Irish farm policies causing hardship in developing countries, says SA MP

Irish agricultural policies under the EU's Common Agricultural Policy are contributing to widespread hardship in developing countries, a visiting South African MP has said.

Heavily subsidised EU exports, including those of Ireland, were leading to increased unemployment and massive losses in several agricultural sectors in South Africa, Mr Robert Davies, chairman of South Africa's Trade and Industry Committee, said in Dublin yesterday.

Mr Davies pointed out that EU exports of beef to South Africa increased eight-fold between 1993 and 1996, thanks to export refunds. Up to 90 per cent of this beef, most of it low-grade meat, came from Irish and UK traders.

The traders were able to undercut local prices with the help of handsome export refunds, he said. These subsidies were worth three times the price at which the beef was being sold.

"Ireland should be acting in a way that does not create such distortions in the markets of developing countries. You need to take account of the imbalance that already exists in the world economy, by helping weaker economies to make the transition they require."

Mr Davies represents the Western Cape area of South Africa, whose fruit industry has been devastated in recent years by competition from EU producers operating with the benefit of export refunds.

In 1997, the largest fruit canning company closed its operations in the Cape, citing high EU subsidies as the reason. More than 2,000 jobs were lost. Unemployment stands at up to 40 per cent, and a further 4,000 jobs in a tomato canning factory have been under threat, again because of "dumping" of subsidised foreign produce.

South African producers of tinned fruit face high tariffs for entry to developed world markets; 17-24 per cent in the case of the EU. In addition, Greek and other EU producers are undercutting South African exporters in third-country markets with the help of subsidies. Thus, for example, South Africa's share of the Japanese market fell from 38 per cent to 13 per cent between 1983 and 1995, while Greece's rose from 0.6 per cent to 28 per cent.

Mr Davies says the EU often make adjustments to export refunds without taking into account their effects on the economies of developing countries. Even a small change in subsidies could dramatically improve the trading situation for poor countries.

During his visit, which was sponsored by Comhlamh, the association of returned development workers, he met a number of TDs and addressed the joint Oireachtas Sub-committee on Development Co-operation.