Already in June this year the French had circulated a memorandum on Food, feed, animal and plant imports: safety and compliance with Community rules which identified four main problems.

* Differences between member states in the practices applying to food imports concerning the performance and frequency of checks (a harmonisation deficit);

* The need to base monitoring of food imports on a more comprehensive sanitary and phytosanitary risk assessment (better use of risk analysis);

* Differences in the requirements facing EU producers and imported foodstuffs (the memorandum highlighted examples where a ban on the use of chemical substances and their residues in foodstuffs in the EU might not apply to imported foods, the burdens of traceability on EU producers, or higher standards applying to animal feed manufacture in the EU (distortion of competition).

* The need to amend the WTO SPS agreement to allow import restrictions not only on the basis of scientific assessment of health risks but also other legitimate factors and collective preferences as, for example, with respect to animal welfare.

In its Conclusions, the Council welcomed the Commission’s moves already in train for more effective veterinary and health checks on imports into the Community. It also supported the French proposal for use of comprehensive risk analysis in designing import protection policies, and approved greater coordination between member state border inspection services.

The Council Conclusions were more cautious on the other two issues. While it agreed to promote European standards and regulatory criteria (my italics) within international standardisation organisations in the fields of animal health, plant health and food safety, and in negotiations for bilateral agreements with third countries, this is to be “in compliance with the SPS Agreement” which of course only recognises scientific concerns. On collective preferences, the Council only sought better information for consumers, presumably through labelling, in accordance with international trade rules.

Regarding the use of trade barriers to compensate for the higher standards supposedly met by Community producers, the Commission was asked to produce a report in the economic impact of differences in standards. The Conclusions read:

in compliance with the SPS Agreement, to continue to promote European standards and regulatory criteria within international standardisation organisations (e.g. OIE, IPPC, EPPO, Codex alimentarius) in the fields of animal health, plant health and food safety, and in negotiations for bilateral agreements with third countries;

…

to begin considering appropriate mechanisms for consumer information that would provide much greater transparency on the methods and conditions of production and characteristics of products, in accordance with international trade rules;

to explore what impacts any differences in standards between EU producers and key international trading partners actually have on Community trade, and to analyse, as a basis for further discussion, how international and bilateral trade rules can better interact with EU societal concerns and legitimate factors.”

The potential importance of SPS barriers in the case of food trade was underlined by the Council decision taken at the same meeting not to allow the use of antimicrobial substances to treat poultry. Food manufacturers in Europe are only allowed to use water to remove surface contamination from animal products, whereas the US permits the use of chlorine disinfectant to wash poultry carcases. This has long been a thorn in the side of US poultry exporters, and the US requested an assessment by the European Food Safety Authority of the health effects of using these antimicrobial substances.

The scientific advice of the European Food Safety Authority was that there was no evidence of any risk to human health or risk of greater resistence to therapeutic antimicrobials. On this basis, the Commission had proposed to approve the use these antimicrobial substances under strict conditions. However, the EU’s Standing Committee on the Food Chain and Animal Health (a regulatory committee which consists of representatives of the member states) had voted 26-1 against approving these substances in June, and this decision has now been upheld in the Agricultural Council.

The importance of this issue to the US is shown by its prominence in the agenda of the Transatlantic Economic Council which is the principal bilateral US-EU body to discuss transatlantic economic relations. The refusal of the Agricultural Council to accept this recommendation now opens the possibility of a trade dispute before the WTO.

French Agriculture Minister, Michel Barnier, is reported as saying that the decision had nothing to do with preventing competition. “No, it isn’t protectionism,” he said. “Don’t mistake protection for protectionism. The Americans and the Chinese and others will just have to get used to Europeans saying that not only is our system better, but it is different and we value that difference.”

