SUNS  4365 Tuesday 2 February 1999

Agriculture: CAP reforms dangerous for the South



Brussels, Jan 31 (IPS/Niccolo Sarno) - The European Common Agricultural Policy (CAP) current reform proposals and their impact on farmers in both Europe and developing countries are increasingly worrying Non-Governmental Organisations (NGOs) and farmers themselves.

The European Union (EU) is the world's largest trading bloc and is in theory obliged by its treaties to consider the effects of all its policies on developing countries.

But, according to European NGOs, no attempt has been made in the reform proposal to assess the impact on the developing world.

"Many of the concerns (about the impact of the CAP) raised in 1988 remain unresolved today and this reflects the failure of the European agricultural policy-makers to incorporate a development perspective into their policy planning and formulation processes," the Brussels-based NGDOs Liaison Committee said.

"The purpose of the reform is to increase the farmers' orientation towards markets and consumer requirements by a further reduction in price support and to stabilise farm income by an increase of direct payments," European Agriculture Commissioner Franz Fishler said at a conference at the European Parliament Jan 28 and 29.

But US Under Secretary for Agriculture Gus Schumacher, who attended the conference on Agriculture, Trade and Sustainable Development, warned that "the CAP is dragging us all down. It costs a fortune."

The European Union (EU) is the world's biggest importer of agricultural goods and the second largest exporter, after the United States.

The EU's executive Commission is expected to soon propose a freeze in the price and subsidies package for EU farmers for 1999/2000, while the main decisions on the reform package are being decided.

Meanwhile, the EU Parliament on Thursday failed to give its opinion on the Commission's farm reform package, threatening to delay an agreement scheduled for February.

Under EU rules, the Parliament must offer its non-binding opinion on the reforms.

"European Union (EU) policies are inconsistent and incoherent," said Cleophas Mutjavikua, spokesman of the Namibia National Farmers Union and himself a communal farmer.

"We receive aid from the EU to upgrade our meat facilities, while we are being faced with the dumping prices of European meat in South Africa, which is the only market accessible to communal farmers north of the (Namibian) veterinary cordon fence," said Mutjavikua during the presentation of a NGO position paper on CAP reforms.

According to him, the very serious problems caused to livestock producers in Southern Africa stem from EU subsidised beef exports.

"These export subsidies on beef negate the positive results of the development aid and trade preferences which Namibia, Botswana, Swaziland and Zimbabwe currently enjoy from the European Union," said Mutjavikua.

In a statement released, European Development NGOs said that their main concern is the EU focus on export orientation in their current plans to reform the CAP.

"Through an export oriented policy, the EU indirectly supports the trend for developing countries to neglect their self- sufficiency in staple foods," says the NGO Liaison Committee.

NGOs also fear that this EU focus on exports "will increasingly place small scale producers in developing countries in direct competition with northern agri-business," putting producers in poor countries at "an unfair competitive disadvantage".

The statement warns that agricultural development and food security in poor countries are likely to be threatened by artificially-low world market prices for their agricultural exports.

Unfair restrictions on access to the EU market for exports, and over-dependence of net food-importing developing countries on world markets to meet their domestic food requirements are also damaging producers in the South, the statement said.

Some elements of the CAP reform proposals are nonetheless positive, according to NGOs. Among them is the aim of controlling overproduction by reducing intervention prices on cereals, milk and beef.

But British Agriculture Minister Nick Brown warned EU ministers last week that the plans to cut the EU's internal prices for cereals, beef and milk will be difficult to achieve.

He said they would be more expensive in the short term, as the financial burden would shift from the European consumer to the taxpayer.

The beef and dairy sectors are widely seen as the biggest obstacles to a final overall accord between the 15 EU ministers who are currently searching an agreement on how to decrease the CAP budget, which with its 40.159 billion euro in 1998 (near $60 billion US) reaches almost half the total EU budget (49%).

"The ministers don't know how will the reform of the CAP affect poor consumers in countries which have food deficits," said Peter With of the Danish NGO Danchurchaid and chairperson of an EU-wide Joint Food Security Working Group.

With suggests to rapidly phase out EU export subsidies on agricultural products, "because of the harm they do to Third World farmers through unfair competition" and to replace export subsidies -- as well as unlimited direct payments -- with support for sustainable family farm-based agriculture.

Nico Verhaegen, Coordinator of the Brussels-based European Farmers Coordination (CPE) criticised the intensive and industrial model of production which is based on exports and which leads many poor countries to buy their food "cheaply" on the world market.

"This is a model which above all serves the interests of large producers and exporting firms, but has a high cost for small farmers, consumers and taxpayers, " said Verhaegen.

The CPE says that the present agriculture policy is destructive even in Europe: " A farm disappears every two minutes in the European Union," warns the farmers organisation.

Around five percent of persons employed in the EU are working in agriculture.