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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: LindyBill who wrote (54521)	10/25/2002 8:38:02 PM
From: Elsewhere	Read Replies (1) \| Respond to of 281500

France and Germany Clinch Landmark Deal to Enlarge E.U. Here's a commentary to appear in tomorrow's Guardian: politics.guardian.co.uk End farming subsidies Europe should take the lead Leader Saturday October 26, 2002 The Guardian There is no stopping the French president, Jacques Chirac. Earlier this week he called for renegotiation of Britain's 1984 budget rebate in a move aimed at deflecting criticism of France as the biggest net gainer from the common agricultural policy (CAP). On Thursday he sidestepped the EU's own negotiations - and Tony Blair - to agree a bilateral deal with Germany to put a ceiling on EU agricultural spending after 2007. But France is unlikely to agree to fundamental reforms that undermine its own position as beneficiary-in-chief of the CAP. For that reason alone, the new deal should be resisted. It may also stymie the EU's own Fischler proposals which, while not going nearly far enough, at least decouple subsidies from production, introduce environmental elements and cap the booty going to large farmers. The prospect of 10 new, agriculturally challenged, countries joining the EU offers a rare opportunity for root and branch reforms of a policy that has long outlived its usefulness. The CAP brilliantly turned the postwar food shortages into a surplus. But member countries got hooked on their subsidies and, like other addicts, will not be weaned off. The candidate nations, naturally, want their share of the subsidies so they do not face unfair competition within the trade barriers of the CAP. The EU's stingy answer is to phase in payments over 10 years, starting at 25% of current levels. There is another way to help: phase subsidies out completely, except where needed for environmental reasons or for sustaining the countryside. Economically, this is a free lunch since practically everyone gains. The consumer benefits from lower prices, since the CAP is reckoned to add up to 20% to food prices; governments gain from not having to pay so many subsidies (£30bn in the case of the EU budget); and, above all, developing countries gain from gaining access to markets from which they are cut off. It is immoral and uneconomic that rich countries subsidise their farmers to produce food that could be grown more cheaply by developing countries. Getting rid of subsidies is the biggest single thing that we could do for the third world. Farmers would lose out, but to no greater extent than have other industries - from coal to steel - as they have been forced to adjust to globalised realities. Efficient farmers will flourish in a competitive environment and the more enlightened know it already. Many of the others will find a new role in using (diminished) subsidies to preserve the rural way of life. Cutting agricultural subsidies is now one of the few policy areas that unites rightwing campaigners for market forces with leftwing lobbies for a fair deal for the world's poorest countries. Reform will not be easy at a time when President Bush, who promised cuts in agricultural subsidies, is instead raising them by 80% over 10 years. But reform has to start somewhere. Tony Blair could make a start by taking up President Chirac's challenge. He should offer to give up Britain's CAP rebate in exchange for comparable concessions on the other side of the Channel, as part of a radical reform programme that will eliminate the problem over a set period of years. It is absurd that agricultural subsidies have swallowed up nearly half of the entire EU budget in recent years. This money could have been returned to consumers or used to boost other industries - maybe through a common technology policy - to help Europe catch up with the US. The trouble, is the inability of EU nations to wind the CAP down once it had done its job has soured the atmosphere for a similar experiment with other industries.