Environmental Defense, a US conservation group, has joined with 14 other NGOs in calling on Congress to resist pressure to release 24 million acres from the Conservation Reserve Progam (roughly three quarters of all land currently enrolled in the program). The letter says:

“We urge you to protect the taxpayers’ investment in soil quality, water quality, and wildlife habitat and not allow landowners to leave CRP contracts early without fully reimbursing the Treasury for the taxpayer-funded investment in those lands.”

Currently, conservation contract enrollees who terminate their contract prior to the end of its 10- to 15-year term must reimburse the federal government for the rental and cost-share payments they have received, plus interest, and a penalty of 25 percent of the total rental payments received.

It is important to note that there is a major difference in emphasis between EU and US conservation programmes in that EU schemes are less about land retirement and more about improving practices on working lands. A European farmer who puts land into an agri-environment scheme is not required to abandon all production on the land, rather to farm the land according to higher standards of soil and conservation, apply fewer agrochemicals and take action to benefit wildlife and biodiversity.

In cases where EU agri-environment schemes do entail a significantly lower intensity of production, I have no doubt that many European farmers are already considering whether it’s worth staying in the scheme.

Agriculture Secretary Ed Schafer released a statement saying the vote “sends the wrong message to the rest of the country who are not experiencing the boom of the agriculture sector,” and, “This bill is loaded with taxpayer funded pet projects at a time when Americans are struggling to buy groceries and afford gas to get to work.”

Keith Good of the excellent website farmpolicy.com has served up a couple of audio clips featuring leading Congressional figures giving their perspectives. The first features members of the House:

[audio:http://farmpolicy.typepad.com/farmpolicy/files/HousePassesConferenceAgreement08May14.mp3]

The second features members of the Senate, and it’s interesting to note that both Senators reference EU farm policy in their comments:

[audio:http://farmpolicy.typepad.com/farmpolicy/files/SenConfDebateHarkinConradEUPolicyNoted08May14.mp3]

Ken Cook, of the Environmental Working Group, one of the most dynamic members of the pro-reform alliance, pulls no punches in his criticism of how the House Democrats sold out to the subsidy lobby:

Democrats are supposed to stand on principles of fairness and equity, not sell them. And today they sold them on the cheap.

If the House had displayed even a modicum of political courage and taken on the subsidy lobby, this farm bill could have gone far beyond the miserly spending increases it provides for nutrition assistance to the poor at home and abroad, conservation, farmers markets, organic food, minority farmers and other important priorities that have long been neglected or under-funded. And there would have been money left over to give taxpayers a break.

Apparently the Democratic caucus thought they were log rolling when the subsidy lobby tossed them some twigs.

In a period when crop prices and farm incomes are soaring to record levels, the continuation of bloated subsidies to the largest, most prosperous farms in the country can only be seen as a breathtaking cop-out on the part of congressional leaders.

I certainly hope that this is not a taste of what’s to come over here in Europe when the European Parliament gets co-decision powers over agriculture policy under the Lisbon Treaty. The Agriculture Committee of the European Parliament is currently stuffed with farmers, ex-farmers and other assorted pork-barrel merchants. It is the last group of people you’d want to be making agriculture and food policy. There are of course elections to the EP between now and then, but it will be very interesting to see if the composition of the Agriculture Committee will change when it’s powers are increased, as has been argued by Jon Worth among others.

Senator Grassley knows full well that for the past few years, a full 30 per cent of maize grown in the US is grown not to feed people but to feed automobiles, for the very good reason that a good part of it is grown and refined in his very own home state of Iowa. The notion that withdrawing such a huge volume of land from food production could have any impact on the availability and affordability of food is clearly beyond the Senator’s grasp of basic economic theory. But then again, we are talking about a longstanding member of the Senate Agriculture Committee, the folks that only last year dreamed up a new $5 billion ‘permanent disaster aid program’ to give handouts to farmers in parts of the US where it never rains.

When he was Chair of the Senate Finance Committee, Grassley authored the massive tax breaks that began the ethanol boom. For those who are interested in economic analysis, biofuels are thought to be responsible for between 10 and 25 per cent of recent increases in food prices. The other drivers of price rices include a high oil price, bad harvests in several parts of the world, speculation in commodity markets by investors, decreasing government strategic food reserves and the increased consumption of livestock products in the growing middle classes of Asia and Latin America.

