CAP reform vital to boost EU trade

Date: 17/04/1997

EUROPEAN farmers look set to miss out on increasing opportunities to sell their produce on the world market, according to the Organisation for Economic Cooperation and Development.

In the clearest indication yet that reform of the EU's farm policy is vital, the OECD warns that the countries of North America and Oceania will corner the lion's share of new opportunities unless the Union moves its policies closer to those of the market.

In its Agricultural Outlook 1997-2001 report, the organisation forecasts that its member countries' exports of cheese and wheat to non-OECD nations are set to grow by 10&percent; compared with the 1991-95 period.

Exports of coarse grains will grow by close to 45&percent;, while trade in poultry will nearly treble and pigmeat exports will grow fourfold.

But, in an open warning to the EU, the report stresses that “because of the increasingly binding restrictions on the use of export subsidies, the growing markets outside the OECD region are captured almost entirely by producers and traders in countries with market-orientated production”.

While North American and Oceanian exports are expected to grow strongly, those from the Union are stable or shrinking. “This is the price EU farmers have to pay for support that continues to keep domestic prices for many products above those on world markets,” concludes the report.

Growing Asian markets provide the key to the future, with expansion in the region's real income likely to be double that in the developed world over the next five years. The boom in the Asian 'tiger' economies is leading to massive increases in demand for meat, dairy products and cereals.

The report finds that China has become the great uncertainty on world commodity markets, but says it is certain to be crying out for 'western' exports for the foreseeable future.

The findings of such a respected international body are bound to cause anxiety in the Commission, which has acknowledged the importance of bringing Union price levels closer to those in the rest of the world but is also acutely aware of the difficulty of convincing agriculture ministers of the need for change.