The time to revise the EU's Common Agricultural Policy (CAP) is approaching. In December 2005, the European Council instructed the European Commission to undertake a full and complete review of all aspects of EU expenditure, including the CAP, and to report back in 2008-2009. So the review is for next year or the following year at the latest. For some time now, the European Commission's plans to change the organisation and cost structures of some farm markets (fruit and vegetables, wine and sugar) have been giving an idea of the direction the Commission is moving in for the 'full and complete review' (not always very reassuring). This is one of the big issues that the EU will be addressing before the new European Treaty comes into force (see my column yesterday). For November, the European Commission has announced the publication of an initial overall document and the Portuguese presidency is planning to hold a debate on 26 November at the Agriculture Council on the health of the CAP. The debate will last for a year under the Slovenian presidency and then the French presidency.
The true priorities. In this connection, several signs indicate that international debate is finally moving in the right direction. There are exceptions, but some bodies seem to understand that the importance and significance of farming cannot only be assessed in terms of a single criterion, namely the opening of markets and price and cost competition. This criterion should not be neglected but farming has many other priority tasks like fighting famine and malnutrition in the world, protecting the natural environment, protecting the security and quality of products, recognising the importance of a high degree of food autonomy for every country or group of countries, preserving biodiversity and animal welfare.
What positive signs are there that give the impression that greater awareness of these other priorities is growing at international level? A few examples:
A joint statement by farm organisations representing more than 165 farmers around the world (all five continents). This is an unprecedented grouping of many organisations with diverse origins - several African countries, Canada, three countries in Latin and Central America (including Mexico), various countries in Asia (including India and Japan) and virtually all European farm organisations. The document was resumed in our newsletter on 6 June (issue 9447) but merits further discussion. It explains the views of farmers from highly developed countries (in the EU, Canada, Japan, Switzerland, Norway and South Korea) and poor countries (the Congo, Kenya, Tanzania, Benin, Ivory Coast, Mali, Senegal, Bolivia, Nicaragua, Sri Lanka and the Indian 'National Cooperation Union').
The content of the statement is both an accusation and a manifesto, roundly criticising the way the World Trade Organisation (WTO) farm talks are being run (the Doha Round) and setting out the principles that ought to inspire the global farm policy.
The group of organisations notes that the current Doha Round negotiations on agriculture 'are being dominated by the interests of a few large agricultural exporters. The special role which agriculture plays - providing food security to local populations, maintaining viable rural communities and looking after the world's precious land resources - is being totally ignored… The vital need for developing countries to be able to build up their agricultural base, in order to ensure food security and the livelihood of their rural population, is being totally ignored. Furthermore, negotiators should remember that the Doha Round is a 'development round', not a 'market access round'.'
The document argues that 'even the Chair of the agricultural negotiations, Mr Crawford Falconer, makes virtually no mention of non-trade concerns in the papers he has just published on how he sees the way forward in the negotiations. Instead he focuses on the interests of the food exporting countries such as the Cairns Group, the US and G20… If Falconer's proposals were to go forward, agricultural production in many areas of the world would be at risk. This in turn would have severe consequences for half of the world's population which lives in rural areas, most of them in the poorer developing countries. And faced with the competition from large-scale farming and multinational traders, how could farmers ensure sustainable production and care for the land in a way which ensures environmental protection…? It would be a nonsense to establish trade rules which undermine agriculture's vital wider role.' I concentrated on Crawford Falconer's plans in issue 8423 (a good man, no doubt, but he has failed to understand the non-trade issues connected with farming). His plans were then dropped in Geneva and are no longer under discussion.
The second aspect of the farm statement sets out four principles for a farm and food policy that meets humanity's needs: 1) 'all WTO members must have the right to ensure food security by maintaining adequate domestic production'; 2) 'all WTO members must have the right to meet the non-trade concerns of their citizens including concerns about food security, food safety, the environment, rural communities and animal welfare'; 3) 'special and differential treatment for developing countries must be taken fully into consideration to meet the real needs of resource-poor, vulnerable and small-scale farmers and ensure food sovereignty'; 4) 'there must be reinforced rules to protect geographical indications'.
The above points are nothing new for readers of my column. But what is new is the fact that these are no longer simply my comments but the views of millions of farmers from all five continents on earth.
B. Japan, Switzerland and South Korea have risen to the challenge. In a joint statement, these three countries, big farm importers with little farming of their own, stressed the demand to be able to keep high import tariffs for some products in order to protect farming that is vital for ecological, social and historical reasons. These are the official views of governments in the Doha Round, not of farm organisations.
C. Pascal Lamy's recent statements. WTO Director General Pascal Lamy is logically continuing to lead a talented and firm fight for the success of the Doha Round, coming up with perfectly valid arguments. In a statement made on Monday, however, he stressed the 'modest' nature of the work that remains to be done to ensure success, arguing that 'small concessions' would be enough to strike agreement. What is being demanded of the United States in budget terms (cutting subsidies) amounts to less than the value of a week of transatlantic trade. The EU and Japan have to grant a 'handful' of further reductions of their highest farm tariffs. Brazil and India should make similar efforts on industrial customs duties. Lamy says this does not amount to much compared with what has already been agreed on expanding and simplifying global trade overall (which would be lost in the event of failure of the entire Doha Round, see issue 9460).
Pascal Lamy's statements seem to me to give significant backing to the idea that last minute demands should be kept within reasonable proportions on three controversial issues - cutting US farm subsidies, cutting the import duties of the EU, Japan and a few other countries, and opening up Brazilian and Indian markets for industrial goods and services. The countries in question do not want to accept what is being demanded of them on any of these three issues. Their governments should take account of the general interests rather than the interests of some pressure groups in order to save the huge gains that have already been won.
Apparently several other WTO countries already agree on this call to reason (also taking account of the Chinese giant - which would be the great beneficiary). Unfortunately, the rhetorical, rabble-rousing statements of UN Secretary General Ban Ki-Moon do not go in this direction - neither do the statements by the President of Brazil. If these are negotiating tactics, they are clumsy but will not prevent final agreement. If Brazil and other countries refuse to give way, well too bad, there won't be a deal.
D. Lower production means risk of shortages. The EU is no longer producing sufficient milk and dairy products (including butter). Some big European farm producing countries like France and Germany no longer meet their dairy quotas (set in a time of overproduction). Experts confirm that some 100,000 dairy cows are needed in France. At the same time, drought has led to a huge fall in Australia and New Zealand's milk production. Prices are continuing to rise to the extent that some big agri-food companies are putting their prices up. The EU has scrapped 'export subsidies' for powdered milk, butter and cheese. Demand is increasing from several importing countries (Russia, Algeria, Venezuela and Mexico).
Far more seriously, the competent international authorities have announced that the 2007-2008 harvest of cereals and rice will not meet demands. Some 3 million tonnes less wheat will be produced than consumers demand. According to the Food and Agriculture Organisation, this could mean a 40% price hike and prices even doubling in some cases. And this is happening at a time when the explosion of biofuels (defended in recent days by the Brazilian president, Lula da Silva, in Brussels, who made a good case) is leading to the danger of crops being grown for fuel rather than food. Experts are openly talking about dangers of not being able to feed the world, and new swathes of people in developing countries slipping into extreme poverty again.
At the same time, what is being recommended for the Doha Trade Round is an outcome which would lead to the disappearance of huge chunks of EU and US farm production. It simply does not make sense.
(F.R.)