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t yj etyjyjerj Overall, the United Nations has estimated that while developed nations give about $50 billion a year in foreign aid to the developing world, agricultural subsidies cost producers in the developing world some $50 billion in lost export revenues, effectively canceling out the effect of the aid. As one UN official has noted, “It’s no good building up roads, clinics, and infrastructure in poor areas if you don’t give them access to markets and engines for growth.” Similarly, Oxfam has taken the unusual position for a charity of coming out strongly in support of the elimination of agricultural subsidies and price supports to developing world producers.

By increasing world prices and shifting production from high-cost, protected producers in Europe and America to lower-cost producers in the developing world, Oxfam claims that consumers in rich nations would benefit from lower domestic prices and the elimination of taxes required to pay for the subsidies, while producers in the developing world would gain from fairer competition, expanded markets, and higher world prices. In the long run, the greater economic growth that would occur in agriculturally dependent developing nations would be to everyone’s benefit. Although subsidies have been against the spirit of World Trade Organization rules, under the terms of a 1995 “peace agreement” WTO members agreed not to take each other to court over agricultural subsidies. However, that agreement expired on December 31, 2004. Signs are growing that unless rich countries take steps to cut their subsidies soon, a number of efficient agricultural exporting countries will launch an all-out assault on farm subsidies. Indeed, Brazil did not even wait for the “peace agreement” to expire; in late 2003 it filed a complaint with the World Trade Organization, claiming that