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Last Updated: Friday, 12 September, 2003, 04:37 GMT 05:37 UK
'Cut farming subsidies', says CBI chief
Farmers receive huge subsidies
Agricultural policies are blocking progress, says Digby Jones
The director-general of the CBI has called on Europe and the US to "practice what they preach" by agreeing to slash agricultural subsidies.

Digby Jones was speaking as he prepared to meet Trade Secretary Patricia Hewitt and the UK delegation to the World Trade Organisation talks in Cancun, Mexico.

Mr Jones said the EU and US should respond to demands from developing countries on farming, for the sake of free and fair trade.

FARM SUBSIDY PER COW
EU: $803
USA: $1,057
JAPAN: $2,555
The EU spends about $100bn (63bn) on propping up its own farmers.

Economists estimate the world's poor countries lose a total of $24bn (15bn) a year because of the subsidies paid to farmers by rich nations.

'Seize the moment'

A new coalition of developing countries - styled the G21 - has been formed in Cancun to present a united front on behalf of those calling for reform.

Mr Jones, who will be advising the UK delegation at the talks on behalf of British business, believes Europe and America should respond to the new group's position.

He said failing to do so could put hopes of an agreement in jeopardy.

He said: "Agriculture has become the biggest single block to progress in the Doha development agenda which has the potential to benefit billions of people.

TRADE AND GLOBALISATION
Key issues at the trade talks

"The EU and US will fail to win the case for global free and fair trade unless they prove they can practice what they preach."

The CBI chief believes the EU and US should "seize the moment" by setting out specific proposals on cutting farm subsidies.

"Now is the time for action if the goal of free and fair trade to the benefit of developing and developed countries is not to be jeopardised."

The calls came after Europe and the United States were accused of trying to smash a powerful new alliance of poor states bent on re-writing world trade rules.

Standing firm

The G21, which includes China, India and Brazil, is demanding the complete abolition of subsidies paid by rich countries to their farmers which, they say, locks the developing world out of international markets.

The EU and the US have promised to reform the subsidies, but their initial suggestions have been criticised for not going far enough.

They say poorer countries must agree to broader legal and commercial reforms in return for any concessions on farming.

Aid agency Action Aid accused the US delegation at Cancun of attempting to bully poor nations into accepting its proposals - an accusation that was vehemently denied.

But the G21 was, so far, standing firm and new members were expected to join in the next few days, Action Aid added.

On Wednesday around 5,000 protesters were blocked by riot police from marching on the meeting.

A South Korean farmer stabbed himself to death in what a friend called an "act of sacrifice" to show his disgust at the WTO and its policies.




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