"Punch-up over handouts"

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"Rich countries are under pressure to end their farm subsidies. Might some poor countries be sorry to see them go?"

This month the World Trade Organisation (WTO) upheld its ruling that certain agricultural subsidies by the United States and other rich nations distorted trade and breached limits agreed in 1994. Consequently, there is likely to be a reduction in agricultural subsidies in the foreseeable future.

"Most poor countries are net importers of agricultural goods. A study in 1999 found that 33 of the 49 poorest countries import more farm goods than they export; 45 of them are net importers of food." These countries can expect, at least in the short run, that their import costs will go up, and for most, food costs will also go up. In the long run, poor countries may export more into world markets, but it seems likely that countries such as Argentina and Brazil will be the greatest beneficiaries among developing nations.

Subsistance farmers may notice little difference, but countries subsidizing urban consumption and the urban poor may face higher food costs!