By IPS Correspondents
BRUSSELS, Sep 25 2003 (IPS)

Leading non-governmental organisations say the European Union’s proposals to further reform the controversial Common Agricultural Policy are inadequate.

The reform proposals outlined this week would mean cuts in subsidies for sugar, tobacco, olive oil and cotton. But several civil society groups and campaigners on development issues say the latest reforms do not go far enough for developing countries, and that they are a further blow to the developing world after the Cancun debacle.

Developed nations refused to give in to demands by trade ministers from developing countries at the World Trade Organisation (WTO) ministerial conference earlier this month to do away with agricultural subsidies.

In a move to address the concerns over subsidies, the European Commission, the executive arm of the EU, outlined new options Tuesday this week to change the way EU aid is delivered to the sugar, olive oil, cotton and tobacco industries.

Under the Commission’s new proposals, 60 per cent of subsidies for cotton and olive oil would no longer be tied to production, and all subsidies for tobacco would be abolished over a period of three years. Instead, payments to farmers would be linked to the extent to which they address environmental and food safety standards.

For sugar, the Commission approved three potential options for reform. The first would be to maintain the current regime beyond 2006, based on flexible quotas and price intervention. The second would involve cutting guaranteed internal EU prices and slashing production quotas. Option three would be complete liberalisation, where the domestic EU price support system would be abolished, and production quotas abandoned.

“Following the June 2003 CAP reform for major agricultural sectors, the time has come to consider how we can make the present EU sugar sector more market orientated and economically, environmentally and socially more sustainable,” said Franz Fischler, EU Commissioner for Agriculture, Rural Development and Fisheries, and author of the plan while announcing the proposals.

The main elements of the June review included general proposals to de-link direct payment to farmers from production and making these conditional on compliance with environmental, food safety, animal welfare and occupational safety standards. They did not address specific products.

Many NGOs say that in proposing these reforms, the EU has missed a unique chance to repair some of the damage caused by the recent breakdown of world trade talks in Cancun.

“The proposed reforms to the CAP are too little, too late,” Tim Rice from the British charity ActionAid told IPS. “Following the collapse of the world trade talks in Cancun, developing countries will not accept any half-baked plans cooked up by the European Commission. It is time for comprehensive change, including the elimination of all export subsidies.”

Kevin Watkins from Oxfam supports this view. “The EU places the defence of the indefensible CAP above any commitment to reduce poverty,” he said in a press statement. “When it comes to agriculture, the right of big farms to collect large subsidy cheques comes before Europe’s obligations to the multilateral trading system and its commitment to reducing world poverty. It is high time that the EU makes the root and branch reform of the CAP that’s needed.”

The EU’s proposals have also been criticised on the other hand by beneficiaries of subsidies such as an interest group from the European sugar sector.

The CEFS (Comité Européen des Fabricants de Sucre), which defends the interests of European sugar manufacturers, says the EU needs to pay more attention to fixed quotas.

“The CEFS firmly believes that only if the EU maintains a sufficiently high level of import protection and grants preferential access to an agreed quantity of sugar at guaranteed prices from ACP (Asia, Caribbean and Pacific) countries and Least Developed Countries, can the greatest possible benefits be generated for the highest possible number of countries,” Jean-Louis Barjol, Director General of CEFS, said in a statement.

The EU sugar industry swallows 1.8 billion dollars in subsidies every year. The artificially guaranteed EU price for sugar is more than three times higher than the world market price as a result. France and Germany are the EU’s leading sugar producers, followed by Italy and Britain.

The options will now be debated by EU member states, which must agree to any major policy changes in the sector.

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