Brussels, 25/06/2012 (Agence Europe) - Momagri's Global Support to Agricultural Production (SGPA) indicator revealed a little known truth on Monday 25 June: support for agriculture in the United States is much greater than the figures usually given and very significantly higher than that granted by the EU and its member states (as announced in EUROPE 10640).
In the United States, over $172 billion were granted in 2010, compared with €76 billion in the EU; this equates to €422 per capita in the U.S. against €151 per capita in the EU, almost three times more - more exactly 2.8 times more. This observation runs counter to the usual stereotype, that European farmers are the most heavily assisted. Indeed, since 2008, the gap has continued to widen.
On the other side of the Atlantic, policies aim to stimulate and secure agricultural output, from farmers to consumers, in a counter-cyclical manner, that is, taking market conditions into account, momagri says in a press release. One other specific feature is domestic food aid (54% of SGPA in 2010). This is generally considered as a social subsidy but, in fact, represents an active subsidy to the American agricultural and agri-food sector, assessed at more than $94 billion. The ongoing reform - the Agriculture Reform, Food and Jobs Act of 2012 - is considering changing income protection mechanisms, but is maintaining the strength of an arsenal of subsidies.
In the EU, farm support mostly includes direct subsidies for farmers' living standards (64% of SGPA in 2010), especially incorporating the Single Payment Schemes (SPSs), which account for 47% of all farm support paid in 2010. The support rationale is geared to farmers, but is decoupled from production and market prices. “The European policy thus does not have the tools to react efficiently to price instability”, says momagri. The post-2013 CAP reform proposed by the European Commission will only make matters worse, “without meeting the challenges of European farmers”, momagri argues.
In the light of this study, momagri calls on European leaders to build into the new CAP genuine regulatory mechanisms that stabilise prices and agricultural incomes, while introducing more efficiency in EU spending.
If it does not, the EU will have to accept increased food dependence and all its social, financial and political consequences. The process has already begun, since the European Union has already “doubled imports during the past decade, and seems to import the equivalent of the production of 87 million acres of farmland, i.e. the size of Germany”, momagri states.
Momagri will shortly publish the results of its SGPA indicator for Brazil, China and Russia. (LC/transl.rt)