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Home / Business / Economy

<i>Neville Martin:</i> Subsidies hidden arm of poverty

By Neville Martin
NZ Herald·
2 Feb, 2009 03:00 PM2 mins to read

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Opinion

KEY POINTS:

Just when we might have hoped Northern Hemisphere governments were overcoming their addiction to trade subsidies, we find the EC spooked by the global financial crisis and sticking the needle back into the arm.

This is realpolitik. National self-interest gets precedence over principle. Fine words about giving the
Third World a chance to lift itself out of grinding poverty are conveniently forgotten. Progress towards trade liberalisation comes under threat - yet again. The Government and those who speak for it, must respond in measured, diplomatic terms. The rest of us should be furious.

For the best part of the past 50 years, this country has been under siege from the protectionism of Northern Hemisphere governments. As a consequence, we have been denied the opportunity to maximise the potential of our agricultural export industries. We bewail our slide down the OECD's ladder of affluence. Sure, that fall has been in part because we've stumbled here and there. But we should not lose sight of the fact that there has also been a good deal of pushing going on.

The long and short of it is that agricultural protectionism of one sort or another has cost this country dearly.

By any measure, huge damage has been done to our economy over the years. But terms such as "economic damage" are euphemistic. They sugar coat the unpalatable.

The plain fact is that there is real hurt to real people which can be ascribed - indirectly but inescapably - to trade protectionism. If what we can earn as an export-based economy is restricted by subsidies applied elsewhere, we can spend less on our health system, on education, safer roads, decent housing and so on.

Not for a moment should it be suggested that those devising and implementing obstructionist trade policies consciously seek the negative outcomes concomitant with these practices. Their view is inward. Their ultimate goal is votes. The damage, however, is done, unintended or not.

When a child is killed in the Middle East, the relationship between a political decision and its consequence is clear enough. But when a child living in a garage dies of meningitis - a disease of over-crowding and poverty - the finger is pointed at "the health authorities" or "the welfare" or "the housing shortage". It might well be pointed elsewhere.

Neville Martin is a writer and dairy industry commentator.

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