Wolfowitz Calls for End to Farm Subsidies

Rich countries must abandon farm subsidies and give more market access to poor states if the Doha trade talks are to succeed, the head of the World Bank said today.

Paul Wolfowitz made his appeal amid fears that the World Trade Organisation (WTO) meeting of ministers in Hong Kong was in jeopardy because of the absence of progress on farm subsidies.

Writing in the Financial Times, Mr Wolfowitz said the need to reduce protection on agriculture was a central element of the Doha talks.

He warned that unless serious concessions were made by all sides, the Doha talks would fail "and the people who will suffer the most are the world's poor".

Mr Wolfowitz, formerly a leading Pentagon official, called on the US to step up efforts to cut farm subsidies and urged the EU to do more on market access for products from poor countries.

However, he added that developing countries also had to open their services and manufacturing markets and lower their own agricultural protection.

Mr Wolfowitz said it was not morally justifiable for rich countries to spend $280bn (£158bn) - nearly the total gross domestic product of Africa and four times the total amount of foreign aid - on support for agricultural producers.

The current round of WTO talks stalled in Geneva after wealthy countries failed to reach an agreement on lowering domestic agriculture subsidies and tariffs earlier this month.

Mark Vaile, the Australian trade minister and deputy prime minister, said the EU and "particularly France" were responsible for the deadlock because they had refused to accept a plan to cut European farm aid.

"They need to understand they are threatening the future of global trade and cheating millions of the world's poor out of new hope," Mr Vaile said. "It's not enough for them to provide aid and debt relief when the benefits of liberalising trade are so much greater."

An agreement in Hong Kong is supposed to pave the way for the conclusion of the Doha development round next year, but deadlock on farm subsidies has threatened to scupper the entire process.

The EU - generally seen as the villain of the piece by developing countries and the US - is working on a second and final offer this week.

The move follows what the US described as its "bold" proposal for trimming the most damaging of its multi-billion dollar agricultural subsidies by up to 60% and phasing them out within a decade.

Development activists say the US scheme is double-edged because it insists on poor countries opening up their manufacturing sectors, a step that could lead to the sectors' collapse in the face of foreign competition.

However, the US plan has put the EU on the spot, and it has struggled to come up with a unified position. France believes the latest round of common agricultural policy reforms - which cut the link between the level of subsidy and the amount farmers produce - went far enough, and is refusing to budge.

The idea of cancelling the Hong Kong meeting has been mooted, but Australia has rejected it. "I don't believe the meeting should be postponed, even if the EU does not put forward a better proposal," Mr Vaile said.

"I believe the EU and France would need to account for their actions before the parliament of world opinion."

Mr Wolfowitz increased pressure on the industrialised world when he said the temporary discomfort of industrialised countries in getting rid of farm subsidies was "nothing compared with the daily discomfort and deprivation faced by the world's poorest people".