Ministers draft strategy to defend EU farm policy

Date: 09/09/1999

By Simon Taylor

EU FARM ministers will start work on defending the Union's agriculture policy against attack in the forthcoming world trade talks when they meet in the Finnish town of Tampere this weekend.

The Finnish presidency wants to launch a debate on how to protect key elements of the Union's farm support system, including the direct payments which account for more than half of the 50-billion-euro cost of the Common Agricultural Policy.

If the EU fails to come up with a convincing strategy, farmers could face major income losses as the Union's partners insist on reductions in payments which break international trade rules.

In the next trade round negotiations, which start at the end of this year, the US and other agricultural exporting nations in the Cairns Group are expected to call for an end to a special concession agreed during the last round called the "blue box". This allows countries to pay aid straight to farmers to compensate for price cuts based on the amount of crops they plant or the number of animals they have.

A discussion paper prepared by the Finnish presidency for this weekend's informal meeting, which begins on Sunday (12 September), says the US and Cairns Group will argue that the blue box is "superfluous, unnecessary and used by only a few members of the WTO".

But the paper stresses that "maintenance of the blue box is essential for the defence of the CAP". Otherwise, it warns, most CAP compensatory payments would be made subject to reduction commitments.

The Finns also warn that the EU will get little support from other WTO members in its fight to save the blue box, unlike in the last round when the US shared the Union's view. "Maintaining the blue box will require quite some effort from our side," states the paper.

But Commission officials do not believe the US will win the battle so easily. "The US argues that its payments under their FAIR Act agricultural reform are green-box compatible, but we are not convinced that they all are," said one.

Acting Farm Commissioner Franz Fischler points out that Washington paid h6 billion to its farmers last year to compensate for the effects of floods and droughts, despite US claims that it had moved to a more market-orientated agriculture.

In order to defend the CAP, the EU will argue that European agriculture deserves special treatment because of its importance in a range of functions like maintaining the natural landscape and preserving employment.

But to convince other WTO members of this argument, the Finns want to produce a more concrete definition of "multifunctional" agriculture, spelling out additional roles played by farming and why farmers should receive financial help for it.

Farm ministers will finalise their approach to the agricultural negotiations at their next formal session on 27-28 September. Their foreign ministry counterparts will then decide the EU's overall strategy for the round next month, ahead of the WTO ministerial meeting in Seattle in November.