Torsdag den 09. september 2010 12:30 Brugte maskiner i databasen: 23884 Seneste opdateringer: 09-09-2010


Agricultural reform has stalled in the US and EU

12-02-2010 17:14:04

Farm groups on both sides of the Atlantic are gearing up for a bruising battle over subsidies, as the next two years will see decisions taken on US Farm Bill renewal and the EU Common Agricultural Policy. The outcome will have major implications for global trade, food prices, fiscal policy and agribusiness over the next decade.

Over the next two years, the main US and EU agricultural policy frameworks will be overhauled:

The EU Common Agricultural Policy needs to be accommodated within the E.U.'s next multi-year budget horizon, for 2014-20. The amount of money agricultural ministers will be able to spend on EU rural programs will be a major factor in political decisions on the budget.

In Washington, discussion of a new Farm Bill, which will be needed by the end of 2012, has also started. Again, the struggle will be over the amount of funding allocated to agricultural production programs, relative to nutrition and conservation schemes.

Any liberalizing changes may be too late to save the WTO Doha Round, which is limping towards a 2010 finishing line. Yet agricultural policy has been the most significant barrier to global trade liberalization, so that upcoming US and EU policy changes may hold the key to the success or failure of future trade talks.

The EU has become a leader in farm policy reform, with a remarkable reshaping of the CAP over the past 18 years. Although still protected by high tariffs, EU farmers now get most of their support through less trade-distorting direct payments only loosely connected to their farming decisions. The market increasingly works to guide production and link farmers to consumers. However, the distribution of direct payments brings its own problems, principally of achieving equity between farmers and countries, and of fiscal sustainability in a tight-budget era. Therefore, the main issue facing those taking decisions on the future of the CAP in the post-2013 period is how to reposition the direct payments program to satisfy the political needs of 27 member states.


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