Union bogged down in farm reform

Date: 18/12/1997

By Leyla Linton

AGRICULTURE ministers spent much of their time in 1997 in fruitless debates on future reforms of the EU's farm policy to prepare it for enlargement in the next millennium.

With agriculture accounting for around half of the Union's 90-billion-ecu budget, EU governments are playing for high stakes, and early discussions simply served to underline the depth of their divisions over the European Commission's proposals for reform, which centre on moving from price support to direct payments for farmers and developing a rural policy.

By the end of the year, all that had been agreed was a series of anodyne conclusions on the Commission's Agenda 2000 report. Farm ministers affirmed that the special nature of EU agriculture should be recognised and that it should be versatile, sustainable and competitive.

But even that was too much for Spain, which refused to support the conclusions because of concern that it would lose out on funding to central and eastern European countries bidding to join the Union.

The real test of Agenda 2000 will come early next year when the Commission presents specific proposals fleshing out its guidelines for Common Agricultural Policy reform.

Agriculture was also the battleground in a string of disputes between the US and EU, prompting warnings from ambassador Peter Scher, special negotiator at the office of the US trade representative, at the end of the year that "increasingly contentious trade disputes threaten our partnership".

Farm Commissioner Franz Fischler poured oil on troubled waters in September when he criticised the lack of "clear democratic controls" in the World Trade Organisation's (WTO) dispute settlement procedures.

Fischler's remarks were prompted by a WTO decision upholding US complaints that an EU ban on imports of hormone-treated meat ran contrary to free trade rules.

The Union maintains that its ban is justified on scientific grounds as hormones pose a health risk, and it has appealed against the ruling.

But the US meat industry, which has been most affected by the ban, says it is unjustified and has cost American producers around 200 million ecu.

The WTO appellate body should rule early next year.

The EU did, however, reluctantly accept another equally controversial ruling. The WTO upheld a complaint lodged by the US, Mexico, Guatemala, Honduras and Ecuador about the Union's banana import regime, which favours African, Caribbean and Pacific countries at the expense of Latin American produce marketed by US companies.

The Union has yet to tell the WTO how it intends to comply with the decision.

Part of the European Voice 'Review of the Year'.