EU dumping its meatWith its intensive meat production, the EU is one of the largest exporters of meat in the world. Most of this meat is sold below production cost. This is partly because farmers receive direct income support from the EU. Maybe more significant is that animal fodder, which makes up 44% of farming costs, is heavily subsidised. On top of this, the EU uses export support to get the meat out on the competitive world market. While the EU has limited its milk and wine production through quota systems, there is no quota system in place for meat production and export.
Flooding the world market with unfairly cheap meat has a severe effect on food production in developing countries, a phenomenon called 'dumping.' The main reason behind the EU dumping policy is the overproduction of meat. This overproduction has its roots in the more than 50 year old Common Agricultural Policy, or CAP, meant to make the EU self-supporting in food production to not be dependent on food imports. Instead, it has resulted in massive overproduction of meat and dairy products that depends heavily on animal fodder and energy inputs from outside the Union.
In developing countries, dumping throws the bottom out of any regional food market and it makes it impossible for smallholders to sell their products, causing mass poverty and migration to the capital cities. Agriculture is vital in reducing and eliminating poverty, something the EU and US policy makers of the 1940's and '50's knew very well, so they protected their own. Most countries subject to dumping are banned from defending their markets by the WTO 'anti-dumping' tariff measures, agreed upon in the Uruguay Round on Agriculture. The promise of the EU and US to stop their export subsidies was never realized.
Using the anti-dumping tariffs is a tool used only by a small number of industrialized countries and is beyond the reach of most countries that are affected by dumping practices. These are also banned from preventing dumping under the Structural Adjustment Programs (SAP) of the IMF and World Bank (see page 10). SAP's are introduced as a measure for resolving a countries' debt situation and often have tariff reduction as a first step. For many countries with high debts and a viable agricultural base like in Sub-Saharan Africa, the dumping practices of the EU and US have created a vicious cycle in which domestic supply is depressed, leading to more imports and more debt, in turn leading to less governmental support for the domestic agriculture and more food imports, etc. Ironically, these countries also receive EU development aid which is used to alleviate these problems instead of facilitating development.
Global agriculture today is concentrated among a small number of large agricultural corporations which control every aspect of the production, from the seeds and the fodder to the slaughter of the pigs and packaging of the meat. These corporations can internally subsidize their products below market prices by using both EU and US subsidies and profit from other market opportunities along the food production chain.
Dumping can be stopped, starting with eliminating export subsidies, something all G8 countries have committed themselves to but somehow have failed to act on. The iron grip of the agricultural corporations on food production must be broken and they must be banned from internally subsidizing themselves. Implicit and explicit government subsidies for these companies should disappear and they should be forced to be more transparent. Moreover, countries and communities (especially those of which most of the workforce is still in agriculture) should be allowed to protect their agricultural sector from the world market.
Sources:
www.southcentre.org/info/southbulletin/bulletin53/bulletin53-04.htm www.tacd.org/docs/?id=199
www.tradeobservatory.org/library.cfm?refid=80706
