28 May 2009

Cairns Group tells US, EU to back down on subsidies

3:15 pm on 28 May 2009

Nineteen countries committed to open trade in farm goods are urging the United States and the European Union to rescind expert subsidies for agriculture.

The Cairns Group, which includes Canada, Brazil and Australia as well as New Zealand, says subsidies drive prices lower, delaying economic recovery.

The statement comes after the United States retaliated against an EU decision to reintroduce export refunds for a number of agricultural products.

The Cairns Group says the US and EU must show better leadership, particularly during a global financial and economic crisis.

It says subsidy wars punish farmers trying to compete without subsidies, and particularly damage unsubsidised farmers in developing countries, jeopardising their exports and food security.

The Cairns Group statement is strongly endorsed by New Zealand's Minister of Trade, Tim Groser.

Mr Groser says export subsidies are so unjust they were banned more than 60 years ago but an exception was made for agriculture.