EU backs farm support cuts

The European Union launched what it called a bold plan to cut farm support and liberalise global agricultural trade yesterday, but aid groups said it fell far short of what was needed to help poor nations.

The proposals are part of talks launched by the World Trade Organisation (WTO) at Doha last year to free up commerce, particularly in the politically sensitive area of farm goods, and give developing nations a bigger slice of world trade flows.

Criticising alternative proposals from the United States and other key farm goods' exporters as overly ambitious, the EU called for a cut in farm goods tariffs of 36 per cent, of 45 per cent in export subsidies and 55 per cent in trade-distorting domestic farm support.

It also backed duty-free, quota-free access for farm exports from the world's poorest countries, and a guarantee that rich countries would give such zero-duty access to at least 50 per cent of their imports from other developing states.

"We are ready to put our money where our mouth is and we have put forward ambitious but realistic proposals in all sectors, including agriculture, one of the most challenging for the EU," said European Trade Commissioner Pascal Lamy.

The cuts in subsidies and farm support were conditional on fair burden-sharing from other developed countries - a clear reference to the United States, which massively increased aid to its farmers in a Farm Bill passed this year.

Farm Commissioner Franz Fischler said the proposals did not require any change in the EU's controversial Common Agricultural Policy (CAP) and would go forward even if the bloc failed to adopt a radical overhaul of the policy he proposed last July.

A reform of CAP could allow the EU's proposals to the WTO to be even more ambitious, Lamy said.

France, a big beneficiary of farm subsidies, gave the plan a cautious thumbs up. "We noted with satisfication the European Commission's wish to defend the European model of agriculture," said Agriculture Minister Herve Gaymard.

Fischler denied the proposals were just a rewarming for WTO consumption of existing policies. "These are substantial changes. Let us not underestimate them."

The Commission wants to get its proposals to the WTO in time to be included in a progress report on the farm negotiations due to be made a senior WTO official this week.

But a EU diplomat said a final submission by the bloc on how the WTO agriculture talks should proceed, for which a deadline of March 2003 has been set, would need approval by EU states.

A Commission spokeswoman said she did not foresee big objections to the proposals from the EU executive.

The Commission said the proposals should be implemented over six years for developed states and 10 years for developing nations. They would come into force after the end of the Doha talks, expected in 2005.

Aid group Oxfam, which has criticised EU farm subsidies for dumping goods and impoverishing Third World farmers, dismissed the Commission proposals as a public relations exercise.

It said the proposal on trade distorting subsidies would leave key support payments, such as to the dairy and sugar sectors, untouched. The Commission said it wanted to eliminate export subsidies for wheat, oilseeds, olive oil and tobacco.

"The EU had an opportunity to provide global leadership in addressing a problem at the heart of global poverty," said Justin Forsyth, Oxfam's Policy Director.

"Instead, it has produced a vacuous public relations document designed to paper over differences between member states," he said.

The group was also angry at the delay in bringing in a proposal to halve EU export subsidies. "They should be prohibited with immediate effect," Forsyth said.

The Commission also proposed keeping domestic support measures that were aimed at protecting the rural environment and boosting food safety, including the labelling of products.

This was a reference to a brewing dispute with the United States, which has said a new EU law on labelling goods containing genetically modified (GM) products is too onerous for producers. Washington has said it is considering launching a trade case at the WTO over the whole GM issue.

The EU proposals were also aimed at reclaiming the moral high ground in the Doha talks as the United States has already put forward its proposals on agricultural trade.

The Commission had data to show the EU was not the villain in terms of farm support it is sometimes painted as being.

It quoted figures from the Organisation for Economic Cooperation and Development (OECD) as showing that the cost of supporting farmers in the EU was $90 billion compared with $49 billion in the United States.

But this translated as a cost per capita to citizens of farm support of $338 a year for the United States and only $276 a year in the EU, even though the 15-nation bloc had more farmers and more farms.