only landless agricultural workers rank below them.

As in India, where the bulk of agricultural subsidies (in the form of cheaper supplies) go to large farms, small farmers do not benefit from the huge support (about $ 1 billion a day) from countries. industrialized. In Europe, only 2,000 large farmers receive grants totaling more than $ 60,000 per year. These large farmers make up only 0.4 percent of the peasant population and now, when the European Commission has proposed to impose a ceiling on direct payments in an amount that is still six times higher ($ 360,000 per year) through called the one-time agriculture payments formula, it has met such fierce resistance that it has had to withdraw the proposal.

About 65 percent of European farmers receive grants of less than $ 6,000 a year. They are small farmers unable to support themselves and they are the ones who are gradually abandoning agricultural work. In Europe, it is estimated that every minute a peasant abandons agriculture.

The real beneficiaries of agricultural subsidies in developed countries, therefore, are not small farmers.

Approximately 80 per cent of total subsidies go to agricultural companies (or large farmers). The sugar giant, Tate & Lyle, received $ 404 million in 2003-04. Arla Foods made $ 205 million in 2003. In the UK alone, Nestlé received annual grants of $ 20 million. Denmark's Danish Crown company raised 19 million and 136 German dairy companies receive a grant of $ 78 million. The list is endless.

Despite such huge state subsidies that go to the profiteers, distinguished people, and large agricultural companies (yes, on behalf of farmers), the real fact is that developed countries do not make serious efforts to end this waste that hurts Third World farmers. But even worse, they act against these subsidies (many of which as direct payments go to "black boxes") as if they did not distort the market and therefore are excluded from any reduction commitment. However, since these subsidies do not go to small farmers, developing countries have to fight for their complete withdrawal before allowing greater access to their markets. Developed countries would have to consider that either agricultural subsidies are classified into two categories: one dedicated to small farmers and the other to agro-industrial companies and large landowners, or, taking into account that less than 20 percent of the thousand millions of dollars that are distributed daily benefit small farmers, the remaining 80 percent has to be flatly discarded to advance the negotiations on agriculture.

* Devinder Sharma is a Food and Trade Policy Analyst based in New Delhi - Original title: Farm Subsidies: The Report Card Origin: ZNet Daily Commentaries; Thursday November 24, 2005 - Translated by Felisa Tailor and reviewed by Genoveva


Video: Lets Talk Farm Subsidies- #140 (May 2021).