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Why millions of Africans have a stake in the outcome of Europe's farm row

For every dollar to be dished out to Africa at the G8 meeting next month, another is snatched away by Western protectionism

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Raymond Whitaker reports 19 June 2005

Earlier this month it was debt relief. Next month, at the G8 meeting in Scotland, it will be aid to Africa. Had they wanted to, the leaders at last week's EU summit could have brought about a big change in a third area: fair trade.

But while much of the wrangling in Brussels was over the future of the EU's Common Agricultural Policy, the last thing on the participants' minds was its impact on Africa.

When CAP reform is on the agenda, it is because of the burden on European taxpayers, not the burden on millions of African farmers. Yet aid agencies complain that for every dollar that will be dished out to Africa at the G8 gathering in Gleneagles in July, another is snatched away by perverse farm subsidies.

Changes in the rules have curbed Europe's notorious "mountains" of butter and "lakes" of wine. However, Tony Blair's Commission for Africa has pointed out that the EU remains "the largest protector of agriculture in the world", and is still dumping surplus foodstuffs at a fraction of what it cost to produce them.

There are few countries in sub-Saharan Africa developed enough to compete in world agricultural markets, even without the distortions caused by EU subsidies. "For the poorer African countries, it isn't about exports," said Claire Melamed, a trade analyst for Christian Aid. "It's about their farmers having to compete in local markets with heavily subsidised imports from Europe."

But while international trade talks may compel the EU to export its produce at something closer to the real cost, aid bodies say that the World Trade Organisation, World Bank and other international bodies are also forcing developing countries to give up tariff protection for their fledgling agribusinesses, exposing them to the full force of global competition before they are ready.

Some of the ill-effects are offset by allowing the poorest countries to sell their produce here at inflated European prices. That is what brings mange tout peas from Kenya to our dinner tables. "The only way Africa exports food here is through loopholes," said Matt Griffiths of the Catholic Fund for Overseas Development. "But the WTO is seeking to close them. Unless compensation is forthcoming or the concessions are phased out carefully and gradually, fairer trade rules could hurt more African countries than are helped."

Liz Stuart, Oxfam's trade policy adviser, was clear: "The single change to the CAP that would help Africa the most would be to get rid of the export subsidies," she said. The WTO is supposed to be doing just that, but last week Oxfam reported that the rules had been drawn up so loosely that the EU can dole out more than 5bn (3.4bn) a year in export support while reporting only a fifth of the total to the WTO.

"At the same time as putting poor people out of business, [Europe and the US] are spending billions on aid and debt relief, with the aim of doing the exact opposite," said Oxfam. "A coherent package of aid, debt relief and fairer trade rules could instead lift millions of people out of poverty." Whatever happens at the G8, one chance of achieving that has already been missed.

Additional reporting by Marion Delros

How tariffs distort the market

Frozen chicken drumsticks: African countries have seen a dramatic rise in imports of cheap frozen chicken parts from the EU. Since European poultry farmers are able to feed their birds on subsidised grain, they can undercut local producers by half. Thriving poultry sectors in countries such as Ghana and Senegal have been hit by the forced opening of their markets.

Bananas: The EU and the US fought a battle over bananas a few years ago, with Britain and France favouring their mainly Caribbean former colonies. The US demanded access for bananas from their fiefdoms in Central America. Small African producers in places such as the Cape Verde islands scarcely get a look in.

Tomatoes: Since African countries were forced to dismantle tariffs protecting local growers, they have been unable to compete with European farmers, who receive export subsidies. Canned tomatoes and tomato paste from Europe have prevented processors in West Africa getting on their feet. The resulting slump saw tomato production fall by two-thirds.

Flour: Africa needs to import grain to feed its growing population, so it does not put up much in the way of tariff barriers. But some countries such as Mozambique are trying to develop local milling industries, grinding imported wheat into flour, so they have tariffs against imported flour. If they are forced to remove these under pressure from rich nations, the millers are likely to go under.

Maize: In many parts of Africa maize is the staple diet, often ground into meal to make porridge. Subsistence farmers as well as larger operators used to sell their excess production to local poultry producers, but that market has collapsed. Not only have imports of EU-subsidised cereal meal and pellets shot up, but chicken farmers (see above) have been wiped out by competition from Europe.

Beef: A prime example of the distortions produced by the CAP. The EU exports beef at just under half what it costs to produce, but gives preferential access to meat from some of the poorest countries. Arid Botswana has built up a prosperous ranching industry because it has not had to compete in Europe with big-time producers such as Argentina, but any liberalisation in WTO trade rules would quickly plunge the country into deep trouble.

Fish: African seafood exports to the EU are exceeded by the amount of subsidy Brussels pays European fishermen. Much of this goes to vessels operating in African waters, where they pay minimal royalties. EU tuna boats in five West African states pay less than 1 per cent of the value of their catch to those states.

Pineapples: An example of the absurdity that governs much of the trade in fruit. Kenya can export whole pineapples to the EU without encountering any tariffs, but if it tries to add value by putting pineapple chunks in cans, it is hit by duties of up to 27 per cent, because of the sugar used in the canned fruit.

Sugar: The most heavily subsidised product of all, with the worst distortions. While sugar prices in Europe are three times world levels, the EU exports at barely two-fifths of the cost of production. This stops countries such as South Africa from competing. The WTO is threatening to step in, but this could cripple poor countries such as Malawi, Ivory Coast and Madagascar, which get a windfall by being allowed to sell their sugar here.

Milk: European dumping of milk products, especially powdered milk, is thought to have put thousands of dairy farmers out of business. Trade between African countries in dairy products (as in other sectors) has been stunted because food processors can buy the raw material more cheaply from Europe. Sources: Christian Aid, Commission for Africa, Oxfam, EU statistics