Brussels, 16/11/2012 (Agence Europe) - The Monagri think-tank says that over 2005-2010, global support to agricultural production (SGPA) per inhabitant has shot up in China, Brazil and the United States by 130%, 60% and 60% respectively, but have barely risen above their 2005 level in the European Union. Despite the talk about keeping the CAP budget unchanged, this demonstrates that Europe has in fact being doing the opposite since 2005 of what other big world powers are doing - the other powers are investing massively to ensure the food security of their inhabitants, explains Momagri in a press release issued on Monday 19 November. In the past, Momagri issued press releases comparing the EU with the United States alone (see EUROPE 10641).
In absolute terms, the SGPA 2010 indicator puts the United States first with $163 billion, followed by China with $154 billion, the EU with $101 billion and Brazil with $38 billion. As a percentage of farm production, the United States comes first with farm aid of 48%, followed by 24% for the EU and Brazil and 20% for China.
Beyond the figures, comparison of farm policy shows that Brazil and the US use farm aid to support competitiveness and stimulate domestic demand, explains Momagri, with farmers in these so-called free-market countries benefiting from legislation which, in Brazil, gives direct aid for markets; storage; and development of biofuel (42% of Brazilian SGPA); and in the US, contra-cyclical aid along with insurance systems and a wide range of domestic food aid.
The Chinese government takes an interventionist line on securing farm production in the form of guaranteed minimum prices ($258 per tonne for corn and $291 per tonne for rice in 2010), direct income support, social protection programmes and tax incentives.
In the United States, aid for agriculture is intended to secure domestic farm production and generally covers two types of measure - aid for farmers and aid to encourage greater farm production by boosting domestic and international demand (including domestic food aid, 93% of which consists of buying US food products).
Momagri points out that the EU is the only area to separate farm aid from production and to include environmental issues as a foundation of its farm policy. The think tank says the outcome is unequivocal, with the EU reducing farm aid and inappropriate aid leading to an extremely worrying situation, aggravated by the reform of the CAP. If the EU were to continue with its reform of the CAP, says Momagri, this would have a disastrous impact on farming and agri-food industries in Europe. It urges Europe's political leaders to introduce price regulation systems, and therefore income support, rather than increasing the CAP budget, along the lines of contra-cyclical support mechanisms recommended by Momagri in its report “An alternative CAP is possible” (see EUROPE 10600).
The SGPA indicator covers all public aid, both budgetary and non-budgetary, for farming in ten categories ranging from direct farm production aid to strategic support. (LC/transl.fl)