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The US will on Monday offer to end farm export subsidies in five years and slash its domestic subsidies by more than half, in an attempt to revive the flagging Doha round of trade talks.

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But [subsidies have] grown into an institutionalised nightmare preventing developing countries from fulfilling their potential in one of the few areas where they enjoy a natural advantage - agriculture. Europe and the US are the main culprits. It is economic and social madness for Europe to be growing, for instance, subsidised sugar beet when its average cost of production is more than double that of efficient exporters such as Brazil and Zambia. It is only possible thanks to ludicrous subsidies, including protective tariffs of up to 140%. As Kevin Watkins of Oxfam says: "The $1.6bn a year the EU gives to the sugar barons of East Anglia and the Paris Basin generates surpluses that deprive countries such as Thailand and Malawi of markets. Mozambique loses almost as much as a result of EU sugar policy as it gets in European aid."

The US is no better. America's 25,000 cotton farmers received more than $3bn in subsidies last year, equivalent to 100% of the market value of cotton output. This works out at a staggering subsidy of $230 an acre. West Africa, one of the mostdeprived places on earth, happens to be one of the most efficient cotton producers, with an estimated 11 million people dependent on cotton as their main source of income. But it can't compete with subsidised products from the US, which has 40% of world exports. If subsidies were removed, West Africa, according to IMF figures, could produce profitably at two thirds of US production costs.

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EU Trade Commissioner Peter Mandelson has blamed the US for the collapse of the latest round of global trade talks.
US conditions attached to cutting farming subsidies were "unacceptable" for developing countries, he said.

But the US said it was "fully committed" to the talks and blamed Europe for its lack of ambition over reaching a deal to cut farming tariffs.

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EU Commissioner Mandelson said he was "profoundly disappointed" that talks had stumbled, mainly as a result of America's inflexibility.

"What they're saying is that for every dollar that they strip out of their trade-distorting farm subsidies they want to be given a dollar's worth of market access in developing country markets," he said.

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