| |
EU subsidy reform gets
feeble cheers in Asia
By Marwaan
Macan-Markar
BANGKOK - A European Union attempt
to sound magnanimous over its recent reforms in
agricultural policy has still to draw loud cheers across
Asia, whose activists say they know a charade when they
see one.
The early bursts of opinion across the
region suggest that only feeble cheers are appropriate
for what is perceived in Asia as a "small start" or a
"first step" at best in making the playing field in
international trade a fairer one.
For change to
be meaningful, say critics, Asian farmers need the EU to
go the whole hog.
The EU's reforms of its Common
Agriculture Policy (CAP) on June 26 are very limited,
since they do not accelerate the phasing-out of export
subsidies, said Walden Bello, head of the Bangkok-based
think-tank Focus on the Global South. "In fact, I wonder
if they can be considered reforms at all."
Bello
views the reforms by the EU as an exercise in diplomatic
sophistry because of the way the contentious issue of
subsidies was overcome. Under the new arrangement, the
EU will, from 2005, shift to spooning out a fixed
subsidy to farmers based on the size of their farms
rather than the quantity of their produce, which was the
case before.
What it achieved "does not
substantially bring down the levels of subsidization [of
agriculture products in Europe] while demanding greater
market access from Asian and other developing
countries", said Bello.
In Australia, a country
that has been among the leaders of those pressing the EU
to slash its agriculture subsidies, the reactions to the
CAP reforms were far from robust. "It is only a small
step, [yet] it is a positive step," Peter Corish,
president of the National Farmers Federation, told the
Australian Broadcasting Corp.
A spokesman for
Australian Trade Minister Mark Vaile was quoted in the
press as having said: "This is not the full reform
wanted. To that extent we're disappointed."
In
Thailand, which has been hit by the effects of CAP,
newspaper editorials commented that the EU's change of
heart brings little gain to Asia's poor farmers. "The
news is not joyous for Third World farmers. The reforms
do nothing to change the EU practice of subsidizing the
sale of food on world markets. That means farmers in
poor countries will still find it difficult competing
with cheap sugar, wheat and cotton from Europe," argued
the Bangkok Post in an editorial last week.
This
lukewarm response to measures that the Europeans were
trumpeting as a major breakthrough stems from the burden
the Asian agriculture sector has had to shoulder due to
the farm subsidies of the EU, the United States and
fellow Asian nation Japan.
The subsidies made it
"next to impossible" for Asia's developing countries to
compete in the agricultural sector, said Santosh
Mehrotra, a senior policy advisor at the United Nations
Development Program. "The subsidies reduced the
incentive to invest in the Asian farming sector,
consequently lowering the total output."
Recent
research bears that out: the EU, the US government and
Japan spend US$300 billion annually to subsidize their
agricultural sectors. That, United Nations officials
point out, is three times the total amount spent
annually by developed nations on overseas development
assistance for all developing countries.
The
dairy industry in India and Vietnam are typical victims
of the EU's subsidy policy.
"India's dairy
industry - the world's largest - is badly hit by EU
dumping of milk products," said Alex Renton, spokesman
for the British development agency Oxfam's East Asia
office. "Subsidized EU milk is sold in some of the
world's poorest countries at 25 percent less than the
production cost of local farmers. Powdered milk will be
partially addressed under this reform, though subsidy of
the dairy industry will generally continue in Europe."
Thailand, on the other hand, has felt the weight
of EU subsidies on sugar. Studies done by Oxfam reveal
that EU taxpayers pump close to $1.7 billion every year
to subsidize the EU sugar industry. "EU subsidies on
sugar are among the most absurd - not only do they
subsidize the production of sugar in Britain,
Scandinavia and Germany, where costs are three times the
market price, they also subsidize its export," said
Renton.
Consequently, countries such as
Thailand, one of the leading sugar exporters, have been
forced to find ways of pushing up the price of sugar on
the global market to ensure that local sugar farmers are
not reduced to destitution.
EU sugar subsidies
have artificially depressed the price of sugar by about
17 percent, according to the World Bank. The current
price of sugar on the international market is 8 US cents
per pound (17.6 cents per kilogram).
The new
reform of the CAP "does not address sugar, [and] we're
told that that reform has been put off to a later date",
said Renton.
The EU, however, sees the reforms of
CAP in different light, arguing that its new policies
are trade-friendly and mark an end to a subsidy system
that distorted international trade and harmed developing
countries.
Development and economic analysts say
they realize that the changes in the EU's farm policy
will give it some width against the US government and
Japan when agriculture and free-trade issues are taken
up at World Trade Organization's ministerial conference
in Cancun, Mexico, in September.
But as a
Bangkok-based newspaper asserted in an editorial last
week, more pressure should be applied on EU members that
are resisting reforms in subsidies if the promise of
agriculture reform is to become a reality at the Cancun
conference. "The battle must continue," declared The
Nation.
(Inter Press Service)
|
| |
|
|
 |
|
