Poverty in the Third World, the EU and the Common Agricultural Policy

I know, I know, it sounds dull, but there are a couple of things worth looking at..............

The news here is full of the UK’s climb down over the EU budget. The Brits have an historical rebate on contributions to the EU of 1.5 billion pounds sterling. This harkened back to a time when the UK was in the doldrums economically (20 years ago) and made little sense in today’s economic world. What the UK wanted to do was trade its rebate for a reform of the Common agricultural policy, which again dates back to times distant. The CAP is a system of subsidies paid to farmers in order to preserve rural life, and promote self sufficiency within the EU for food production. What started out as a laudable goal has now been distorted into an indefensible system of patronage, and a barrier to countries in the third world feeding themselves. First a few facts:

40% of the EU’s budget is spent on agriculture
70% of this goes to France
France does not want this to end as, it would have to pay the farmers itself
France does not have the money to pay the farmers
French Farmers Blockade roads and ports at the least provocation
The French Government is afraid of the farmers

As the Times puts it:

“The European Commission figures show why French farmers are so attached to the EU subsidies. More than 131,000 French farmers took €20,000 (£13,000) or more from Brussels in 2003, far more than the combined total of 104,000 farmers from Britain, Italy and Germany who receive that amount. About 3,200 French farmers secured more than €100,000 in subsidies. The biggest beneficiary in France was a rice farmer in the Camargue, who received €866,290.
In total, French farmers received €7.38 billion in subsidies in 2003, more than twice the total of the UK, Italy or Germany. The EU subsidies are highly skewed in favour of large farmers. In 2003 the richest 1.6 cent of EU farmers received 27 per cent of all subsidies. The poorest 54 per cent of farmers received only 4 per cent.”
The myth of the little rural farmer getting rich, (the subject of countless why should we pay for his Citroen?!! Tabloid headlines), is just that a myth. The biggest beneficiaries of the CAP are surprise, surprise big industrial farms and quite a number of better known French, Dutch and English public figures:
“In Britain, the aristocracy, including the Queen and the Prince of Wales, have done particularly well out of the CAP, but the pattern is repeated elsewhere. Prince Albert of Monaco receives about €300,000 a year from his farms in France.
Many senior French politicians also profit handsomely, according to the French finance magazine Capital, which calculated that Rémy Pointereau, a senator, received €121,000 last year, and Luc Guyau, an ally of President Chirac, received €50,000.
Cees Veerman, the Dutch Agriculture Minister, received €168,000 for farms in France and €22,000 for farms in the Netherlands. In Denmark, four out of 18 Cabinet ministers received money from CAP last year, as did the husband of Mariann Fischer Boel, the EU Farm Commissioner. “
For the full article go here
http://www.timesonline.co.uk/article/0,,13509-1927728,00.

So what happens to all of the food produced at subsidised prices? Well quite a bit of it is sold within Europe, effectively shutting out farmers from the Third world. The rest is sold to the Third World effectively wiping out those same farmers, flooding their market with goods at prices below production cost.
Shouldn’t we sell to the poor in the third world at prices they can afford? Well yes, but what good are you doing if you wipe out commercial farms? These countries are poor. The subsistence farmers will struggle along, but they don’t produce enough to feed the population. Why deny the sugar farmer the right to produce and export, and earn valuable currency for his country’s economy by shutting them out of Western Europe? Sugar is a particularly nasty little example, though it appears that reform is coming.
http://www.ceps.be/Article.php?article_id=467

Under the present regime the CAP is unlikely to be even discussed for reform until 2013.The circle of poverty will continue. Rich industrial countries will waste important funding on an anitquated system while at the same time running short of funds needed to improve the infrastructure of the new members of the EU family (Poland, Hungary, Estonia etc). Rich agricultural land in the Third World will lie fallow because it is economically impossible to farm and the sell the crops.

In 200 the average dairy cow in the EU received $913 in subsidies. Compare that to $8 per person in Sub Sahara Africa.

This is just the EU. The US has a similar system in place.
If we really are serious about ending world hunger and poverty, we need to do more than watch LIVE 8 or take our clothes to OXFAM. We need to pay attention to how our tax money is spent and pressure politicians to stop supporting trade policies which do little to help the third world help themselves. Even if we want to be purely selfish, we are clearly wasting money and doing little good for our own internal economies.

So ends my Tuesday Tirade