But back to the press briefing. As a performance, it’s a cross between the self-consciously folksy shtick of vintage era Donald Rumsfeld and the cringe-making, rabbit-in-the-headlights inanity of President Bush. In the video I’ve cut in a few choice passages from a rather different speech Grassley made at a New Baptist Covenant meeting at the Carter Center in Atlanta, Georgia, earlier in the year.

Listen to Senator Grassley’s infamous ‘Let them eat rice’ declaration in full

[audio:grassley_audio.mp3]

“I read about the riots over the price of food. It’s bread in Egypt and it’s rice in China, er, I mean Thailand, and maybe other places where they have some riots, but… I don’t see any… I saw a little bit of concern in Mexico maybe three months ago on tortidos. Is that what you call them, tortidos? [Aide: "Tortillas"] Tortillas. And er, and er, but, but, y’know, we don’t make, er, ethanol, out of rice and out of wheat. So I’m not sure that I understand except ignorance on the part of people about the connection between making ethanol and making, and, er, food. Because I could set a bucketful of corn in front of those people from the IMF or we could go where they’re compaining. And they wouldn’t know what to do with it. Any more than I would know what to do if an eskimo set a pale full of blubber in front of me. So, er, so I’m not very sympathetic toward it at this point. When they start getting a connection between corn and food, then I’ll be glad to listen. Part of our problem is that Chinese are going, er, to eat meat. And you’ve got to have corn and soybeans to feed the Chinese, their meat, then why isn’t it just as legitimate for the Chinese to go back and eat rice as it is for us to change our policy on corn to ethanol.”

Can this be the same Chuck Grassley who opined that “turning a blind eye and a deaf ear to world hunger exposes the selfish side of human nature.” With US corn at record highs of $6 a bushel, the selfish side of Chuck Grassley is very much exposed!

Here in the EU, politicians are falling over themselves to recant on any earlier backing of food-for-fuel policies. But for as long as selfish, hypocritical, pork barrel merchants like Chuck Grassley are driving the policy, the US will continue marching down this most crooked of roads that is doing so much harm to world’s poorest people and to the environment.

Of the three remaining candidates to be the next US President, only one has a record of opposing ethanol boosterism: John McCain. The Washington Post recently reported on a physical altercation between Grassley and McCain, though this was NOT over ethanol subsidies. It did lead the pair to be on non-speaking terms for two years, though it is said that they have subsequently patched things up. I’m told that Democrat front-runner Barack Obama has well and truly drunk the biofuels kool aid while Hillary Clinton is just desperate to woo farm state super-delegates as she battles to stay in the race for the Democratic nomination.

If changing EU policy on biofuels feels like turning around a supertanker, changing US policy is more akin to pushing an avalanche back up the mountain.

The 2007 Farm Bill

The White House kickstarted the debate on a new Farm Bill to replace the 2002 Farm Security and Rural Investment Act when then Agriculture Secretary Mike Johanns unveiled the USDA farm bill proposals in January 2007. The USDA proposals had been preceded by a massive public consultation exercise in the previous two years which included 52 Farm Bill Forums across America. The proposals were intended to transition towards more market-based programmes and to distribute resources more equitably among producers and commodities.

Key elements were more effective payment limits, strengthened disaster relief through a new revenue-based counter-cyclical programme, reductions in loan rates and loan rate caps, additional funding for conservation, renewable energy research and speciality crop producers, as well as revision of nutrition programmes.

The bills subsequently passed by both Houses of Congress were much more traditional, promising to make the additional payments for conservation and Californian fruit and vegetable growers but also maintaining and even extending the traditional farm commodity programme subsidies, including a new $5 billion ‘permanent disaster’ fund.

