Appeal: Africa's farmers condemned by the 'Great EU Sugar Scam'

From early morning, the frail-looking women assemble at the collection of dilapidated buildings they call their town. They will spend the day selling items ranging from rag-tag, second-hand clothes to broken furniture, old cutlery and wild fruits.

Their customers are the "aristocrats" lucky enough to have jobs at the nearby Acucareira de Xinavane sugar factory.

Just before midday, Felismina Cossi, 35, is still there with a huge bowl of fish in the sapping humidity and 39C heat. Her husband had walked 25 miles overnight from where he caught the fish.

Mrs Cossi has had a bad day. She has not sold anything. Soon the fish will rot because of the temperature and she will have to throw them away. On her best days, she raises 23,000 meticas (60p) to buy food for her five children. On her worst days, she sells nothing.

And yet, like the other women, she is oblivious to the chief cause of her desperation and suffering – European and American farm subsidies, which are destroying agriculture in poor countries.

Their families own fertile land in a rich, sugar-producing area. They could be happy cane producers on a small to medium scale. Paul de Villiers, who runs the Acucareira sugar factory, would be willing to fund them to buy the necessary equipment to produce sugar to sell to him.

But his company, one of four big sugar producers in Mozambique, can't implement this plan because European Union and American farm subsidies have deprived Mozambique of a market for their product.

Oxfam, in a recent report, called these subsidises "the Great EU Sugar Scam". Some locals see them as a heartless ploy to preserve white privilege. Rodrigues Paulo, 34, is a teacher who supplements his £21 monthly wage by selling mangoes. His family owns large tracts of land and he knows he could do better as a sugar producer than as a poorly paid teacher. But he also knows the Europeans have shut the doors to him.

"They want to create a dependency syndrome by giving us a little aid instead of opening their markets so we can trade as equals," he complains. "If we were allowed to do that it would be easy to organise the people into co-operatives and provide them with the means to farm to alleviate poverty. But the world trade system won't allow it."

Instead, all but 2,000 of the 23,000 inhabitants have no work. And because they pay no taxes the local area cannot afford clean water or a sewerage system. Signs of grinding poverty are everywhere.

Mr de Villiers' company could easily double its annual production of 60,000 tons of sugar and create more jobs, he explains. It cannot because the EU has imposed a quota that restricts its imports from Mozambique to a mere 8,000 tons a year. Mozambique – which is rebuilding its sugar industry after a devastating, 17-year civil war and the destructive floods of three years ago – could easily export up to 300,000 tons.

The irony is that it produces sugar at a competitive rate. Its costs are low and the climate is favourable. But its farmers cannot compete against their heavily subsidised rivals. While the Mozambican farmer can spend €245 (£160) to produce a ton of white processed sugar, his European counterpart gets €700 for the same. And although the EU has promised an annual increase of 15 per cent to the import quota, this is too little to havean impact.

Oxfam insists that no other agricultural industry is in greater need of urgent reform. Yet sugar is not included in the EU's latest reform proposals. Oxfam wants the EU to abandon subsidies to farmers, to halt its dumping of exports to markets in North Africa and Asia and leave these to countries such as Mozambique, one of the 10 poorest in the world.

"European consumers and taxpayers are paying to destroy livelihoods in some of the world's poorest countries," argues Oxfam. "Nothing more powerfully demonstrates the insanity, or the blatant hypocrisy of Europe in its dealing with developing countries."