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Lord Hylton: My Lords, I thank the noble Baroness, Lady Whitaker, for introducing this debate and for her understanding of the importance of small farmers. I am probably speaking against my own interest as a farmer and landowner in England. I am concerned about the subsidies that developed countries pay on exported food and farm crops to the rest of the world, often to the poorest developing countries. These can take away the whole livelihood of small farmers and growers who may be earning little more than a dollar a day. Export of milk powder, for example, can be particularly harmful to poorer dairy farmers and may discourage breastfeeding, so important to the health of children in all countries.
It is, of course, internationally agreed that export subsidies should be reduced and eventually abolished as distortions to fair trade. Some progress has been made; for example, in the European Union, where export subsidies have dropped from about 14 per cent
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to 5 per cent of the common agricultural policy total budget between 2000 and 2003. I shall come back to the size of export subsidies and the difficult task of ending them.
I turn now to the benefits of stopping these subsidies. Money is immediately saved, which can be used for better purposes. Once dumping of cheap exports has ended, producers and consumers in developing countries are freed to make their own decisions and plans. I argue that this freeing of local and regional markets is a better form of help than direct aid or debt relief. That is so because both aid and relief require administration before they can be translated into better health and education services or other social investments. These desirable results can be achieved only slowly, whereas the ending of export subsidies should immediately start to put money into the hands of local people. Removing subsidised imports should stimulate local markets and be relatively unaffected by corruption or maladministration. The United Nations and other aid agencies have already admitted that an alarming proportion of aid is siphoned off and never reaches the poorest people.
I come now to the scale of the subsidies in question. In 2003, the European Union spent 3.7 billion euros on agricultural export refunds. That was significantly less than in 2000, but more than in 2001 or 2002. The United States Government were recently spending over 6 billion dollars per year on agricultural exports including food aid. I mention in passing that food aid can have unhelpful effects similar to export subsidies. Cash aid or vouchers are in almost all cases better.
In the case of cotton, the United States is thought to have subsidised 25,000 growers by more than 3.5 billion dollars. That is three times the amount of American aid to the whole of Africa and more than the entire gross domestic product of some African cotton-growing countries. European sugar subsidies are roughly equivalent to the current cost of fighting HIV/AIDS in Ethiopia or the whole cost per annum of primary healthcare in Malawi. World Bank advisers, as is well known, have been for some time saying that cutting farm export subsidies would reduce poverty, especially in Africa.
Vested interests no doubt want to retain subsidies and are well organised. Next year, and 2007, will, however, bring real opportunities for reform, because both European Union and United States current policies expire, for example, for sugar, but also for other commodities. There has in the past been a tendency to say, "We can't stop our subsidies until the others do". The chance for all to stop is now coming and should be strongly supported by the World Trade Organisation, OECD and the G8. The EU and the US should act as partners and not as rivals in this.
I conclude by asking the Government this question: will they make full use of their approaching chairmanship both of the EU and the G8 to end the current system of export subsidies?
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Lord Brett: My Lords, I echo the appreciation expressed by others to my noble friend Lady Whitaker for giving us the opportunity to debate this subject. I shall try to rise to the challenge issued by the noble Lord, Lord Selsdon, and not repeat what others have said, although I doubt whether I can match his eloquence in speaking for five minutes without notes.
I declare an interest as the director of the International Labour Organisation for the United Kingdom and Republic of Ireland. However, it is not that bureaucratic experience that I want to bring to this debate but rather the experience of the previous 10 years when I served as a worker group chairman on the governing body of the ILO and travelled extensively in the developing world. That experience will result in my not repeating what others have said. In fact, I do not have to repeat their comments as I agreed with almost everything that they said. However, I am not quite sure I support the eradication of the goat for fear that as we speak a campaign is being launched to save the goat. That debate can wait another day.
I turn to a point raised by my noble friend Lady Jay concerning DfID's policy on institution building. One institution that I believe is vital in the developing world is the trade union movement. I am sure that my noble friend Lord Jordan will speak with greater eloquence and knowledge of the subject than I as he led the World Trade Union Movement for six years and travelled even more extensively in the developing world than I did.
The role of trade unions in the developing world is not limited to the workplace, as we might consider that it is in some parts of the United Kingdom. In the developing world trade unions are an essential element in the democratic process. It is not coincidental that in Poland in 1989 the opposition to communism was led by a trade union, Solidarnosc. It is not a coincidence that the aspiring presidential candidate in Zimbabwe, a good friend of the noble Lord, Lord Jordan, and I, Morgan Tsvangirai, and the parliamentary leader of the MDC in that Parliament, Gibson Sibanda, are the former president and secretary-general respectively of the Zimbabwe Congress of Trade Unions. Trade unions play an essential role in promoting democracy.
Trade unions also play a role in fighting the terrible pandemic of HIV/AIDS. Trade unions in the workplace in South Africa were key to achieving an understanding of the need to prevent the spread of that terrible disease. Child labour and gender equality are also issues in which the trade union movement has a crucial part to play. But, alas, the trade union movement is being weakened by two factors. First, the move to privatisation and "leaner" government services at both a local and national level is resulting in public servants who are trade unionists becoming unemployed. Therefore, the trade unions to which those people belonged no longer have the funds that they need to carry on the work that they are trying to do; for example, work with street children in Brazil and with workers in informal employment in India.
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Secondly, the other social funding provided by trade unions in the wealthier northern hemisphere is also drying up because those unions are contracting in resource terms and do not have the necessary funds to continue that funding. Will the Minister consider specifically the role of trade unions in the institution building element of DfID? Excellent arrangements and systems to tackle these problems are in place in the United Kingdom within the trade union movement, the TUC and DfID. I refer to the Civil Society challenge funds, the Development Awareness Fund and the excellent document on labour standards and poverty eradication produced by DfID. DfID quite rightly dispenses the vast majority of its ODA at the country level. However, I am not sure at the country level that every DfID office and the staff within it fully understand the role of trade unions in this wider context. Will the Minister take that on board?
In every DfID office part of the funding is exclusive and can be spent only on HIV/AIDS. Is it possible to consider allocating a part of funding to increase the capacity of trade unions to do their job and in particular to reach out beyond the formal sector into the informal sector? Trade unions can play a crucial part in building not only democracy but also some of those things that we rightly demand of developing countries; namely, better governance and anti-corruption. In a whole series of areas the trade union movement may constitute the only spokesperson. I refer to health and safety and the incident in Bhopal. The people who suffered most lived near that plant, which suffered from bad management.
I do not think that we in this country, which benefits from a strong civil society, understand that in some developing countries the trade union movement constitutes the only real opposition to dictatorships. For example, Swaziland is a feudal kingdom. It has no democracy and parliamentary parties have been outlawed since 1974. A 30-year state of emergency has occurred. Unfortunately, the Foreign Office has announced that our High Commission in Swaziland is to close. I know from personal experience that the presence of successive High Commissioners has been essential to protect the lives of trade unionists who are the only democratic party, in a sense, allowed to operate in that country. I hope that the importance of trade unions in that regard is not forgotten. It will not be forgotten by my noble friend the Minister but I hope that DfID will give that matter closer attention. If it is, unions could form an inexpensive but central part of the fight to eradicate poverty.
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