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EU's department of irony now in charge of aid

Fri, 07/18/2008 - 12:14pm

Having apparently run out of farms to subsidize, the EU is sending some spare 1 billion Euros to Africa to help farmers there cope with food shortages and rising prices. The funds were an unused portion of the EU's agriculture budget, which is worth about 120 billion euros -- more than 40 percent of the EU's annual expenditures.

European Commission spokesman Johannes Laitenberge says the "crisis" in food supply helped spur the EU into action:

There's a fairly broad consensus on the need to act here, given the crisis which is taking place," he said. "In the Commission's opinion, this is the most efficient and most rapid instrument that could be used."

Pardon my cynicsm, but wouldn't the best thing for African farmers be for the EU to eliminate its 120 billion in farm subsidies altogether?

UPDATE: My colleague Preeti reminds me that at least the EU is finally spending more on economic growth and employment programs than farm subsidies:

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I agree. I'm a supporter for

by cigrainger on Fri, 07/18/2008 - 4:19pm
I agree. I'm a supporter for trade, not aid. If they were to cut the 120bn in subsidies, they would allow for a truly competitive global market. The same goes for farm subsidies and import tariffs in the US. Sugar is a great example: It is a far better material for ethanol production, as is clear in Brazil, but the import tariffs on sugar allow US sugar growers to charge higher prices. This not only keeps Americans paying a higher price for sugar (higher than corn, which, being used for ethanol has contributed to this food crisis), but has pushed candy manufacturers overseas (destroying American jobs in the process) and has made the US market impenetrable for one of South America's best potential crops.

For all the tongue wagging about free trade by 'conservatives' in the US, there is very little support for ACTUAL free trade policies. Of course this is due to the massive agricultural lobbies and the fact that many mid-western candidates are made or broken on supporting those subsidies and tariffs. So what do we do?

It's clear that aid creates dependency and overall has failed to stimulate developing economies, but real free trade (which would benefit developing countries, many of which have primarily agricultural export potential) is impossible in both the EU and US due to subsidies and tariffs (which are part of the reason aid has failed, there is not enough of a market for the exports). Does anyone put forward a reasonable third way? (I ask this sincerely).

On another note, I have to say that this is more like emergency aid in a time of crisis than an aid policy like the Obama aid post just a few posts up. I suppose this comment is in regard to both.