EU's subsidy reforms 'do little for the poor'

The European Commission this week announced long-awaited proposals to reform some of the most criticised aspects of the its subsidy-laden common agricultural policy (CAP).

The commission outlined three options to overhaul the way European Union aid is handed out to the sugar and cotton industries. Option one is to maintain the current regime beyond 2006; option two is partial reform, cutting guaranteed internal EU prices and slashing production quotas; and option three is complete liberalisation.

Oxfam said the plans fell far short of what was needed, kept some of the worst subsidies in place and did little for the world’s poor. A unique chance to repair some of the damage caused by the recent breakdown of world trade talks in Mexico had been squandered.

Kevin Watkins of Oxfam said: “The EU places the defence of the indefensible CAP above any commitment to reduce poverty ... and when it comes to agriculture the right of big farms to collect large subsidy cheques comes before Europe’s obligations to the multilateral trading system and its commitment to reducing world poverty.

“It is high time that the EU makes the root and branch reform of the CAP that’s needed.’‘

The commission countered that it had not yet decided which option to plump for.

The EU’s sugar regime is controversial in the extreme. Its subsidies swallow â,¬1,4-billion every year and the artificially guaranteed EU price for sugar is more than three times higher than the world market price as a result.

France and Germany are the EU’s leading sugar producers, followed by Italy and Britain.

Gregor Kreuzhuber, a commission spokesperson, said Franz Fischler, the EU agriculture commissioner, was the first person to try to reform the sugar regime since its inception in 1968 and was committed to real change.

Complete liberalisation was not necessarily the answer, he added, because it would hurt African, Caribbean and Pacific countries that are allowed to export their sugar to the EU at zero duty.

The proposals will now be hag- gled over by EU farm ministers. — Â

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