The Director General of the World Trade Organization, Ngozi Okonjo-Iweala, has warned that agricultural subsidies worldwide are a ticking time bomb that could reach a trillion dollars by 2030 if action is not taken to curb their growth.
Speaking at a discussion hosted by the Institute of Economic Affairs on the theme “Making Globalization Work for Africa yesterday, the former Nigerian finance minister stated that current estimates place the total cost of global agricultural subsidies at between 500 and 800 billion dollars, a staggering figure that she believes will only continue to rise unless something is done.
According to Okonjo-Iweala, the bulk of these subsidies are found in developed countries and emerging markets, creating an unfair advantage for those who can afford them.
The Director General urged WTO members to work together to address this issue, arguing that it was not just a matter of fairness, but also of economic efficiency.
She called for a reduction in subsidies and the adoption of policies that would promote free and fair trade in agricultural products.
“Agricultural subsidies now are calculated to be anywhere between 500 and 800 billion dollars. That is huge and if we do not do anything about it, we will reach a trillion dollars by 2020. Most of these subsidies are in developed countries and emerging markets.”
“Because we do not have the money to subsidize it means that those who have can have an unfair complexity bench with respect to the agricultural products.”