PROTECTIONISM BY RICH COUNTRIES IS CULPRIT
FOR FOOD CRISIS - ANGARA

Senator Edgardo J. Angara today said that the long-standing imbalances between rich and poor countries in international agricultural trade - an imbalance that stems from developed countries' protectionism - has fueled the growing food crisis.

He said that while agriculture is recognized as the most vital industry to fight hunger and poverty, it is also the sector with the highest level of trade distortions.

Speaking before members of Philippines, Inc., an organization of business leaders and entrepreneurs, Angara lamented that while developed countries forced us to open our markets to their industrial goods, they kept their markets closed to our agricultural products with various mechanisms such as tariff and non-tariff barriers.

In addition, contrary to WTO principles, they give their farmers huge subsidies, which developing countries cannot afford, thus creating an unfair playing field.

Huge domestic support and export subsidies provided by developed countries to their farmers render developing countries' farm products uncompetitive.

"Our wealthy neighbors Japan, South Korea and Taiwan all protect their native rice farmers. Rice grown in Spain and Italy is aided by European subsidies and protectionism. The US spends billion subsidizing domestic rice farmers," he said.

Recently, the US Congress approved a $307 billion farm bill that will reward American farmers. This amount is 18 times the Philippine agriculture income last year. Subsidies for rice, cotton, corn, soybeans, wheat and other crops amount to $43 billion. Similarly, the hotly debated EU Common Agricultural Policy seeks to hand out --40 billion (US$63.1 billion) in subsidies to European farms, or roughly US$173 million a day.

"Agriculture in developed countries is a big, integrated business. In addition, they are awash with subsidies from government. How will a poor corn grower from Isabela compete with a corn farmer in Iowa?" said Angara.

"Developing countries like the Philippines simply cannot afford to provide its farmers the same subsidies that developed countries grant them. As a result of unfair trade, developing countries are inherent losers," he said.

"Free trade has not worked because it has never actually happened: trade agreements of the past have been neither free nor fair. They have been asymmetric, opening up markets of developing countries to goods from the advanced industrial countries without full reciprocation," he said.

Agriculture remains the largest employer, the largest source of GDP, and the largest source of exports and foreign exchange earnings in most developing countries. About 75 percent of poor people worldwide live in rural areas, and most of them dependent on agriculture. In the Philippines, two out of three poor people live in the provinces.