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European Union votes to reform agricultural policy

(Friday, June 27, 2003 -- CropChoice news) -- Thomas Fuller, NY Times: BRUSSELS, June 26 — Fourteen of the European Union's 15 governments voted today to overhaul their $49 billion common agricultural policy. And they challenged the United States to match what officials called their "historic" reforms. Only Portugal voted against the new rules.

Emerging from 16 hours of negotiations, officials said they had agreed to a new system that would reduce subsidies to wealthy farmers and impose stricter environmental standards. Food production would also be cut back.

Soon after the deal was announced in Luxembourg, Franz Fischler, the chief architect of the reforms, challenged the Bush administration, which last year announced it would increase farm spending by $170 billion over the next decade, to enact its own reforms.

"There are a lot of schoolmasters who have been telling us that we have to do our homework," Mr. Fischler said, referring to American criticism of Europe's farm subsidy program. "You should practice what you preach."

The reforms do nothing to change the European Union policy of subsidizing the sale of food on world markets. That means, experts and activists said, that farmers in poor countries will still find it difficult to compete with cheap sugar, wheat and cotton from Europe as well as the United States.

"Farmers will continue to produce more than we need and will continue to dump it on the developing world," said Sam Barratt, a researcher at Oxfam, a British charity and activist group.

The common agricultural policy, which began four decades ago, currently subsidizes farmers on the basis of the crops they grow and the amount they produce.

Under the new system, farmers may still choose what and how much to grow, but their subsidies will be indexed to payments from previous years. Growing more food will not automatically earn them larger earnings.

Subsidies to large farms will be cut back and the money saved will be used for "rural development projects." Farmers' payments will also depend on how well they treat their animals and on environmental criteria.

The World Wildlife Federation, an international environmental group, characterized the environmental provisions of the reforms as "two steps forward, one-and-a-half steps backward." In a statement, the group called the funds dedicated to rural development inadequate and predicted that the plan to encourage more environmentally sound farming would not work.

Talks on reforming agricultural policies began last summer and were mainly supported by Britain, the Netherlands and other northern European countries.

Until last week France, considered the chief beneficiary of the program, fiercely opposed the reforms. Analysts said that France had agreed to the deal only after winning concessions on protection for wheat farmers.

Reforming the program was seen as a necessary step before the European Union grows to 25 members next May. Poland, one of the new entrants, has more farmers than France and Germany combined. The reforms were also considered a prerequisite for progress on global trade talks.

Members of the World Trade Organization are scheduled to meet in Cancún, Mexico, in September, to discuss agricultural issues.

"What is the United States ready to put on the table?" Pascal Lamy, the European Union's trade commissioner, asked today, anticipating the meeting.

"The reform gives me a very useful credit line in negotiations," Mr. Lamy said. "But I can't use the credit unless others put concessions on the table."

Mr. Fischler agreed. He said it was now up to other developed countries to reform their farm programs. After the European Union, the United States and Japan spend the most to support their farmers.

"These reforms send out a clear signal to our trade partners worldwide," Mr. Fischler said. But he warned, "We are not going to throw our markets wide open."