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EU Commission proposes seemingly generous reduction of agricultural subsidies
Malaria
02/2003
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Promising move or just rhetoric?
EU Commission proposes seemingly generous reduction of agricultural subsidies
Just before Christmas, the European Union (EU) tabled what looked like a generous offer for farm talks in the World Trade Organization (WTO). The EU Commission's proposal: a 45 percent reduction in export subsidies for farmers and a 55 percent cut in trade-distorting internal support measures. "The industrialised nations must all make a move", said EU Farm Commissioner Franz Fischler when the proposals were presented on 16 December. "Unlike others, our proposals are not tactical. What the developing countries need are real advantages, not rhetoric".
While Germany's Agriculture and Consumer Protection Minister Renate Künast welcomed the proposals as "an offer with promise for the developing world", NGOs and the churches see them as what Fischler claims they aren't: tactics and rhetoric. Rudolf Buntzel-Cano, for instance, an agricultural expert at the Gemeinsame Konferenz Kirche und Entwicklung (GKKE), an ecumenical working group focusing on North-South issues, points out that the reference point for the offered cuts in subsidies is much higher than the level of subsidies actually paid to European farmers in recent years. The EU offer, Buntzel-Cano says, is based on the EU farm subsidies that were declared trade-distorting back in the late 1980s. Most of those subsidies were long ago transformed into benefits which are accepted as WTO-compatible and thus not an issue in the agricultural trade talks. So, according to Buntzel-Cano, the EU's "offer" to reduce trade-distorting internal subsidies by 55 percent is calculated in such a way that the 28 billion euros actually distributed at present would only need to be reduced by around 11 percent to just under 25 billion euros. And as for the export subsidies, the 45 percent "reduction" on offer actually means it would be possible for the 2.8 billion euros currently paid to Europe's farmers to be increased to 3.7 billion euros.
Finally, the EU offer needs to be seen as part of the reform of EU agricultural policy spearheaded by Farm Commissioner Franz Fischler. Under the so-called "Fischler Plan", subsidies for European farmers will no longer be linked to production, crop hectarage and herd or flock size; instead they will hinge on adherence to environmental, animal treatment and food safety standards. The current proposal for the WTO talks categorically states that measures designed to serve such purposes are not trade-distorting and must not be impeded by the WTO. In principle, Buntzel-Cano has no objections to the EU trying to help its farmers meet high ecological standards and act as good countryside stewards. What he finds questionable about decades of EU practice and the Fischler Plan today is that they both simply re-define subsidies which are acknowledged as distorting trade and insist that the re-defined support has no trade-distorting impact. Buntzel-Cano finds that the developing countries have a point when they say all forms of help for farmers in the industrialised world should be checked to see how they impact on competition. "If the EU had proposed that," Buntzel-Cano says, "it would have made a real offer to the developing countries". (ell)
Net resources: agricultural trade www.germanwatch.org/tw/agrar.htm
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