Small farmers in poor countries are still waiting for a reform of the European agricultural policy that puts an end to dumping. In EU-25, 19% of the beneficiaries received in 2005 around 85% of direct payments. This highly unfair distribution of direct payments is threatening the livelihoods of small farmers in Europe and in poor countries.
Export subsidies benefit big export-oriented agri-business that dump cheap produce into poor countries. Investment subsidies mainly given to high-performance and input-intensive farms and the food processing industry push export orientation and distort trade. Price pressure on small farmers is increasing.
In short, the dumping policy is based on “three pillarsâ€: inept qualified and unfairly distributed direct payments, export subsidies, and investment subsidies. This dumping policy is used as a tool by the European Union to increase the profit margins and the competitiveness of the processing industry and the distribution sector. The nature and environment, and family farming in Europe and in poor countries are losing out.
Subsidies are not per se bad, to the contrary they are an indispensable instrument to provide incentives for needed policy changes in the Common Agricultural Policy. Re-coupling direct payments to environmental and social criteria is the very first step needed for a change of the CAP into the right direction.
Well, I’m not quite sure I agree with you that subsidies aren’t bad per se. Surely any form of domestic support that lowers rich world farmers’ costs is going to give them the ability to continue dumping i.e. selling goods at below cost price. I think the benefits of subsidies come in the initial stages of development. There’s defintiely an argument for allowing poorer countires to subsidies their agriculture but if farmers in Europe can’t turn a profit doing what they do then they should stop and let someone else do it.
And I really wish we could start moving away from the idea that farmers are somehow stewards of the environment. Is the best way to foster a sustainable rural landscape to ply it with fertilizer and instigate large-scale monoculture? If we’re going to subsidise something it should be the removal of farms and the planting of trees. Or better still, let carbon-trading kick in and allow tree planting to become profitable. No need for subsidies any more!!