European Agricultural Reforms: A Pig in a Poke? ; Policy Changes Do Little to Open Markets to Developing-World Farmers, Say Critics

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The European Union's new agricultural reforms, designed to curb overproduction of food and limit dumping in foreign countries, may do less to help farmers in developing countries than officials claim, according to development experts concerned that the reforms are not as sweeping as they look.

After long and rancorous negotiations, European agriculture ministers agreed last week largely to sever the links between food production and subsidies that their Common Agricultural Policy (CAP) had enshrined, and to spend more money on rural development.

But by leaving the actual amount of subsidies paid to farmers untouched, the ministers "missed a one-off opportunity," complains Steve Hibbett, policy director for the British charity War on Want.

"In historical terms, they failed," he adds.

EU leaders ended their talks on a triumphant note last Thursday.

"This decision marks the beginning of a new era," EU Agriculture Commissioner Franz Fischler told reporters. "We are saying goodbye to the old subsidy system, which significantly distorts international trade and harms developing countries."

Hands off the sweetest deals

Critics of the reforms point out that sugar - a crop important to many countries in the developing world - was not even on the agenda because of its political sensitivity to many European governments. Nor were export subsidies reduced.

Such subsidies are very damaging to third-world farmers, says Sam Barratt, a spokesman for Oxfam.

A European dairy giant, Arla Foods, receives $15 million a year from the EU to facilitate its milk exports to the Dominican Republic, he points out, which makes its milk 25 per cent cheaper than local supplies. That has cost 10,000 Dominican dairy farmers their jobs over the past 20 years, he says.

European farm subsidies, which are the largest in the world at $50 billion per year, eat up nearly 40 percent of the EU budget. The Union's enlargement to the east next year, bringing in several nations heavily dependent on agriculture, threatened to bankrupt the EU unless its policies were reformed.

The Common Agricultural Policy, offering farmers more government money the more they produced, was successful when it was launched in the 1950s in its goal of encouraging European food self- sufficiency. But in recent decades, subsidies and price support mechanisms have led to huge surpluses of grain, dairy produce, and other agricultural goods.

The system has not only raised the price of food for European consumers 45 percent above what it would ordinarily be, according to the Organization for Economic Cooperation and Development (OECD), the Paris-based group of the world's most prosperous economies. It also encouraged European farmers to export their surplus to developing countries.

That has left many farmers in the developing world in an impossible position - unable to compete with the subsidized imports from Europe. …