USA/Africa Dialogue, No 531: The gains of Africa's poverty

One of the richest women in the world, Queen Elizabeth of England, her heir apparent, Prince Charles and Tate & Lyle all have been named among those who receive the fattest handouts under the Common Agricultural Policy (CAP) subsidy of the European Union (EU).

The CAP is an age old instrument which puts barriers in trade between the EU and the developing countries. It raises EU farmers’ income and encourages excess production of food.

Much of the surplus is dumped in poor countries at cheap prices that discourage local production – particularly in Africa, South America and Asia: From Sierra Leone to Sri Lanka, Benin to the Bahamas, and from Bangladesh across to Burma.

CAP payment figures in the financial year 2003-2004, the most recent for which data are available, showed that Tate & Lyle received the lion’s share of more than £127 million (N31.75 billion). Elizabeth was paid £545,897 for her farming related business on her Sandringham House and Windsor Castle estates.

Charles, who weds Camilla Parker-Bowles on 8 April, got £134,938 for his Duchy of Cornwall estate and another £90,527 for the Duchy Home Farm on his Highgrove estate.

Nestle UK Ltd, an agri-food company like Tate & Lyle, received over £17 million, the sixth highest amount.

Under the CAP rules, the highest payments go to farmers who own the most land, keep the most farm animals and grow the most cereals.

This makes it possible for big landowners to pocket handsome millions of pounds yearly.

For instance, a landowner in England, Richard Sutton, picked up more than £1 million on behalf of his Settled Estates which run the 7,000-acre Benham estate in Berkshire and farmland in Lincolnshire.

At 66, he is said to be worth about £120 million and ranked 321st richest in Britain, according to the Rich List.

Other aristocrats were named in the list released by the Department of Environment, Food and Rural Affairs to The Times of London under the Freedom of Information Act.

They include The Duke of Marlborough who got £511,435, Earl of Radnor (£476,587), Duke of Richmond (£456,404), Duke of Northumberland (£450, 740), Duke of Westminster (£448,472), Duke of Bedford (£365,801), Lord IIiffe (£356,609), Marquess of Cholmondeley (£306,619) and Richard Fitzherbert (£245, 215).

Total CAP subsidy is currently put at about £3 billion in Britain and £30 billion across the EU.

The EU figure represents nearly 50 per cent of its budget, down from about 66 per cent 20 years ago. The £3 billion subsidy in Britain, a charge to the taxpayer, adds about £800 a year to the food bill of a family of four, said a report.

The Times ran an editorial on Wednesday which called the subsidy “grotesque” and the CAP “obscene”, and described the largesse as “morally and economically incredible.

“In crude terms,” it argued, “this is a structure by which Europe’s poor transfer money to Europe’s rich at the expense of both themselves and Africa’s impoverished”.

Phil Bloomer, who heads the Make Trade Fair campaign of Oxfam was quoted as saying that the CAP “destroys poor farmers overseas by encouraging overproduction and dumping”.

France, Germany and Italy also benefit generously from the CAP, considered the world’s most protectionist regime.

Agricultural subsidy in the West has typically been fingered as one of the main barriers to Africa’s export market and an element in its poverty.

Although British Prime Minister, Tony Blair, used his Commission for Africa Report two weeks ago to call for an end to these trade barriers, few are persuaded that he will carry the day with his EU and American counterparts, all of whom are deep stakeholders in the subsidy regime.

The toll on Africa has been crushing. Its exports reduced from a mere 4 per cent in 1980 to a niggardly 1 per cent in 2003. Combined with tariffs, these subsidies reduce export earnings of developing countries by £39 million a year, a startling 50 per cent more than they get in aid.

It is estimated that freer trade could reduce by 60 million the number of sub-Saharan Africans living in absolute poverty.