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EUROPE: The Appetite Is for Money

David Cronin

BRUSSELS, Oct 16 2008 (IPS) - Faced with the prospect that a number of banks could collapse, European Union governments have this week approved a rescue plan worth more than 1,800 billion euros (2,460 billion dollars). Faced with a food crisis which has seen a major leap in the numbers of people suffering from hunger, the EU’s policy makers are mulling over a proposal to give 1 billion euros to farmers in poor countries.

And it is by no means certain that this money will actually be released.

Like many ideas emanating from the Brussels bureaucracy, the proposal for a 1 billion euro ‘food facility’ has become the subject of a tug-of-war between the EU’s main institutions.

The idea was put forward by the European Commission earlier this year, which recommended that some of the subsidies earmarked for the Union’s farmers that had been unspent should be used to buy seed and fertilisers for their counterparts in more impoverished lands. But Germany, the largest contributor to the EU’s coffers, and some committees in the European Parliament have found fault with the scheme, citing concerns that the correct budgetary procedures are not being followed.

The fate of the facility was debated at events marking World Food Day Oct. 16.

Anti-poverty activists demanded that the 1 billion euros should be additional to development aid already promised by the Union and that guarantees should be given that the money will find its ways to those who need it most. “It is a shame that European leaders are holding out on 1 billion euros to bail out the hungry, when almost 2,000 billion euros can be mobilised at short notice to save the financial sector,” said Alexandre Polack from ActionAid.

In a new report, his organisation contended that while extra aid is important, it cannot be a substitute for the changes in economic policy that are required to address the underlying reasons why the number of hungry people in the world has climbed from 850 million to 925 million.

It suggests that measures that appear anathema to the free market ethos preached by the Brussels elite must be contemplated. These include granting poor countries the possibility to restrict food imports in order to protect local producers. Guinea and Senegal, the study says, have been able to revive their flagging potato and onion sectors by introducing temporary bans on imports of these foods from the Netherlands.

Christiane Taubira, a member of the French general assembly, called for a fundamental rethink of the economic partnership agreements (EPAs) that the EU is negotiating with Africa.

Taubira, who has prepared a report on the EPAs at the request of French President Nicolas Sarkozy, said that the kind of agreements favoured by the European Commission are free trade deals unsuitable for countries suffering from high levels of poverty and malnutrition. She argued that they should be rejected and that negotiations should instead be undertaken with a view to fostering economic and social development in Africa and respecting the right to food of its citizens.

Renwick Rose from the Windward Islands Farmers Association complained that “skewed agricultural and economic policies” mean that just two countries in the Latin America-Caribbean region – Guyana and Belize – are net food exporters.

Rose said at a conference organised by the Technical Centre for Agricultural and Rural Cooperation (CTA), a group promoting farming in poor countries, that whereas bananas are typically found in the lunch boxes of British schoolchildren, parents in some Latin American countries and the Caribbean are encouraged by advertisements to give imported foods, rather than locally grown fruit to their children.

Stineke Oenema from CONCORD, the umbrella group for Europe’s humanitarian agencies, argued that it is vital that support for agriculture should be focused on small-scale farmers. Encouraging intensive agriculture and the swift liberalisation of agriculture can push peasant farmers out of business and cause severe harm to the environment, she said, expressing concern about how some policy makers are continuing to advocate such a course of action for Africa. “We don’t seem to learn any of the lessons of the past,” she added.

Prerna Bozman from the South Asia Alliance for Poverty Eradication argued that the EU’s food facility should not be used to advance the agenda of big food companies. “The ongoing pesticide-driven industrialisation of agriculture has significantly contributed to the current crisis and has devastating economic, environmental and health repercussions,” she said.

A high-level European Commission official Lluis Riera said it is “extremely urgent that we act now.” His institution is hoping that the other key EU bodies will approve the facility by the end of this year, so that the money can be available in time for the planting season that kicks off in March 2009. After decades of declining support for agriculture by aid donors, the Commission and the World Bank have began recognising its vital importance more recently. “We have to seize the opportunity in order to reinforce this trend,” Riera added.

Steve Wiggins from the Overseas Development Institute in London suggested that the riots sparked by inflation in more than 20 countries earlier this year underscores why tackling poverty can be viewed as a question of security and stability. “In a world of considerable inequality and a situation where 900 million people suffer from hunger, there are obvious political difficulties with continuing with that situation,” he said.