Ross Clark

Globophobia | 19 June 2004

A weekly survey of world restrictions on freedom and free trade

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The government wants to find ways of helping us to lose weight. It could start by ceasing to shower farmers with subsidies to grow sugar. Remarkably, given the public money that is spent on telling us not to eat fattening foods, the EU gave European sugar producers 819 million euros worth of subsidy last year, either in the form of guaranteed prices, direct subsidies for exports or in other help. Defra, for example, funds a Hertfordshire research centre, Brooms Barn, helping Britain’s 7,000 sugar beet growers to squeeze ever more subsidised sugar out of the East Anglian soil.

For this exercise, British consumers have their wallets emptied four times over. We pay once in the form of higher food prices because the EU sets a minimum price for sugar beet; it can get away with doing this because cane sugar from developing countries, which costs half as much to produce as does European sugar beet, is subject to quotas and tariffs. We pay again through our taxes to help EU farmers — especially French ones — undercut the cane sugar industries of developing countries and compete in the world market. Then we pay a third time for all the health quangos employed to tell us not to eat all this sugar and to eat instead fresh fruit, which receives no subsidy from the EU.

But worst of all, we have to pay a fourth time to supply aid to the undernourished masses in the Third World whose own sugar industries we have helped to undermine. According to Oxfam’s calculations, the subsidies paid to EU farmers cost Malawi £18 million and Mozambique £21 million in lost foreign exchange every year. The EU has agreed to phase out tariffs for sugar from the least developed countries, but this will not start until 2006.

It is nice to know that the government wants to help British fatties eat a little less. But it would be nicer if our leaders would liberalise agricultural trade and help underfed Malawians eat a little more.