Stand-off between Congress and the White House

The difficulty is that the White House has threatened to veto any bill which comes in significantly over the Congressional Budget Office baseline for farm spending, and both Democrats and Republicans now believe the final bill could cost up to $9-10 billion more than the baseline, which the White House has indicated would not be acceptable.

Under the pay-as-you-go rules any new spending must be offset by new tax revenue or funding cuts elsewhere. Apparently, the farm policy lawmakers have been looking at all kinds of potential tax sources to close the gap, including new taxes on foreign companies setting up in America and higher taxes on consumers’ credit and debit card transactions.

Leading Senators such as Senator Tom Harkin have indicated that they are prepared to make cuts in decoupled direct payments to reach the necessary budget figures, but the White House has ruled this out.

The original USDA bill had proposed an increase of $5.5 billion in direct payments. And despite the huge increase in commodity prices for commodities such as corn and soyabeans which are major beneficiaries of direct payments, cutting direct payments does not seem to be acceptable to the White House.

The USDA analysis of the implications of reverting to ‘permanent legislation’ combined with the expiration of various payment authorities in the 2002 Farm Bill if US legislators cannot sort this out in the next 14 days are hair-raising (see also a similar analysis by the Congressional Research Service). Minimum price support for wheat producers would jump from $2.75 per bushel to £7.80 per bushel, but only if they can produce records showing that they had a wheat allotment in 1958! Payments to sugar and soybean producers would disappear, while new enrollments in conservation programmes would be halted.

Implications for EU

Apart from the substantive issue of what happens to US farm policy in two weeks’ time, the US experience raises interesting reflections for the EU reform process. For example, if the Lisbon Treaty is passed and implemented from next year, giving the European Parliament much greater powers with respect to agricultural policy, will we see the same kinds of standoff between the Commission (perhaps backed by the Council) and the Parliament as currently witnessed in the US?

Will EU legislators in the current health check be prepared to cut into the Single Farm Payment by agreeing to modulation as proposed by the Commission so that funding for conservation and other rural development initiatives can be increased, as effectively proposed by some US Congresspersons in their debate? The US debate on continuing direct payments at a time of high commodity prices deserves a wider hearing in Europe.

The survey was conducted in the United States and six EU member states (Germany, France, Italy, Poland, Slovakia and the UK). Taking the European sample as a whole, the ‘consumer agenda’ is ahead by 9 percentage points. The strongest support was found in Slovakia (+37%), Italy (+28%) and the UK (+17%). US respondents supported the consumer agenda by a margin of 26 percentage points.

Only in Poland did the producer agenda predominate, largely because of a strong desire for preserving small family farms. 23 per cent of Polish respondents saw this as the top priority for agricultural policy. The other country where small farms were the top priority is Germany (29 per cent of respondents). In contrast, 42 per cent of EU farm subsidies in Poland go to the top 10 per cent of recipients. In Germany, 54 per cent of CAP farm subsidies go to the top 10 per cent of recipients.

The respondents in the survey were asked to select their top priority for agricultural policy from the following six options:

1. Ensuring a plentiful supply of food
2. Ensuring safe food
3. Protecting the environment
4. Providing emergency relief for farmers
5. Preserving small family farms
6. Insuring farmers against unpredictable market conditions

Food safety was the top concern for respondents in Italy (28%), Slovakia (28%) and the US (27%). In the UK the top priority was the supply of food, with 24 per cent of respondents selecting this as their top priority. In France, the most popular priority was environmental protection, with 27 per cent of respondents choosing this option, and 23 per cent choosing environmental protection. This is a very interesting result since the traditionally very powerful French farm lobby can be seen to be losing ground to environmental and consumer protection interests.

The other agricultural questions in the GMF survey concerned biofuels. The survey found robust support for biofuels as a way of tackling climate change (68 per cent in the EU) and increasing energy security (71 per cent in the EU), despite the mounting evidence that these gains are illusory or insignificant. See, for instance, the work of Ron Steenblik and colleagues at the International Institute for Sustainable Development. The biofuels boosters would seem to have retained their momentum into 2007, although the survey did find that 56 per cent of respondents agreed that biofuels production will result in increased food prices (37 per cent disagreed).

