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Time to come clean on EU farm subsidies

Article by Jack Thurston

September 15, 2006

Long-opposed sugar subsidies are soon to be ruled illegal by a World Trade Organization appeals panel, and non-governmental organisations such as Oxfam and Christian Aid have put together high-profile campaigns against a whole range of agricultural policies that harm poor rural communities in the southern hemisphere.

Last month the UK government followed the example set by Denmark by announcing that it would reveal details of CAP payments to individual farms.

The move – the result of an application from the Foreign Policy Centre and the Guardian newspaper under the UK’s new Freedom of Information Act – will allow British taxpayers, for the first time, to find out exactly where the £3.5 billion (€5.1bn) they pay in farm subsidies every year goes to. Were this to become an EU-wide requirement, it would boost public support for CAP reform significantly.

In the US, a similar campaign for disclosure was led by the Environmental Working Group (EWG) and the Washington Post newspaper. The EWG now maintains an online database, providing a full breakdown of how much public money an individual farm has received at the touch of a button. More transparency about payments would first of all end the oft-heard but erroneous argument that the CAP is there to protect small, family-run farms. In fact, across the EU, 80% of the money currently goes to just 20% of farms: mostly large agri-businesses.

This is not about demonising farmers. The public recognises that Europe needs its farmers for many reasons: to produce quality food, to sustain rural communities and to manage and enhance our pastoral landscapes. France for instance, the staunchest defender of the CAP, argues that it does not want its marginal areas to be abandoned or its rural populations to dwindle. Nor does it want to become like New Zealand, where vast areas are set aside for ranching. So long as farmers are delivering public benefits, they should not be ashamed of receiving public money.

This thought is central to the new contracts between farmers and wider society that have emerged in Germany, UK and France in the past few years. During the 1980s, EU food mountains, at a time when millions were starving in Africa, caused public outrage. In the 1990s, food safety scares over BSE, foot-and-mouth disease and genetically modified organisms battered confidence in the ability of farmers to produce safe, nutritious food.

Trade and development NGOs are successfully making the moral case against farm subsidies in rich countries that close off markets to some of the world’s poorest countries. Recently, a radical idea to end CAP subsidies to the richest 2% of farmers and redirect the money to the fight against AIDS won the support of dozens of members of the British parliament, including the former foreign secretary, Robin Cook.

What, then, does the future hold for the CAP? Currently, the greatest pressure comes from finance ministries in those EU countries that bear the bulk of the cost for farm subsidies, including the UK, the Netherlands, Sweden, Denmark and – above all – Germany. Among the ‘1% club’ of member states that wish to limit EU budget contributions to 1% of national income, agricultural subsidies – which account for nearly half of the EU’s total spending – are an obvious target for budget cuts.

Farm subsidies were once the dirty secret of European politics but the connections that are increasingly being made between agricultural policy, global poverty, the environment and taxation are finally bringing the issue into public awareness. They are focusing attention on the need for openness and a debate on farm policy that reaches beyond traditional agriculture lobbies. Mariann Fischer Boel, the European agriculture commissioner, was also the mover behind Denmark’s decision to disclose details on individual CAP subsidy payments, when she was Danish minister for food, agriculture and fisheries. She should implement the same policy at an EU level.

Jack Thurston is senior research associate at the Foreign Policy Centre and a former special adviser at the UK Ministry of Agriculture, Fisheries and Food. He is co-editor of ‘Free and Fair: Making the Progressive Case for Removing Trade Barriers’, published by the FPC.

© Copyright 2005 The Economist Newspaper Limited. All rights reserved

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