In 2007, government aid for farmers rose to 258 billion dollars, making up 23% of total agricultural earnings. The choice is simple: heartburn or starvation?

Caption: A group of French members of parliament, led by Hervé gaymard, call for new governance in global agriculture.

The era when the Common Agricultural Policy (CAP) symbolised justice in favour of rural communities is long gone. Even if its role is to feed Europe, which has 200 million more mouths to feed than the United States with half the amount of farmland, this policy is, more than ever before, a legitimate one in light of the major food crisis prevalent around the world. But to what extent is it, along with other such policies, responsible for this destabilising phenomenon?

According to a recent report by the OECD, in 2007, farmers received 258 billion dollars in aid, an amount that accounted for 23% of total agricultural sales. Despite its appearance, this figure is among the lowest since 1986, the year when the organisation began to make these estimates. This reduction is mainly a result of price increases in agricultural products. Indeed, the global rates being higher, the amount of aid and grants needed to raise domestic prices has decreased. Will the next reform of the CAP, scheduled for 2013, lead to the same policy of efficiently supporting the farming community or, on the contrary, will it nourish the idea to create a kind of global UN food regulatory body? It is too early to tell.

It’s Ricardo’s fault!

In the meanwhile, the topic is on everyone’s lips. Dated 8th June, an informational report submitted by a group of French parliamentarians led by Hervé Gaymard is asking the same question but in more tangible way: How do we feed mankind today and tomorrow? It’s a question that bowled over the popular opinion in favour of reducing the amount of food produced, and that only countries with a comparable advantage should be seeking to feed the planet. This theory barely stands up to the FAO’s alarming figures which show that cereals are at their lowest point in 25 years and an estimated 36 countries around the world are facing severe food shortages.

For the report’s authors, it’s time we had a serious discussion about the international market theory. Ricardo’s theory of comparable advantage which dates back to 1817 and the grand splendour of the British empire, rich at that time thanks to its activities in Asia, would leave only the tough choice between total free trade and total protectionism to the 21st century.

“Lessons from the failure of the poorly undertaken EPA negotiations must be learned in order to build a more exemplary policy for shared development.” From the point of view of members of the EU parliament, the United Nations must create a Council for Food Safety. The goal would be to ensure that the value of foods should not be limited to their sale value. For example, milk production, which is traded throughout the world, has slipped below 3% as opposed to 5% for rice and 15% for cereals as a whole. The report argues that these low volumes guarantee speculators’ success. Its authors urge a global approach to the food issue including agricultural development, nutrition, research, environment and trade.

The EPA: a typical example of a commercial approach

Currently, the commercial approach is winning the race as is the case with APE negotiations between ACP countries and the European Union. “With regards to the European Union, notes the report, the Lomé and Yaoundé conventions need to be founded on new bases. A more discerning look at decisions resulting from the Cotonou agreements must be made and lessons from the failure of the poorly undertaken EPA negotiations must be learned in order to build a more exemplary policy for shared development. ”

In the reform of the Lomé Convention of 1975 that concerns 77 countries today, the EU explains its position through the will to abolish a system of non-reciprocal preferences that oppose the 1994 GATT agreements. The reciprocal opening recommended would require the creation of a semi-free trade area between the EU and the six groups of ACP countries. The latter will have to improve their integration via sub-regional agreements. According to the studies, in the event that this EPA is implemented, European exports to ACP countries would increase by 35%.

In the absence of an EPA, the EU would apply the GSP or Generalized System of Preferences which is less generous to ACP economies. This would be a system that would be disadvantageous to a major exporter of agricultural products such as Ivory Coast but would not have any effect on a least developed country (LDC) such as Burkina Faso which enjoys duty free standing on all exported goods (thus the divisions that are apparent in Africa between these two groups of countries). Nevertheless, LDCs have a limited export volume. They make up only 2.9% of agricultural trade. These are complex issues that could be resolved by a food safety council.

MBF