American farm policies aren’t better than Europe’s

August 5, 2003

Free Market Foundation

It is a myth that U.S. farm policies are better than those of the European Union, says EU Agriculture Commissioner Franz Fischler. In some ways EU policies are better.

The United States was clearly in the lead of farm policy reform in the mid-1990s, says Fischler but made a U-turn in 2002, resorting to more trade-distorting policies.

The EU, on the other hand, driven by the increasing demands of its citizens for a policy that delivers what taxpayers and consumers want, strictly capped farm spending.

Implementation of reforms to its Common Agriculture Policy (CAP) by 2008 will have cumulatively reduced EU trade-distorting domestic agriculture support by at least 70 percent compared with 1992.

The same reform process will also drop export subsidies 75 percent, and World Trade Organisation agreements will result in a cumulative tariff reduction of 60 percent compared with 1992 levels.

Furthermore, EU market share for all major farm commodities has gone down, not up, in the last decade. U.S. agricultural exports to the EU enter at zero or very low tariffs, which is not true of EU exports to the United States.

Both entities are committed to further trade liberalisation and to giving the poorest countries in the world a better deal, says Fischler. But he concludes, in a reference to disagreements over biotechnology and other policies that “it is every country’s right to respect the sustainability of agriculture, and environmental, food quality and animal welfare objectives which cannot be reached via market forces alone provided, of course, that the measures used are not trade-distorting.”

Source: Franz Fischler (EU agriculture commissioner), Down on the European Farm, Wall Street Journal, July 28, 2003.

For text http://online.wsj.com/article/0,,SB105934882730689800,00.html

For more on Trade Liberalization http://www.ncpa.org/iss/int/

FMF Policy Bulletin/29 July 2003