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Richest 1pc of US farmers get 72pc of govt subsidies; cotton costs $US156,000 per farmer; global fishing subsidies hurt poor nations, ruin ecology

Posted by gmarkets on 5 October, 2007

In the US, the richest 1 per cent of farmers got 72 per cent of the government payouts, and US cotton subsidies cost nearly $US4 billion, or $US156,000 a farmer, wrote Mike Moore in The Australian Financial Review (4/10/2007, p.63).

Not just in US: Three times more went to US cotton growers than all the US aid to sub-Saharan Africa in 2001. The story of sugar was as bad and coffee even worse. This appalling story was true, too, of protectionist policies in the Nordic countries, Switzerland, Japan and South Korea.

Fishing subsidies, too: One trade issue where at last environmentalists get it and were supporting the Doha round was fishing subsidies – 2.6 billion people got at least 20 per cent of their total animal protein from fish, 1 billion people depended on fish as their primary source of protein. The global fishing fleet capacity was now 250 per cent greater than what the oceans could sustainably produce. Fishing subsidies encouraged inefficient, energy-costly overfishing. The University of British Columbia suggested fishing subsidies cost about $US30 billion to $US34 billion a year and supported fishing fleets sucking up species in places that would not be profitable without such subsidies. This accounted for $US10 billion to $US15 billion of the subsidies, equal to 20 to 25 per cent of the global fish trade. Subsidies accounted for about 25 per cent of global fishing revenue. The biggest subsidies were by Japan $US5.3 billion, the European Union $US3.3 billion and China $US3.1 billion.

Poor nations lose: Who were the biggest losers? Poor countries. Subsidies wer always a battle between which country had the biggest treasury. With all this money slopping about, a terrible moral hazard existed where governments were offered millions of easy dollars for their fishing rights, so long as they didn’t ask. An example of this evil was poor Mauritania, where local fishers were put out of business by selling fishing rights to the highest bidders.

The Australian Financial Review, 4/10/2007, p. 63

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