Leading article: Soaring food prices should lead to the end of subsidies

Share
Related Topics

Traditionally, one of the infuriating habits of the agricultural protectionist lobby has been its willingness to seize upon any economic trend to justify its position. When world food prices are low, we are told that poor farmers need subsidies to guarantee their income. When prices are high, this is apparently a sign that subsidies are needed to expand production.

So it should be no surprise to hear the global shortage of grain and other commodities being used to defend the Common Agricultural Policy. The French Agriculture Minister, Michael Barnier, even suggests that exporting the CAP model around the world, would promote global "food security".

In fact, the reverse is true. Reinforcing the CAP will only make the global food crisis worse. While subsidies will boost production in the immediate term, only free trade will ensure that global production rises to the appropriate level in the long term. As usual, the protectionists ignore the distorting affects of subsidies. African agriculture has failed to expand over the past half century in large part because it has been unable to compete with subsidised and protected EU farmers. This lack of domestic production capacity and a reliance on imports is one of the reasons why a surge in demand for food from Asia and a series of droughts have hit Africa so hard.

Thankfully, yesterday's draft policy paper released by the European Commission on further reform of the CAP seems, in the main, to have resisted the influence of the farming lobby. The paper talks of capping subsidies for major landowners, phasing out milk quotas and diverting a greater share of the agriculture budget to rural development and environmental protection programmes. There is a case for public money to pay farmers to improve water management, boost ecology and build dry stone walls; these are social goods that benefit everyone. Public money should not be used to reward farmers for producing surplus. To this extent, this document aims to continue the dismantling of the CAP set in motion five years ago.

But there is also a clause which suggests allowing national governments to use more CAP money at their discretion. There is a danger this could be used by some member states, notably France, to renew the link between subsidy and production. Any move in this direction must be fiercely resisted.

Actually, high global food prices provide a golden opportunity to demolish the protectionist CAP if European leaders have the imagination to grasp it. Farmers cannot plead poverty when their produce is fetching record prices. And the malign global consequences of protectionism have never been more obvious as food riots break out in developing countries.

High demand will not be a passing trend either, so arguments about the need for the CAP to boost European production will progressively lose their force. Global supply will certainly increase, but the extra demand from Asia looks likely to remain. This will ensure that an incentive remains for European farmers to maintain production.

There are other benefits. If Europe makes a serious move to curtail subsidies it will exert pressure on the United States to dismantle its own protectionist architecture. Washington has long argued that it will end its agricultural subsidies when Brussels does the same. Last but not least, there is the affect of recent food inflation on the European consumer to consider. Scrapping import tariffs on agricultural commodities should, in time, mean some relief for shoppers (although the era of very cheap food is surely over).

The political circumstances for killing off the CAP have rarely been more promising. It is time for a concerted push to force Europe's farming sector to stand on its own two feet.

React Now

Latest stories from i100
SPONSORED FEATURES
iJobs Job Widget
iJobs General

Recruitment Genius: Personal Tax Senior

£28000 - £37000 per annum: Recruitment Genius: This is an opportunity to join ...

Recruitment Genius: Customer and Markets Development Executive

£22000 - £29000 per annum: Recruitment Genius: This company's mission is to ma...

Recruitment Genius: Guest Services Assistant

£13832 per annum: Recruitment Genius: This 5 star leisure destination on the w...

Recruitment Genius: Sales Account Manager

£20000 - £32000 per annum: Recruitment Genius: A Sales Account Manager is requ...

Day In a Page

Read Next
Seven per cent of young men have recently stopped using deodorant  

‘Sweaty-gate’ leaves a bad smell for PRs and journalists

Danny Rogers
Alison Parker and Adam Ward: best remembered before tragedy  

The only way is ethics: Graphic portraits of TV killings would upset many, not just our readers in the US

Will Gore
A nap a day could save your life - and here's why

A nap a day could save your life

A midday nap is 'associated with reduced blood pressure'
If men are so obsessed by sex, why do they clam up when confronted with the grisly realities?

If men are so obsessed by sex...

...why do they clam up when confronted with the grisly realities?
The comedy titans of Avalon on their attempt to save BBC3

Jon Thoday and Richard Allen-Turner

The comedy titans of Avalon on their attempt to save BBC3
The bathing machine is back... but with a difference

Rolling in the deep

The bathing machine is back but with a difference
Part-privatised tests, new age limits, driverless cars: Tories plot motoring revolution

Conservatives plot a motoring revolution

Draft report reveals biggest reform to regulations since driving test introduced in 1935
The Silk Roads that trace civilisation: Long before the West rose to power, Asian pathways were connecting peoples and places

The Silk Roads that trace civilisation

Long before the West rose to power, Asian pathways were connecting peoples and places
House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled

The honours that shame Britain

Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled
When it comes to street harassment, we need to talk about race

'When it comes to street harassment, we need to talk about race'

Why are black men living the stereotypes and why are we letting them get away with it?
International Tap Festival: Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic

International Tap Festival comes to the UK

Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic
War with Isis: Is Turkey's buffer zone in Syria a matter of self-defence – or just anti-Kurd?

Turkey's buffer zone in Syria: self-defence – or just anti-Kurd?

Ankara accused of exacerbating racial division by allowing Turkmen minority to cross the border
Doris Lessing: Acclaimed novelist was kept under MI5 observation for 18 years, newly released papers show

'A subversive brothel keeper and Communist'

Acclaimed novelist Doris Lessing was kept under MI5 observation for 18 years, newly released papers show
Big Blue Live: BBC's Springwatch offshoot swaps back gardens for California's Monterey Bay

BBC heads to the Californian coast

The Big Blue Live crew is preparing for the first of three episodes on Sunday night, filming from boats, planes and an aquarium studio
Austin Bidwell: The Victorian fraudster who shook the Bank of England with the most daring forgery the world had known

Victorian fraudster who shook the Bank of England

Conman Austin Bidwell. was a heartless cad who carried out the most daring forgery the world had known
Car hacking scandal: Security designed to stop thieves hot-wiring almost every modern motor has been cracked

Car hacking scandal

Security designed to stop thieves hot-wiring almost every modern motor has been cracked
10 best placemats

Take your seat: 10 best placemats

Protect your table and dine in style with a bold new accessory