At the same time, farmers from developing countries have been complaining that these farm subsidies were a hindrance to fair competition on international markets and to fair trade, because they were not subsidized but had to compete with those who were cashing the difference between the international market price and their higher production costs. In addition, subsidized food and agricultural commodities imported by developing countries were cheaper than their own locally produced food, and this ruined their own small-holder agriculture. For instance, in Senegal, rice imported from Thailand was cheaper than rice grown in the southern region of Casamance, or chicken meat imported from Europe at a dumping price compared with locally raised poultry, have marginalized local farmers and subsistence agriculture.
When in 2007-2008 prices for many crops reached high records, rich countries pursued the same policy aimed at protecting their farmers. The Doha trade round negotiations failed because rich and developing countries could not reach an agreement on farm subsidies. Although the former agreed on a gradual elimination of subsidies and tariffs on agricultural imports from developing countries, both the US Farm Bill and the European Union's common agricultural policy stick to their assistance to both US and European farmers. The French president, Nicola Sarkozy whose country chaired the European Union council from July to December 2008, has pushed "Community preference", so as to block food imports, after asserting, before his presidency, that farmers should live on their earnings, not from subsidies.
The European Union has adopted rules (since January 1st, 2006) that indicate how imports should satisfy environmental, hygiene and animal-welfare requisites, which developing countries consider a major challenge to their capacity to comply with them.
Adapted from The Global Food Crisis Causes Prospects and Solutions
A. Guided Commentary
1) According to the text, why have European countries given subsidies to their farmers for decades? (2 points)
2) Referring to the text, explain the impact of subsidies on African agricultural products on the international market. (3 points)
3) What did European farmers threaten to do if subsidies were eliminated, based on the text? (3 points)
4) What are the Doha trade round negotiations, referring to the text? (3 points)
5) What do developing countries think of the European Union's 2006 rules, according to the text? (3 points)
What should African farmers do to be competitive on the international market, if American and European subsidies were eliminated? (6 points)