Let them eat foie gras

Date: 21/06/03

France's support for Europe's wasteful common agricultural policy is indefensible

JACQUES CHIRAC, France's president, is clearly not a man who worries too much about the price of vegetables. This month an investigating magistrate in Paris announced an inquiry into how Mr Chirac and his wife managed to spend over €2.1m on groceries from 1987-95, during his long spell as mayor of Paris before he became head of state. Newspapers calculate that he and his wife Bernadette munched up fruit and vegetables worth up to €150 ($177) a day, despite having an entirely separate budget for entertainment. Auditors think something smells a bit off. They say that in several instances receipts have plainly been falsified. In one case, a bill of FFr5,000 (then worth $1,000) for foie gras is said to have been doctored by someone to FFr15,000, by adding the figure one at a later date. Given his own rather cavalier attitude to the cost of food, it is perhaps unsurprising that Mr Chirac is unmoved by pleas to reform the European Union's notorious common agricultural policy (CAP). Why should the fact that the CAP adds €600 a year to the food bills of the average European family weigh heavily with a man who can eat his way through that amount, in fruit and veg alone, in just four days?

Unfortunately, it is not just European consumers whose pockets are hit by the EU's spending of over €40 billion a year to subsidise agriculture. Farmers in the poor world are doubly hurt. They must compete against subsidised European stuff. And even then their access to European markets is severely impeded. Tackling the western world's farm protectionism (meaning, above all, the EU's) has become a critical issue for the World Trade Organisation's latest attempt to foster liberalisation, known as the Doha round. A top American says bluntly that if the EU cannot agree to a package of agricultural reforms before a crucial WTO meeting in September, Doha will be “in deep, deep trouble”.

You might expect such considerations to weigh heavily on Mr Chirac, who fancies himself as a champion of multilateralism and of the poor world. The WTO is multilateral par excellence, and the Doha talks have been named “the development round” in the hope that agricultural liberalisation will help the poor world. In fact, Mr Chirac is not impervious to these arguments. The cooling of his relations with Tony Blair started when the British prime minister argued at a European summit last autumn that it was hypocritical for France to talk of alleviating third-world poverty while simultaneously blocking reform of the CAP. An outraged Mr Chirac accused Mr Blair of unparalleled rudeness and cancelled their next one-to-one meeting. But a few months later Mr Chirac suggested that Europe should put a moratorium on subsidies for food exports to poor Africa.

Unfortunately, his reforming zeal does not extend to supporting the package of CAP reforms currently on offer. This week the EU's farm ministers were locked in traditional all-night negotiations, picking apart the proposals of Franz Fischler, the Union's commissioner for agriculture. France, whose receipts of some €9 billion a year in farm subsidies make it the largest single recipient of CAP funds, has once again been leading the opposition.

There are some French arguments for saving the CAP which sound respectable. Jacques Delors, a former head of the European Commission, put it best when he said he would not sacrifice the French countryside on the altar of world trade. The beauty of France and the glories of its food and wine are indeed splendid, and help make the country the world's most popular tourist destination. But the idea that the CAP is all about helping rustic smallholders to keep making rare cheeses has very little to do with reality. In fact, 80% of the EU's farm subsidies go to the 20% of the Union's farmers with the biggest farms. Because EU subsidies are linked to production, they encourage ugly, intensive, industrial farming. The people the CAP helps most are big businessmen with vast fields of sugar beet in northern France or miles of bright-yellow oil-seed rape in southern England.

The key reform proposed by the European Commission is to cut the link between farm subsidies and production. The same amount of taxpayers' money would continue to pour into the European countryside (more's the pity), but under the commission's proposals it would increasingly be directed towards environmental protection and rural development, and away from intensive farming.

The commission's ideas, timid as they are, have three real merits. First, they redirect subsidies in a way that distorts the international trade system a lot less and thus encourages progress at the WTO. Second, they would make farmers respond to the demands of the market rather than to the availability of subsidies. Finally Mr Fischler's CAP reforms would make it more likely that EU money is spent on goals that ordinary people genuinely support, such as beautifying the countryside and keeping small farmers in business. The commission also wants to cap the amount that the largest farms receive, so ending the anomaly of the wealthiest landholders, such as England's Prince Charles, doing particularly well out of the CAP.

Farmer Jacques, magnificently sans gene

The fact that France opposes these reforms gives the lie to its government's argument that its support for the CAP is all about a principled desire to defend the unique lifestyle of la France profonde. The fact is that France is extremely proficient at intensive farming and it is intensive farmers who stand to lose most from Mr Fischler's reforms. This concern, added to the French government's fear of enraging its notoriously irascible farmers, is the real motivation behind France's refusal to contemplate real reform of the CAP.

A lesser man than Mr Chirac might blush to pursue such a venal policy, while protesting his desire to help the world's most impoverished people. But, as his grocery bills (among other things) delightfully illustrate, France's president is not a man who is easily embarrassed.

Commentary feature. France's support for Europe's wasteful CAP is indefensible.

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