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Agricultural Farm Subsidies
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| occrider |
What's the first thing that pops into your mind when you read of massive farming subsidies that cheapens the cost of food exports to 3rd world countries which put local farmers out of business?
Well if you thought like me, you would probably say the US. Probably because much of the talk in this forum about farm subsidies has focused on the US. So when I read a rather enlightening article in the economist about farming subsidies across the world and who is actually in support of it. Low and behold, to my surprise, I was shocked to see who really gave the most amount of money to their farmers:
Then I read on to discover that the real holdup in the WTO discussions with respects to abolishing farming subsidies has been the EU (and particularly the French) who have been constantly delaying talks and actions to reduce said farming subsidies.
Talk about the teapot calling the kettle black!
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THE French don’t like change. For weeks now, nationwide strikes have regularly caused chaos in the country’s transport system and schools, as public-sector workers demonstrate their opposition to planned reforms of the country’s pensions system. But such protests are a pale shadow of the havoc that French farmers are prepared to wreak when they see their livelihoods threatened. France’s politicians—from all parties—are notoriously reluctant to challenge the country’s deeply held attachment to the land, even when that translates into massive agricultural subsidies. Could this be about to change?
The European Union’s agriculture ministers, with the backing of their heads of state, gathered in Luxembourg on Wednesday for a three-day meeting to try to thrash out a reform of the enormously expensive common agricultural policy (CAP), which costs EU taxpayers a staggering euro45 billion ($53 billion) a year, about half of the EU’s entire budget, and causes untold losses to farmers in poorer countries, who struggle to compete against their heavily subsidised European rivals. With ten new members joining the EU next year, reform of the CAP is imperative. Change is also the key to a breakthrough in the Doha round of world trade talks. These are currently deadlocked in several areas: but agriculture is by far the most important. Without big concessions from the Europeans it is clear the talks will get nowhere. But however urgent the need for reform, the chances of a breakthrough at this week’s farm talks look slim.
The Greek Presidency of the EU posts news on the meeting of EU agriculture ministers. The EU gives information on trade relations and on agriculture issues, including the proposed reforms of the CAP. The WTO publishes an overview of its Doha development agenda, including agriculture.
As is so often the case in European issues, the French hold the key. Across Europe there is broad support for reform. The British, along with the Nordic countries and others, have long been arguing for change. Germany’s chancellor, Gerhard Schröder, is also fully seized of the need to cut the cost of the CAP and seems ready to take a tougher line than some of his predecessors. The European Commission itself is at the forefront of the campaign for reform. The proposals being discussed in Luxembourg were put forward nearly a year ago by Franz Fischler, the EU’s agriculture commissioner.
Mr Fischler wants farmers, as he has colourfully put it, to farm the land and not subsidies. At the core of his plan is a break in the link between subsidies and agricultural production, to remove the incentive for farmers to produce even when there is little or no demand for what they are growing or raising. Mr Fischler seems optimistic that with a majority of EU members in favour of reform, he will get his way. He has insisted that he will not accept lame compromises. “It is decision time”, he said.
Well, he would say that. But few agreements reached within the EU are anything other than a compromise, and too much is at stake for either the reformers or those clinging hard to the current CAP to give ground easily. The best hope of progress might come from the margins of the Luxembourg meeting: at a summit on June 10th between Mr Schröder and the French president, Jacques Chirac, the two men said they had asked their agriculture ministers to find a formula that would attract the support of EU ministers. The nature of any such deal was left unspecified, but Mr Fischler will nevertheless be anxious to ensure his authority is not undermined, nor his own proposals sidelined.
The agriculture commissioner would have good reason to be suspicious of any Franco-German deal. At a similar meeting last October, Mr Chirac appeared to persuade Mr Schröder to agree to delay any fundamental reform of the CAP until 2006 or later—a deal that, it subsequently emerged, the German leader might not have fully understood. There was certainly an angry reaction from Britain and others at the appearance of a stitch-up, ahead of wider talks.
The latest manoeuvring suggests that even France recognises that reform is inevitable. In a newspaper interview, the French agriculture minister, Hervé Gaymard, insisted that he and his colleagues in Paris do not have closed minds. The French are prepared to fight hard to protect their interests. But Mr Chirac is unlikely to want the blame for the collapse of the Doha round of international free-trade talks currently in progress, under the auspices of the World Trade Organisation.
The Doha talks are stalled in a number of areas: officials meeting in Geneva this week are trying to make headway on investment issues, for instance. And America has consistently blocked plans under the Doha umbrella to make it easier for poor countries to get access to cheap medicines. But agriculture remains the most significant stumbling block; and on this, European intransigence is blamed for the lack of progress.
A framework for negotiations was supposed to have been agreed in March, but that deadline came and went with no sign of movement from the Europeans. America—itself no stranger to over-generous farm subsidies—was furious that the EU did not even put forward a clear statement of its negotiating position.
The next deadline in the world trade talks is a ministerial meeting at the Mexican resort of Cancún in September. This gathering is meant to review progress across the full range of the Doha negotiations. Instead it looks like being a marathon session of hard bargaining, where attempts will be made to break deadlocks on pretty much every aspect of the trade talks. The continuing refusal of the EU to come up with proposals on agriculture that other participants believe could form the basis of sensible negotiations, could create a damaging impasse at Cancún, perhaps casting doubts on the Doha round’s prospects of success.
Ironically, there is a suspicion in some quarters that the French will use the coming Cancún meeting as an excuse to delay a deal in Luxembourg this week—on the somewhat spurious grounds that any agreement now would have to be re-opened at Cancún. Indeed, this may turn out to be the case. But it is no excuse for inaction. If the EU governments fail to demonstrate that they are serious about reining in the excesses of their agricultural regime, the chances of reaching a successful world-trade agreement will be diminished.
http://www.economist.com/agenda/dis...tory_id=1840865
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| Shakka |
| Well Surprise surprise surprise! It's amazing what people can learn when they bother to do some independent research and reading! Thanks Occrider! |
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| marcus82 |
| wow, i work in produce and i always thought the US always provided unfair subsidies. i guess the US doesn't seem so bad after reading that article...poor farmers, they are the one's who get screwed in the end :mad: |
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| trancedfarmer |
| quote: | Originally posted by marcus82
wow, i work in produce and i always thought the US always provided unfair subsidies. i guess the US doesn't seem so bad after reading that article...poor farmers, they are the one's who get screwed in the end :mad: |
yes... WE ING DO!! |
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| occrider |
LOL Rupert, the point of the article was not to deflect blame away from the US with respects to farm subsidies. The point of the article was to establish that although the US is a serious offender, nobody even mentions EU farm subsidies. And it is especially significant since the EU is the largest offender, and is blocking agreements to remove the subsidies in WTO agreements. As such, other western nations must introduce subsidies to remain competitive. And ultimately those countries that cannot match subsidies lose out in the end. |
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| Shakka |
| quote: | Originally posted by occrider
LOL Rupert, the point of the article was not to deflect blame away from the US with respects to farm subsidies. The point of the article was to establish that although the US is a serious offender, nobody even mentions EU farm subsidies. And it is especially significant since the EU is the largest offender, and is blocking agreements to remove the subsidies in WTO agreements. As such, other western nations must introduce subsidies to remain competitive. And ultimately those countries that cannot match subsidies lose out in the end. |
Made me realize that while the U.S. get's plenty of for some of their policies, in the big picture, the U.S. get's more than their fair share of while organizations like the EU get little mention of their egregious policies. Meanwhile, little member countries in the EU criticize the U.S. for such policies while completely (hypocritically) ignoring the fact that their organization is an even worse offender. |
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