Brussels, 02/05/2002 (Agence Europe) - On the fringe of the informal Agriculture Council meeting in Murcia, Commissioner Franz Fischler declared that the agreement negotiated last Friday by the relevant members of the Senate and the US House of Representatives on reform of agricultural policy (the Farm Bill) is a "step backwards". Mr Fischler said the Farm Bill would have the effect of "creating more market distortion". He said it "contains elements that are nothing more than hidden export subsidies that will create serious difficulties for the developing countries".
The Commissioner explained that the United States seems to have turned right round to go in a direction that is directly opposite to the reforms promised in Doha. "The proposed legislation is a blow to the credibility of American policy at the WTO, a body before which the US presented a programme, on trade, that the new bill totally contradicts", he said, adding that: "it is impossible to negotiate with a partner that sticks to the principle 'do what I say, not what I do'". Mr Fischler said he was "dumbfounded" by some of the Congress' allegations whereby these subsidies to support prices would not be taken into account in the context of the commitments taken by the United States. "The United States ought to respect the WTO rules", he warned. While American policy seems to be returning to measures that have an influence on prices and which distort production, Mr Fischler stressed the extent to which this evolution contrasts to that of the EU's agricultural policy, which has chosen the following direction: reduce aid that distorts production, place emphasis on food quality and security, and promote rural development and the quality of the environment.
Mr Fischler believes the most controversial point is not only the cost of measures proposed (EUR 111 billion over six years to support one million American farmers), but above all the risk of seeing this policy cause distortion worldwide with regards competition and markets. The increase of subsidies intended to support prices (compensatory payments and new "anticyclical" policy) will have the effect of boosting production and also bringing prices down, recalled Mr Fischler, who specified that: - the farmers, who disregarded the signals sent by the market, will use land that has only marginal production possibilities, to the sole end of bringing in subsidies; - the anticyclical programmes (which are like disguised export subsidies) are particularly pernicious as they weigh on domestic prices, as a barrier to imports.