This reform of farm subsidies strengthens the case for scrapping them all

Saturday 21 September 2013 04:33

Europe has had more than 30 years to wind down its scheme for over-producing overpriced food but yesterday it once again funked the fundamental reforms that are required. What the Common Agricultural Policy needs is not reform but abolition.

If that seems familiar, it may be because it was the opening paragraph of a leading article in this newspaper in July 1997.

Very little has changed over the past six years. Yet it is not fair to say that nothing ever changes. The 1997 leading article came at a time when the enlargement of the European Union to the east was becoming a certainty. The logic of expanding the subsidy regime to Polish farmers was inescapable. The argument shifted from one in which vested interests, principally French farmers, resisted every slightest change to the Common Agricultural Policy (CAP), to one about the kind of changes that would be made.

Margaret Beckett, Secretary of State for the Environment, Food and Rural Affairs, said it was "hard to overstate the importance" of yesterday's agreement. Well, not that hard. It might, for example, be described as a breakthrough, or, as Ms Beckett did, "a dramatic change".

It was not. It was probably the least dramatic change France could concede that was consistent with the accession of 10 new members of the EU next year. On the spectrum of possibilities ranging from minimal reform to phased abolition, this deal was at the conservative extreme.

Ms Beckett proudly drew attention to the fact that the agreement broke the link between farm subsidies and production. That is certainly an important principle, and one which should be welcomed enthusiastically. But her predecessor, Nick Brown, sounded just as pleased when he proclaimed that the EU had finally accepted it in 1999.

Indeed, Mr Brown could argue that his agreement was more significant than Ms Beckett's, because he and others succeeded in capping the CAP, negotiating a limit to total spending on farm subsidies. That limit, of £30bn a year, was not changed yesterday. The same amount of money will continue to be wasted on distorting the European food market for the foreseeable future.

It is not much consolation to know that some of this mountain of public money will be diverted into protecting the environment, supporting economically marginal rural communities or levelling the playing field for organic farmers. These are worthy aims, but if they deserve subsidy they should have it on their merits and should be urged on the public accordingly.

Yesterday's deal does matter, because it may mark the beginning of the end of the CAP. But it could have gone so much further. The losers from yesterday's failure are not only the citizens of the EU but, as people are becoming increasingly aware, the poor of the world, especially in Africa, whose agricultural economies suffer disproportionately from the dumping of subsidised European food.

Nor is the failure confined to food markets. One of the great prizes of phasing out the CAP would be that it would strengthen Europe's hand in world trade negotiations. The scale of European farm subsidies overshadows the smaller but still substantial subsidy regime in the US, and makes it morally difficult to argue for free trade in other goods and services.

Until the complete abolition of the CAP is in sight, it will be all too easy to "overstate the importance" of any particular piece of Eurocratic fudge.

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