Sunday, October 30, 2005

French play food securirty card

Peter Mandelson is caught between a rock and a hard place in trying to reach agreement in the Doha Round agricultural trade negotiations. On the one hand, he has to move towards the negotiating demands of the US (and the G-20). On the other, he has to avoid annoying France so much that it derails the whole negotiation and hence the Doha Round. The EU has now made a new set of concessions, but they may be too little for the US and too much for France.

France has wheeled out their finance minister, Thierry Breton, to defend the CAP in an interview in the Financial Times. This is a smart move as he is an avowed moderniser who formed his own software company in 1981, before running a science park and then taking charge of high tech groups Bull, Thompson and France Telecom.

But he insists that the CAP is essential for Europe's future and must not be sacrificed at the altar of the WTO. He challenges Tony Blair's description of the CAP as 'spending of the past', describing it as a modern, forward-looking policy, essential for safeguarding the security of Europe's food chain.

He claims that Europe has developed one of the best - and safest - agricultural systems in the world. 'There is no magic here: we have decided to put our money together to build this infrastructure.' He argues that anyone who thinks agriculture is a market like any other is 'old-fashioned', as they ignore growing risks to food security.

He seems to think that the growing world population poses a problem in terms of producing enough food, although this is partly a question of what limits are placed on the introduction of new technology. It is also the case that in the west people are consuming more food than is good for their health or at least food of the wrong kind.

It is the case that agricultural markets have their own special features ('cobweb cycles' etc.) and this is why one does need some stabilisation mechanisms, although these might be provided more efficiently by state guaranteed insurance arrangements rather than by subsidies.

Breton argues that we must protect food security 'at all costs' otherwise 'we will have new food catastrophes, or even pandemics.' The link between averting avian flu and subsidising marginal farmers is quite a tenuous one. In the UK, people have tried to use the threat of terrorism to wave the food security card, but have never been able to demonstrate exactly what the threat to the food chain is.

If subsidies were removed overnight, many European farmers would go out of business to the extent that world food prices would rise. There is a case for replacing subsidies by some kind of bond scheme with a finite life.

However, there is a case for providing some help for farmers for the positive externalities they provide (such as cherished landscapes), while there is a rural development case for providing help to remoter regions (which is not to say that depopulation is necessarily always a bad thing).

What is difficult to justify is spending nearly half the European budget and over €40 billions a year on the CAP and rural development. The opportunity cost is considerable at a time when Europe faces major challenges in world markets and needs more spending on research and development and innovation.

The French insistence on defending the CAP may not only derail the Doha negotiations, it may even eventually place the whole European project - or least its viability - in jeopardy.

5 Comments:

Blogger BuyKorea said...

You got outstanding blog.
Hello Offers and buyers,
Let me tell you some trade portal site which managed by original korean official trade
agency called kotra. Kotra launched buykoreaagreement international trade for helping trade products.
This cool site offers trade leads as well Products.
You may have a chance to increase your business.
great buyers looking for your products.
Mind do not miss opportunity on buykorea

1:52 AM  
Blogger Dokdo Island said...

hello
offers or buyers

These days trade business much easier since internet development.
On net, we can find well made trade portal site.
In fact, those cool sites help your trade business.
How many countries? what kinds of products?
Yes, we can not count.
Around the world, someone looking for your products, and a company
want to import your goods.
Trade portal site become huge marketplace so it called "emarketplace."
How many emarketplace do you know.
Which emarketplace do you recommend.
I am proudly tell you the emarketplace "Buykorea.org"
You may not buy korea, but you can buy and sell what you want.
Buykorea.org trade service managed by kotra(un profit trade agency)
Your marketing budget will be save and business increased.
Check what do you want to know about
business business export import lead trade.

1:28 AM  
Blogger Fruta Vida Girl said...

It's great to see someone else interested in tahitian noni, my husband has diabetes so I have been trying to find out more!

5:55 PM  
Blogger haidi said...

Hi, Need to know about telecommunications story or update, so visit my website **Telecom** site/blog. It pretty much covers Telecommunications Updates related stuff.

Have a nice day.
Otai

6:43 AM  
Blogger haidi said...

Hi, Need to know about telecommunications story or update, so visit my website **Telecom** site/blog. It pretty much covers Telecommunications Updates related stuff.

Have a nice day.
Otai

3:55 PM  

Post a Comment

<< Home