Tag Archives: agriculture

Supply management has no place in the TPP

It would be madness for Australia to agree to admit Canada to the TPP “free trade” negotiations on the basis that they might keep their astronomically high barriers to some food imports. The Canadian Trade Minister, Ed Fast, told reporters this week that he believes Canada has “public support” from six of the nine countries […]

“Critical Mass” on US business agenda

The US National Foreign Trade Council has released a short paper (PDF file) endorsing a “critical mass” (CM) approach to new WTO-associated trade agreements, without, however, producing any new ideas on how to accomplish this in the current multilateral trade framework. A top U.S. business group, frustrated with years of stalemate in world trade talks, […]

Huge gaps remain in WTO negotiations

Recent rounds of bilateral talks between the USA and China on opening both farm and non-farm product markets as part of WTO’s long-delayed Doha Round have been inconclusive for very familiar reasons: “[U]nfortunately, what we learned confirmed our worst fears – that we would see no new market access on our major agricultural export interests” […]

Australia’s trade outlook is strong

By 2030 China, especially, dramatically increases its share of world imports of agriculture, fossil fuels and services, according to the World Bank’s modelling Note, too, the projected share of low and middle-income economies in world trade in 2030: up from a third to a half.

Back and forward (and back) in Geneva

News services have all picked up a statement by the U.S. negotiator for agriculture in WTO in which he claims there’s been “some progress” in the Doha negotiations in the past six months but it looks like there’ll beno new rules ahead of the U.S. Congress extending the farm bill subsidies in 2012. “Some progress“?! […]

Why the Doha Round is failing

The usually well-informed ITSCD Bridges Newsletter tries to explain it with a bit of tabloid alliteration: ‘Political Paralysis Poisons WTO Agriculture Talks’. Nah! It’s a political choice to put the talks on life-support and it will be a political choice to pull the tubes. It’s Doha that’s in rigor, not the pollies. The Doha Round […]

EU launches debate on farm subsidies

Expenditure on the CAP

“Following several weeks of consultations, the European Commission is expected to draw up a report on potential changes to the CAP in mid-summer. ” Extract from ICTSD • EU Farm Commissioner Launches Debate on Subsidies

I bet there are no surprises.

The overall strategy for the Common Agricultural Policy beyond the next budget horizon (2013) is already evident in the chart. It shows that nominal expenditure in €billions is being held nearly steady—or rising just slightly— despite the enlargement of the Union. But the value is falling in real terms (and as a proportion of GDP). This strategy plays to the cash illusion of farmers (assuming they still have such illusions) while keeping the lid on their incentive to expand production, which only adds to public stock woes and diverts the budget into disposal expenses (export subsidies).

But At 0.4% of GDP, the CAP still represents sixty percent of all expenditure by the Union. So sixty-years on from its launch, the madness of this giant re-distribution machine continues.

The more ‘varigated’ distribution of the funds diplayed in the chart—illustrating ‘CAP reform’—is a bit of furphy. The ‘coupled’ and ‘de-coupled’ payments direct to farms and the ‘rural development’ expenditure are nearly fungible sources of income for farmers. They all pay to keep farmers in a business where world market prices tell them they should not be (or would tell them were it not for the import barriers).

It’s ironic that the Commission has entitled this public consultation as “2013, Your Ideas Matter…”. Because ideas have long been junk where the CAP is concerned; only interests have any force.