Restoring the European balance

Confi, rence r~7~orls as was the issue of pesticides and their residues in food. Both are important issues, but again there was too little on integrated pest control - although a greater degree of biological control and lower use of chemicals would clearly reduce residues. A further conference is planned for Barcelona in December 1988. The lesson of Geneva 1986 is that it would be well worthwhile attracting more people who are working at the sharp

end, whose daily task is trying to make integrated pest control work on the spot. A great deal of learning about natural methods of pest control has to be done by the people of the chemical industry if they are to come up with the integrated pest control ideas that make sense.

John Madeley Reading, UK

Restoring the European balance Conference on The Future of Agriculture in Europe, organized by the 'Club de Bruxelles', Brussels, Belgium, 5-6 November 1986 The E E C ' s Common Agricultural Policy has become the butt of criticism worldwide. When it came into being 25 years ago, the idea was to create stable and secure food supplies for six European countries with a food deficit. Since then, both production and productivity have outstripped all expectations and the CAP has become a victim of its own success. Today the E EC' s overriding objective is to dispose of huge surplus food stocks, including 13.2 million tonnes of cereals, 1.4 million tonnes of butter, 900 000 tonnes of skimmed milk powder, 630 000 tonnes of beef and 264 000 tonnes of olive oil that have accumulated in public intervention stores at the taxpayer's expense. This was not the original aim of the CAP - a policy created to raise agricultural productivity, give farmers a fair income, stabilize agricultural markets and guarantee secure food supplies. So, what has gone wrong'? Who is to blame? How can the CAP be released from the stranglehold of surpluses and recurrent budgetary crises'? This was the main discussion topic during the conference on the Future of Agriculture in Europe, organized by the 'Club de Bruxelles '~ in Brussels on 5-6 November 1986, which brought together 400 experts from the farming world, industry, E EC institutions and professional circles. The growth of E E C agricultural production coupled with stagnating demand for farm products has inevit-

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ably led to major leaps in selfsufficiency levels for most key commodity groups. The EEC is now 131% self-sufficient in butter, 142% for skimmed milk powder and a record 361% for whole milk powder, 141% self-sufficient in sugar, 124% for wheat, 111% for poultrymeat and 104% for beef. For wine, vegetables, pigmeat, eggs and potatoes, selfsufficiency levels are around 1(t0%, the conference was told.

High price But the Community has had to pay a price for breaking out of its earlier food deficit. The book value of stocks held in public storage has risen to around 12 billion Ecus (£8.7 billion) from four billion Ecus four years ago. Ironically, whilst EEC expenditure on agriculture is increasing, farmers" incomes are falling and EEC support mechanisms are being gradually trimreed back. Since 1973, EEC farm spending has increased in real terms by 77%, while final agricultural production has risen by only 20% and the agriculture sector's net value added had fallen markedly. 'In some sectors, structural surpluses now dictate the need to control our production and farm spending', E E C Agriculture Commissioner Frans Andriessen told the conference in his opening speech. 'The surplus in the dairy sector is not justified in any circumstances . . . we must produce for the market and not

fl)r intervention, denaturing or destruction.' The cause of the present crisis, he added, lies in the fundamental imbalance between supply and demand worldwide. The balance can only be restored via concerted reforms of national agricultural policies of both exporting and importing countries. "A coordinated approach at international level to reduce agricultural surpluses is quite feasible whilst maintaining the instruments and principles of the CAP and USA farm policies', the Commissioner said, stressing that adjustments to national agricultural policies must go hand in hand with the negotiations on agriculture within the New Round of G A T T multilateral trade negotiations. The 'Uruguay Round' is essential to stop the vicious circle of global surpluses, according to Daniel Amstutz, Under Secretary for International Affairs at the US Department of Agriculture. The New G A T T Round must impose strict controls o n agricultural subsidies, halt the trend towards protectionism and improve dispute settlement procedures. Both Amstutz and EEC Commission representatives agreed that the New G A T T Round would be a landmark for agriculture. But Amstutz warned that the EEC and USA must first resolve their bilateral differences. This prompted affirmations from Michel Jacquot (adviser to EEC Commission President Jacques Delors) that the Community was not to blame for world agricultural surpluses and accusations that the US Bonus Incentive Commodity Export Program (BICEP) was guilty of providing export subsidies that led to price undercutting on external markets. US Farm Bureau President Dean Kleckner pointed out that the 1985 Farm Bill recognized that the US could not cut production alone. The rest of the world has to do its bit hence BICEP. Market shares must be determined by comparative advantage and a policy of self-sufficiency is not compatible with this notion, Kleckner concluded. Turning to the choice of priorities for the CAP, Carlo Trojan, Andriessen's head of cabinet, said that if prices were better adapted to markets,

