The real cost of food aid

Date: 01/02/01

The recent finding by the European Court of Auditors that the EU's biggest-ever food aid programme may have been a waste of money raises new concerns that the Union has once again put the interests of its farmers and traders before those of its taxpayers.

The Court claims that the European Commission itself admitted there were no food shortages in Russia at the time the €377-million aid package was being planned. Auditors say the programme failed to achieve one of its key objectives - helping the poorest members of Russian society who were struggling in the wake of the country's financial crisis - because the products exported were simply too expensive. Worse, the programme appears to have undermined the efforts of local businesses to build up their share of markets.

Dutch Auditor Maarten Engwirda told Euro MPs on the budget control committee that the Union could have achieved its goals more cheaply by using export refunds, which compensate EU traders for lower prices on foreign markets. Consumers in the receiving country would have benefited from lower prices while Union taxpayers would have faced a bill somewhat lower than the €377 million one with which they were stuck. So the decision to go ahead with the programme must inevitably lead to suspicions that the Union was more concerned about offloading surpluses of EU beef and cereals, not least because of the overhang in the cattle market due to the BSE crisis.

The Court's report comes at a sensitive time in Union policy-making. Helping beef farmers cope with the effects of the latest mad cow disease outbreaks in Germany will cost an extra €1 billion this year and Agriculture Commissioner Franz Fischler has already made known his desire for new reforms to rebalance the beef market.

But it is clear in the midst of the BSE crisis that the European public wants to see tangible benefits from the vast sums of money being poured into the farm community in the form of safer food, a cleaner environment and a more equitable trading relationship with developing countries. If the Court of Auditors is right that the Russian food aid scheme was a case of putting farming interests before those of the wider EU public, the taxpayer's patience with the status quo could run out faster than expected.