Global Policy Forum

EU Farm Reforms Should be More Ambitious - UK

UK agriculture and environment minister, Caroline Spelman, recently chastised EU governments for their Common Agriculture Policy (CAP), because of its enormous cost in a time when government finances are looking wobbly. Spelman proposes to replace direct subsidies with income supports tied to enhanced environmental protection. Farm subsidies in the world's advanced economies are inherently unequal, and when viewed within the broader context of rising food prices, climate change, and increasing protectionism, it is clear that the current system urgently needs modification.

By Nigel Hunt

January 5, 2011

Rising food prices provide an opportunity to cut direct farm subsidies and the European Commission's plans to reform agricultural policy should be more ambitious, Britain's farm minister said on Wednesday.

"Rising global demand for food and rising food prices make it possible to reduce subsidies and plan for their abolition," UK agriculture and environment minister Caroline Spelman said at the annual Oxford Farming Conference.

The European Union's executive adopted plans in November 2010 that would force farmers to do more to protect the environment in order to justify public subsidies. It also proposed moving some funding from direct subsidies to a basic level of income support.

"While I welcome their proposals for further moves towards market orientation and international competitiveness, I believe we can be more ambitious," she said.

The European Commission's plan, which will form the basis of legislative proposals due by mid-2011, did not contain any details of the future common agricultural policy budget, currently worth about 55 billion euros a year.

An EU source has, however, told Reuters it was drafted on the assumption that the CAP budget would remain stable.

Britain has been among the countries pushing for cuts in the farm budget at a time of debt problems in the euro-zone and huge pressure on public finances in Europe.

France and Spain, however, have called for it to remain at least at its current level after 2013.

"Of course our vision for the future and goals we set ourselves must be tempered by the current fiscal climate. There's a need for a reality check. It's astonishing that the Commission's initial views on the CAP barely acknowledge the hard times currently facing Europe," she said.

Spelman said as global demand for food rises the risk increases of "wrong-headed protectionism," noting grain export bans imposed by Russia and Ukraine in late summer 2010.

Her remarks coincided with news on Wednesday that the UN Food and Agriculture Organisation's Food Price Index in December rose to a record high, pushing past the levels in 2008 when rising food prices sparked riots in a number of countries.

She backed a proposal by France for G20 agriculture ministers to meet to improve the functioning of world markets.

"I would like to work with France to seek an end to export bans - one of the most restrictive practices found in the world market," she added.




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