FOOD POLICY May 1987

Conference reports/Book reviews money could be better spent. But the problem is not merely financial, JeanClaude Pasty, a M e m b e r of the European Parliament, stressed. He pointed out that the entire E E C Budget represents less than 3% of the budgets of the 12 M e m b e r States and the C A P accounts for less than 2%. Yet it does not fulfil the task of ensuring a fair income for farmers and the sole objective of reform should therefore not be to cut expenditure. "The C A P cannot simply be defined in budget terms', the Secretary-General of the French farmers" union F N S E A told the conference. Reform of the C A P as proposed by the Commission will neither ensure a satisfactory income for farmers nor give them any leeway to prepare for the future. Sir Richard Butler, President of the C o m m i t t e e of Agricultural O r g a n i z a t i o n s in the E E C ( C O P A ) agreed, warning that farmers would only be willing to adapt provided that the survival of the rural community was not endangered and their incomes were not squeezed any further. Alternative crops should be found and land conservation efforts rewarded. As regards the constant threat of

the C A P becoming renationalized, all the speakers o p p o s e d this trend, arguing that d i f f e r e n c e s b e t w e e n M e m b e r States and regions must be removed in order to create a true c o m m o n market. Adolfo Pizzuti of the E u r o p e a n Commission said there was no real danger of renationalization as it was unrealistic to imagine a return to national policies that would compromise the achievement of" the Con> munity's political objectives. Wholesale renationalization of the C A P would be a backward step, the conference concluded. A forward step would be to supply more cheap raw materials, preferably at world market prices, to industry to exploit new industrial outlets being opened up by the application of modern b i o t e c h n o l o g y . This was the general argument voiced by representatives of agri-food companies, the chemical industry and scientists on the second day of the conference. The problems facing E u r o p e a n agriculture can be solved by using its surpluses for industrial purposes (bio-ethano[, starch p r o d u c t s , p h a r m a c e u t i c a l s , plastics, etc). Raul Gardini, Chairman of the

giant Italian Ferruzzi group, told the conference 'agriculture would thereby play a double role of satisfying the need for food and supplying industry with cheap raw materials'. But before this agro-induslrial rew~lution can take place, E E C prices must come down. A n d that is just what E E C farmers cannot accept.

Amanda Ellerton Europe Information Service and European News Agency Brussels Belgium

1The 'Club de Bruxelles' is a private organization set up in 1985 by the Brussels-based Europe Information Service and European News Agency and a number of other press and information agencies specializing in European Community activities. The Club aims to stimulate open debates between experts on European integration on major European themes, without political or professional bias. Further information and copies of the studies prepared for the conference on 'The crisis in European agriculture' and 'Biotechnology and European agriculture' are available from the Club de Bruxelles, 10 Rue du College Saint-Michel, 1150 Brussels, Belgium.

Book reviews Partial success in looking at grain THE I N T E R N A T I O N A L GRAIN TRADE: P R O B L E M S AND PROSPECTS by Nick Butler

Croom Helm, London, 196 pp, £25. O0

UK, 1986,

For any newcomer to the international grain trade, this book provides a useful introductory coverage of some of the current salient developments in that trade and the major actors in it. Refreshingly, right from the first page, it draws out some of the political factors that have had such an impact on this trade and does not eschew the political, economic and commercial i n t e r l i n k a g e s that h a v e b e e n so

FOOD POLICY May 1987

marked in it in recent years. The use of food as a political weapon still continues in different forms, although not so much in the blatant forms used by Kissinger or Carter. The aim of the book is to be 'part description, part forecast and part prescription'. It partly succeeds in all of these. On the export supply side, it mainly concentrates on the U S A and the E u r o p e a n C o m m o n Market countries, and the trade competition between them in the current oversupply circumstances, that has also contributed to the lack of progress towards any effective Global Grain Trading Agreement, or even any substantial regulation of the trade. It highlights the trend in these countries towards a concentration of ownership (eg in the

U S A the largest 25% of farms now account for 85"/,, of the sales of grains) and more capital intensive production. C u r r e n t o v e r p r o d u c t i o n and low world market prices are resulting in greater efforts to limit production or expand export markets in competition with other suppliers.

Cushioning The nature of the "democratic" systems in these countries, and the political demands of the farming communities and major producers, has meant that governments have often been under pressure to cushion producers and balance urban/rural incomes, sometimes at considerable economic cost. In recent years, grain exports have constituted on average about 12"/,, of total US exports, giving them a significant individual importance in US balance of p a y m e n t s considerations.

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