Do-ha, So-wha'?

The internet silence following the collapse of the Doha Round on 30 July last has been striking. It appears not only the negotiators but also the commentators feel the need for a well-earned August break. In a piece for last Sunday’s Irish Sunday Business Post, I tried to summarise my own views on why the Round collapsed.… Read the rest

Do-ha, So-wha’?

The internet silence following the collapse of the Doha Round on 30 July last has been striking. It appears not only the negotiators but also the commentators feel the need for a well-earned August break. In a piece for last Sunday’s Irish Sunday Business Post, I tried to summarise my own views on why the Round collapsed.… Read the rest

The CAP's ambiguous face to the outside world

The description of a Fortress Europe has often been applied to the CAP. But just as the CAP has undergone significant internal reform since the first faltering steps under Commissioner MacSharry in 1992, there have also been substantial changes to the CAP’s external trade regime. The EU still maintains high tariffs on specific agricultural imports, but in fact the majority of the EU’s agricultural imports (including here fish as well as highly processed products like beverages and tobacco products) enter the EU duty-free, either because the Most Favoured Nation (MFN) tariff is zero, or because the EU has granted duty-free preferential access.… Read the rest

The CAP’s ambiguous face to the outside world

The description of a Fortress Europe has often been applied to the CAP. But just as the CAP has undergone significant internal reform since the first faltering steps under Commissioner MacSharry in 1992, there have also been substantial changes to the CAP’s external trade regime. The EU still maintains high tariffs on specific agricultural imports, but in fact the majority of the EU’s agricultural imports (including here fish as well as highly processed products like beverages and tobacco products) enter the EU duty-free, either because the Most Favoured Nation (MFN) tariff is zero, or because the EU has granted duty-free preferential access.… Read the rest

EU wrong to get involved in provision of free fruit and vegetables

Yesterday, the Agriculture and Rural Development Commissioner announced an EU-wide scheme to provide free fruit and vegetables to school children between the ages of 6 and 10. The purpose of the scheme is to encourage more healthy eating habits among children as a contribution to the campaign to fight the obesity epidemic which is storing up very large health costs for European countries in the future.

While the objectives of the scheme are entirely laudable and should be supported, I strongly question what business the EU has getting involved in promoting a School Fruit Scheme (although the scheme also covers vegetables, it seems to be referred to as a fruit scheme – vegetables were always the poor relation!).… Read the rest

New Humboldt University report on global market trends

Another study forecasting higher real food prices for the next decade has recently been published by three authors associated with the Humboldt University in Berlin led by Professor Harald von Witzke. The working paper provides a useful qualitative survey of the reasons why agricultural supply will have difficulty in keeping up with the demand for food and other products of agriculture (including bioenergy). For the more technically minded, it uses a partial equilibrium multi-market model (descended from the venerable SWOPSIM model once supported by the US Department of Agriculture) to provide quantitative estimates of price levels for the key grains and oilseeds which are the focus of the study.… Read the rest

What is happening to EU land prices?

The evolution of agricultural land prices and rents can be a good indicator of the effect of agricultural policy, because of the assumption that a significant proportion of the transfers to farmers as a result of such policy are capitalised into land values. Thus, changes in agricultural policy may have implications for land values, and the prospect of capital losses due to a fall in land values can be one source of opposition to such changes.

The issue is relevant in the context of the Commission’s proposals to introduce a ‘regret clause’ with respect to the implementation of the Single Payment Scheme as part of the Health Check.… Read the rest

Milk quota removal could cost EU farmers €4 billion

The elimination of milk quotas as currently foreseen in 2015 will result in a loss to producers of €4 billion, and a gain to consumers of €3.7 billion, according to research by economists at the Institut d’Economie Industrielle in Toulouse. The group were asked to evaluate the impacts of the expiry of the EU milk quota system, comparing particularly a ‘soft landing’ scenario in which milk quotas are gradually increased between now and 2015, and a ‘hard landing scenario’ in which quotas are maintained until 2015 and then eliminated in that year. The ‘hard landing’ scenario postpones the adverse effects for producers both in competitive milk-producing countries (where quota rents are currently high) as well as in countries which currently are not meeting their quota.… Read the rest

Irish farmers flex muscles in Lisbon Treaty referendum

The WTO negotiations have become a live issue in Irish politics because Ireland is the only EU country which will hold a referendum to ratify the Lisbon Treaty, and the campaign provides an opportunity for interest groups to maximise their bargaining strength. For example, farm groups who are traditionally pro-EU in referendum votes have threatened to campaign against the Lisbon Treaty not because of the content of the Treaty but because of their dissatisfaction with the way they see Peter Mandelson as EU Trade Commissioner handling the WTO negotiations.

Padraig Walshe, President of the Irish Farmers’ Association, the largest of the Irish farm groups, gave a not-so-veiled warning recently when he noted that “it would be unrealistic to expect the farming community and rural people to vote for the Lisbon Treaty while Mandelson is planning the destruction of the Irish and European family farm structure.”… Read the rest

US Farm Bill goes to the wire

The US Congress has just 14 days in which to agree on a new farm bill able to secure the approval of the White House, and time is running out. If a farm bill is not passed by March 15th, then the so-called ‘permanent legislation’, the provisions of the Agricultural Adjustment Act of 1938 and the Agricultural Act of 1949, would again become legally effective. The implications of this happening have recently been analysed by the US Department of Agriculture and would have such a dramatic and perverse effect on US farm programmes that it is most unlikely that Congress would let it happen.… Read the rest