"If you go to the market in Senegal you can buy European produce for a third of the local prices. So the Senegalese peasant farmer no longer has any chance of earning a living."
UN Special Rapporteur on the Right to Food
In 2004 the OECD states subsidised their agriculture to the tune of 226 billion euros. However, within the OECD there are considerable differences: at the lower end of the scale are Australia and New Zealand, who subsidise their farmers at less than 5%, while at the upper end are Iceland, Norway and Switzerland who subsidise at more than 70%. At 34%, the EU lies at slightly above the average of 30%.
A large part of these subsidies are export subsidies: they help to sell on the world market superfluous agricultural products which cannot be sold on domestic markets. This artificial price reduction depresses world market prices, thus making agriculture in many other parts of the world unprofitable. Even the conservative calculations of the World Bank assume that agricultural subsidies in the rich nations deprive farmers in poor countries of a market of at least 30 billion dollars. At the same time, the World Bank states that – as absurd as this sounds at first – if the subsidies were to be abolished this would benefit the agricultural sector to the tune of 250 billion dollars, albeit with a more just distribution: countries with low and medium incomes would profit the most at around 150 billion dollars.
While in rich countries like those of the OECD only around 5% of the working population are employed in agriculture and it only contributes 2% to the gross domestic product, in developing countries it amounts to an average of 36% of GDP and employs around 70% of the working population. The current FAO report entitled “The State of Agricultural Commodity Markets” emphasises that around 2.5 billion people in the developing countries are directly dependent on agriculture and thus most at risk from fluctuating and declining food prices.