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Position Paper #2

Give a brief summary of situation with agriculture subsidies in the EU and then address the following questions:
What is your country’s position on whether or not the EU should continue to subsidize agriculture?
What domestic tensions influence the decision making?
How is your country's policy influenced by how these subsidies affect the rest of the world, especially poorer countries?

To understand agricultural subsidies in the European Union would require an understanding of how the EU regulates these subsidies through the use of CAP- the Common Agricultural Policy. This somewhat controversial plan has existed for over 40 years now, as it originated in the post-war Europe that was devastated with food shortages. The governments felt it necessary to use CAP to hand out more payments to the farmers who produce the largest output, ensuring that no shortages would occur. Over the years, this has propped up the Eurozone’s agricultural economies quite efficiently until the 1980’s, when a surplus of food products developed. This resulted in health scares, environmental issues, damaging effects on developing countries (concerning their exports lacking, since the EU had so many to export themselves), and wasted money on farming subsidies. Already CAP was drawing criticism for taxation reasons, but now these additional factors fueled the decision to change the system from maximum-output rewards to a “market-oriented, environmentally-friendly” way of supporting farmers in rural communities that house 50% of the EU’s population.

CAP is controlled on the EU level- that is, member state representatives control the policies of it, encouraging farmers to use their land for not only food means, but also to promote a healthy environment and tourism haven. Ideally, it will no longer be just a tax to fund the farmers, so to speak, but rather to help culturists maintain a high quality of food products and maintenance of the countryside. New elements of this policy include the following elements: production limits, environmentally sound growing procedures, budget caps, demand driven quotas, subsidy payments to keep farmers afloat, “cross-compliance” (monetary penalties for farmers who do not comply with certain standards), and “decoupling”. The final term mentioned involves severing link between subsidy payments and output. Yet, the EU will not leave her new member states out to suffer in the thriving marketplace; therefore, certain subsidies are available to the new member states that joined in 2004, to help them “catch up” to the speeds of the more developed EU members. Incentive payments to help farmers grow more quality products, and assistance is given to farmers who need to do many “things” listed, such as helping old farmers in retirement, modernizing farm buildings, and encouraging tourism. Overall, the new CAP would reduce the amount of money spent on agriculture from the budget to less than 50%.

Unfortunately, France and the United Kingdom cannot agree upon new elements of how much money should be spent on agricultural subsidies in the new EU budget plan. The latter country feels that CAP is too unbalanced; their claim is not inaccurate- France has more farmers than the UK, and therefore receives more subsidy payments. This conflict between the two is best summed up by an article published on the BBC’s website:

“What is the logic behind Jacques Chirac's [France’s president] apparent proposition that Britain should forego its rebate without the Common Agricultural Policy being adjusted to correct the imbalance that underpins the rebate? Stephen, Ipswich Suffolk

“Jacques Chirac's logic is that the CAP is not imbalanced and therefore does not have to be corrected. He argues that the CAP has changed over recent years and no longer pays farmers to produce so much food. It is therefore said to meet the needs of maintaining food production and looking after the countryside. As for the rebate, the French logic is that even if Britain is entitled to something back, it gets too much back. France actually contributes the most to the British rebate.”

Since the debate concerning the CAP has been escalating in recent weeks, any thought as to how it affects third world countries seems less important to France. The truth in this hypothesis seems quite possible, considering the fact that France is more concerned with her own unemployment rates and the well-being of her farmers, especially evidenced by the recent defeat of the proposed EU Constitution. Many citizens stated that the lack of job security motivated them to vote “non”. Yet, France does look after her overseas colonies and those near to these place- one such grant called “Measures concerning agricultural products to assist the French Overseas Departments (POSEIDOM), the Azores , Madeira (POSEIMA), the Canary Islands (POSEICAN)” illustrates this fact. The objective of this grant is to “take into account the specific difficulties that these regions have in relation to the rest of the Union in applying the CAP, with a view to enabling them to develop economically and to benefit from the advantages of the single market,” by “support to local productions via ad hoc direct grants to farmers (animal,/ha/ lump sum), for local or external marketing, for processing, for the improvement of quality, for the structuring of the industry, for distribution, for private storage, for sectoral bodies, for packaging and for the maturing of products.” The French ministry of Agriculture is the primary supporter of this grant. Also, according to France’s agricultural website, France supports the FAO, the Food and Agriculture Organization, that exists “with an aim of improving the nutritional state, the standard of living, the agricultural productivity and the lot of the rural populations in general” in Third World countries.

Clearly, the main issue surrounding the CAP and France involves more of how the subsidies affect France herself, rather than how it will affect others. This is not to suggest that France is selfish for looking after herself- as mentioned earlier, the defeat of the referendum clearly shows that domestic unemployment, at 10.2%, is on everyone’s mind. True, the CAP is dubbed by Africa Commission as the “world's most protectionist trade regime,” but to France, internal affairs must be sorted out before any foreign complications are confronted.

Sources


“BBC News: African Commission Report: Analysis.”
“BBC News: Are You Bewildered by EU Row?”
“BBC News: French jobless rate on the rise.”
“CAP Explained.”
“EUROPA: Grants and Loans- Agricultural Products POSEI.”
“Organisation des Nations Unies pour l'alimentation et l'agriculture.”

posted by Marion M. @ 9:25 PM Comments: 1