GENEVA, Oct 10: Efforts by institutions such as the World Bank to tackle poverty are irrelevant unless wealthy countries cut farm subsidies, World Bank president James Wolfensohn warned on Thursday.

Wolfensohn’s remarks came as he met the director-general of the World Trade Organization (WTO), Supachai Panitchpakdi, and both mounted a united front to press mainly western countries to liberalize agricultural markets.

The World Bank head cautioned that the $50 billion spent on development assistance annually worldwide were dwarfed by the $350 billion ploughed into agricultural subsidies every year.

“To have seven times the amount of overseas development assistance paid annually in agricultural subsidies, which is the product in which the developing world could be significantly competitive, makes no sense at all,” he told reporters.

“There is no way that we can deal with the question of development without dealing with the question of trade,” Wolfensohn added.

Wolfensohn emphasised that he and the WTO head shared the view that there had been limited progress in the first year of negotiations on the Doha development round of trade talks.

“Free trade and reduction of agricultural subsidies has not at all been addressed,” he said.

The 144 members of the Geneva-based WTO have so far been unable to come up with any agreement on cuts to domestic support for farmers in their talks on the issue, which is widely recognized as key to the overall three-year Doha round of trade liberalization talks.

Wolfensohn admitted that the World Bank’s member states often ignored his advice, “but it makes me feel better to indicate that what I’m doing is irrelevant if we can’t deal with the question of trade”.

Panitchpakdi welcomed Wolfensohn’s help on the agricultural issue after the meeting.

“We need more concrete proposals coming from advanced countries so we can make headway into reaching our modality agreement by March 2003, and as you know I have been emphasising this as a life or death matter,” he said.

The World Bank and WTO chiefs agreed to produce a joint report within the next few months on development issues.

Wolfensohn also pledged to help developing countries build up their capacity to use the WTO system to the same extent as trading giants, while noting that the budget Supachai was granted to provide capacity-building was “ludicrous”.

The World Bank head also backed attempts by Brazil to mount a separate challenge in the WTO against the agricultural policies of the world two largest trading powers, by filing a formal complaint about subsidies to US cotton farmers and European Union sugar producers.

“I think any attack by any country on subsidies is a good thing,” Wolfensohn said.

He insisted that strong farm lobbies in western countries would be won over once they were convinced that the need to tackle poverty in developing countries was in their own self-interest in the long-term.—AFP