The European Union and the United States have harmed agricultural producers in the Third World by using illegal subsidies, according to aid agency Oxfam.

The agency yesterday alleged that the EU and US had spent $13 billion (€11 billion) in subsidies on the agricultural produce of domestic farmers that breached World Trade Organisation (WTO) agreements.

Oxfam said the subsidies were causing suffering in 38 of the world's developing countries.

"Oxfam has also shown that the vast bulk of EU and US subsidies go to their biggest producers and largely bypass their smaller farmers, rural development and agricultural protection," the agency said.

An Oxfam spokesman said such subsidies had been made illegal by the WTO in an effort to assist developing countries.

"Oxfam is not against all subsidies, but we've always said that the worst of them lead to dumping. We now know that many of these harmful subsidies are not only unfair but also illegal under WTO rules," said Phil Bloomer, head of Oxfam's "Make Trade Fair" campaign.

The agency said the US had paid $25 billion (€21.2 billion) to its corn farmers in the past five years, without which exports to developing countries would not have been viable.

It also criticised the EU for subsidising tomato production. "The EU pays €300 million a year to tomato processors, representing 65 per cent of the value of the entire crop. Growers in South Africa, Chile and Tunisia are among those losing out."