Manna from heaven? CAP ‘spare change’ to boost developing country farmers

Surging prices for agricultural commodities means that the EU spends much less on the traditional ‘market measures’ of the CAP such as intervention buying when prices fall below a target price, export subsidies and private storage aid for unsold surpluses. Last year the EU decided to allocate some of this underspend to the Galileo space programme. This year, the proposal is to channel the money to farmers in developing countries who currently suffer from very low productivity.

Amid all the debate over the current ‘global food crisis’ one thing that analysts agree on is that the best chance for increasing world food production is to tackle the low productivity of many developing country farm sectors through investment in irrigation, micro-credit, provision of fertlisers, agronomic advice and research into new strains of crops resistant to drought, flooding and other climatic challenges.

Funding this second ‘green revolution’ is difficult at a time when the world’s biggest economies are close to recession, tax revenues are down and organisations like the UN World Food Programme and other aid agencies are having a hard time just standing still and meet the growing needs of the world’s hungry, as food prices continue to rise.

The figures involved are significant. Of the 53 billion euros spent on the CAP each year, and a ‘development fund’ of around 500 million to 1 billion euros is conceivable, according to Commissioner Fischer Boel. The prospect of the CAP’s ‘spare change’ being devoted to this noble cause has been widely welcomed, and is proving a bit of a PR coup for the beleaguered Commission which has been on the back foot over the Irish No vote on the Lisbon treaty and is reaping the hurricane of its unduly enthusiastic support for biofuels.

The proposal is not guaranteed success as many EU farm ministers would rather like to keep the money for their own farmers. Last week Ministers from the CEEC countries that joined the EU in 2004 and 2007 wrote asking Commissioner Fischer Boel to use the money for their farmers instead (direct payments in the CEEC countries are less than in the EU-15, although they are ramping up to parity by 2013). French farms miniser Michel Barnier has suggested using the money to help EU farmers become energy efficient. Quite how that squares with President Sarkozy’s call for an EU-wide cut on VAT on fuel is not immediately apparent. One must assume that like Walt Whitman, the French government is broad enough to contradict itself.

At the informal Agriculture Council meeting in Maribor, Slovenia, last month, we witnessed the extraordinary spectacle of EU farm ministers arguing that giving farmers more money is not the solution. Of course, when EU farmers are in trouble, the solution according to farm ministers is always to give them more money. When the question is how to help developing country farmers, according to the very same ministers, the solutions are not to be found in handouts, but in ‘capacity building’ and the like. The hypocrisy of these clowns is breathtaking.

So far, Fischer Boel has roundly rebuffed such calls, and appears committed to the development fund idea. This is one to watch with interest.

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