Brazil, India and China Turn Up the Heat on Subsidies

The prospects for a showdown between rich and poor countries at next month's trade summit increased yesterday after the world's three biggest developing countries demanded deep cuts in the west's subsidies for its farmers.

Hopes that a deal between Washington and Brussels offering only modest cuts in agricultural protection would be rubber-stamped at the talks in Cancun, Mexico, faded after Brazil, India and China issued a joint proposal calling for far more radical reform.

The three countries, which account for two thirds of the world's farmers, proposed an end to the export subsidies that allow excess produce in the west to be dumped on world markets and for significant cuts in state payouts to farmers.

With less than a month to go before the gathering of 146 trade ministers at the meeting of the World Trade Organisation, the initiative was aimed at rallying opposition to the European Union and United States plan announced earlier this month.

Agriculture is seen as the main stumbling block to a new round of global trade liberalisation, and last week Brussels and Washington sought to end months of haggling by focusing attention on key issues. The plan was criticised by food exporting countries and by poorer states for not doing enough to reduce the $300bn a year developed countries spend on aiding their farmers.

Brazil, India and China, backed by 12 other developing nations, are urging far more stringent cuts in domestic support programmes than those offered by the EU and the US, the biggest users of subsidies.

They also said rich states should commit themselves to eliminate export subsidies, with special consideration being given to products of concern to developing countries. On import tariffs, the third key area of the talks, developing countries sought to place the biggest responsibility for cuts on the rich, with poorer states being able to reduce less and more slowly.

Celine Charveriat, of Oxfam International, said: "It is high time the farm subsidy superpowers got serious about reforming their destructive agricultural policies."