Link: German Marshall Fund ‘Perspectives on Trade and Poverty Reduction’ 2007.

Ever since the subject of farm subsidy fat cats hit the headlines in the US, the issue of payment limits has been at the forefront of the debate. Ken Cook, whose courageous work on transparency in farm subsidy payments has blazed a path where the European farmsubsidy.org network has followed, says that the House bill’s rules on payment limits are riddled with loopholes and is fuming that Democrat House Speaker Nancy Pelosi is backing the House bill:

It is unimaginable that in other realms of policy she would think of such a “reform” as anything other than pandering to the rich, via subterfuge and loopholes, at the expense of the nation’s other needs and priorities. This payment limit proposal is the kind of monumentally unfair proposition that Nancy Pelosi has stood against, second to no one in Congress that I could name, her entire career.

Meanwhile Dan Owens as the Center for Rural Affairs dismisses Speaker Pelosi’s commitment to reform as a sham. He says that House Democrats are wrong to fear an electoral backlash from rural America if they pass a Bill that tackles the inequality in the current farm subsidy system. Scott Faber at Environmental Defense says that the House bill would perpetuate the failures and injustices of the past:

More than half of all farm spending will continue to flow to just 20 congressional districts. Millions of hungry kids will continue to go to bed without knowing the source of their next meal. Thousands of family farmers offering to share the cost of a healthy environment will continue to be turned away. Thousands more family farmers will be driven off the land by larger neighbors now able to collect unlimited farm subsidies. Subsistence farmers in the developing world will be pushed closer to ruin by subsidies that drive down global cotton prices. Black and Latino farmers will continue to lack adequate access to farm programs from which they have long been excluded. Fruit and vegetable farmers will receive a small slice — but not nearly a fair share — of federal farm spending pie.

Sarah Cohen of the Washington Post adds fuel to the fire by revealing that dead farmers are among those to have collected six figure subsidy payments made as a result of systematic errors at the US Department of Agriculture. Cohen’s Post colleague Dan Morgan, now at the German Marshall Fund and soon to be a guest blogger at CAP Health Check, argues with a dose of optimism that there are still some big hurdles to jump before the current House bill becomes law. According to Dan, the current bill is even less WTO compliant than the 2002 Farm Bill and is likely to ring alarm bells with budget hawks in the US Senate.

Europeans are so expert at getting comfort from the misfortunes of others that we even have a word for it. But there is no schadenfreude here, only the sober observation that it’s not just in Europe where good people who want to see a farm policy that is less about enriching big businesses and wealthy individuals and more about improving the food we eat, the quality of life in rural areas and the protection of our countryside landscapes have a hard time overcoming narrow, powerful and politically ruthless farming lobbies.

A couple of weeks ago Michael Pollan, a New York Times journalist and professor at UC Berkeley – my own alma mater – held an evening ‘teach in’ on some of the high profile issues surrounding the farm bill: subsidies, nutrition, the future of family farming, organics. Ken Cook, President of the EWG, gave a brilliant presentation and thanks to the miracle of high definition webcasting, you can watch it too. (Ken starts at around the 50 minute mark). Ken demonstrates the inequity and unfairness of federal farm subsidies and also takes on the growing suspicion about ‘industrial organic’ farming by arguing that for most of America, the problem is not ‘big organic’ but ‘no organic’. A particularly priceless moment is when Ken gets the 700 members of the audience to chant in unison, “I am a farm bill loser” while holding their hands in front of their foreheads, teenager style. Ken is on top form and as ever, his talk is as entertaining as it is informative. Enjoy!

If you want to follow the debate in the US, there’s no better place to start than Keith Good’s daily roundup of farm policy news, over at FarmPolicy.com. And if you want more Ken Cook (and how could you not?), he maintains a blog at MulchBlog.com.