CAP Reform Jun03

Last week, Europe's agriculture ministers met in Thessaloniki, Greece, to finalise reform of the Common Agricultural Policy. While I welcome the agreement as a positive step to overhauling the controversial system of European subsidy payment to farmers, it is a huge disappointment that governments caved in to pressure from the French and allowed them major concessions over the reform.

 

The current CAP gives Europe's farmers subsidies of 31bn a year, almost half the entire budget of the EU. This system will become unsustainable when the 10, mainly poor, rural countries join the EU next year unless drastic reforms can be implemented.

 

Under the new agreement, farm subsidies will be "de-coupled" so that farmers will receive a single payment, rather than receiving a sum in line with the amount of food produced. The existing system of payments has encouraged overproduction and caused a gross distortion in world markets. Sadly, instead of making de-coupling compulsory in each member state, last week's negotiations provided individual countries with a get-out clause, allowing them to continue with the old system if there is a risk that the new system would lead to the farm land being abandoned.

 

In doing so, the French have made a mockery of, and severely, weakened the proposed reforms, ensuring that the old principles of the Common Agricultural Policy will remain in place. Member States have also allowed the start date of reform to be delayed from 2005 to 2007.

 

By allowing France to opt out of de-coupling, the EU has missed the opportunity to end the costly, bureaucratic system of subsidies which has led to the over-production of certain goods for profit. In a free market economy, it is crucial that farmers are left to grow what the customer wants, not what pays the biggest subsidy. The new reforms will neither save the British taxpayer a single penny nor benefit the consumer who currently pays some of the highest food prices in the world.

 

Furthermore, the concessions to the French will mean European agriculture will continue to create vast food surpluses that will be dumped on poor countries. Europe has missed its chance to lead the world in encouraging fair trade and protecting poor farmers in developing countries. This will severely handicap the EU's negotiating hand at the next World Trade Organisation talks in September.

 

The British Government must implement the de-coupled payment system. This is the only way to end the bureaucratic nightmare for West Suffolk farmers of form-filling and red tape, and encourage them to get closer to the market place.