British Attack on EU Farm Policy Dismissed

BRUSSELLS - A British argument that generous farm support for new members of the EU has fueled recent food price rises has been challended by Slovenia, which currently holds the presidency of the European Union.

19 May 2008

2 minute read

"There are many reasons for higher food prices, so I would not do a direct connection to the CAP (common agriculture policy) as such," Slovenian Farm Minister Iztok Jarc told journalists.

Speaking before chairing a meeting with EU counterparts, he downplayed London's latest attack as "one view on the CAP," EU Business reports.

Firing a salvo in what could easily flare into a major battle, British finance minister Alistair Darling called last week for a "fundamental reform of Europe's agriculture."

He said that a root-and-branch reform should include "phasing out all elements of the CAP that are designed to keep EU agriculture prices above world market levels," which he said cost EU consumers 43 billion euros in 2006.

Darling also called for "an end to direct payments to EU farmers," which he said cost European taxpayers 34 billion euros in 2006.

"Barriers and distortions in the global food market increase volatility and stifle the incentives to increase supply to match demand," he argued.

According to EU Business, Darling's attack came as the European Commission was due to publish on Tuesday proposals to update the CAP in the context of surging food prices by phasing out milk quotas and scrapping rules on keeping land fallow.

His ideas found little favour with Dutch Farm Minister Gerda Verburg who said: "I'm afraid I don't support his proposal because I think that the CAP can help relieve the problems."

"But it's not easy because we have neglected too long the investment in agriculture," she said. "So it's not a good idea to quit with the EU's CAP."

Global food prices have nearly doubled in three years, according to the World Bank, sparking demonstrations last month in Egypt and Haiti, protests in other countries and restrictions on food exports from Brazil, Vietnam, India and Egypt.

Rising use of biofuels, trade constraints, increased demand from Asia to serve changing diets, poor harvests and increasing transport costs have all been blamed for the price rise.