DEVELOPMENT: EU ‘Sidetracking’ Issues on Agriculture

By IPS Correspondents Reprint | | Print |

Sanja Romic

BRUSSELS, Feb 19 2004 (IPS) - New EU proposals to support agricultural exports from developing countries are not enough, a leading NGO says.

“The actions proposed by the EU could help in limiting the crisis, but will not deal with systemic issues,” says Jo Leadbeater from Oxfam.

An action plan proposed by the EU offers support for regional initiatives in a group of 77 African, Caribbean and Pacific (ACP) countries to fight price decline of commodities such as sugar, cotton and cocoa. Agricultural exports from the ACP countries accounted for 30 percent of all EU imports in 2002.

The EU has also offered new financial arrangements to absorb price fluctuations and to help diversify production.

The EU has offered to extend FLEX EU, which offers some compensation for short-term fluctuations in export earnings, to more ACP countries. The European Commission, the executive arm of the EU, says in a report that expansion of this offer would help more farmers shift to profitable crops.

But EU proposals will need support also from “the affected countries who must be prepared and take the lead in the necessary response,” EU commissioner for development Poul Nielson said at the launch of the proposal last week.

Between 2000 and 2002 the EU paid out only 45 million dollars under the FLEX arrangement. Agricultural exports from the ACP and other developing countries have been hit by an estimated 350 billion dollars in subsidies the developed world pays out to its farmers every year.

The EU plan is “an important first step in dealing with the commodity crisis” but has too many flaws, Leadbeater says.

“Oxfam believes that the action plan does not adequately address the problems of declining prices, oversupply and prices volatility,” Leadbeater says. “If the EU wishes to be taken seriously in seeking to resolve the crisis, it should take a leading role in calling for a full review of appropriate supply management methods.”

The Cotonou agreement between the EU and the ACP countries (signed in Cotonou in Benin, Africa, in 2000) allows duty free and quota free access into the EU to all products from the least developed countries other than value added products. But export prices have run into the wall of subsidies.

A meeting in Geneva last week between EU officials and representatives from the G20, a new alliance of developing countries, failed to deliver results. The developing countries were seeking duty free and quota free access for farm exports from all developing countries. They also sought an up to 50 percent duty elimination on their products.

The EU has offered new deals on specific products such as cotton. “We want to eliminate all subsidies on the textile market as a further step in the opening up of the cotton market initiated in Cancun, Mexico last September,” says EU trade commissioner Pascal Lamy.

A European Commission report points out that cotton is a major source of employment, income and government revenue to millions in developing countries, 15 million in west and central Africa alone.

But Oxfam points out that an overemphasis on products such as cotton sidetracks real commodities such as dairy products and sugar that are hit hardest by EU subsidies.

“The reference to agricultural reform must be strengthened and a more detailed and clear commitment is needed,” says Leadbeater. “In this context, it is important that the EU show true commitment to move on commodities where EU subsidies are the main problems.”