Reports urge abolition of EU farm subsidies

European Union agricultural export subsidies and direct support for farmers should be abolished over time, according to two reports published today.

One, written by a committee of the British House of Lords, the upper house of parliament, calls for future agricultural funding to be focused on the new, less-developed member states and for direct payments to farmers to be phased out from 2013.

The other report, from the international development charity Oxfam, says that rich countries have been side-stepping commitments to cut agricultural subsidies in world trade negotiations.

It calls for Europe and leading countries to end subsidising agricultural exports by 2010, to reduce payments to farmers that distort trade and to recognise the right of poor countries to protect sectors so long as dumping continues.

Both reports urge much more radical action to cut expenditure on the Common Agricultural Policy (Cap) than envisaged by the EU.

Lord Renton of Mount Harry, chairman of the House of Lords inquiry, said: "Farmers in new member states need help modernising and restructuring their antiquated farms.

"But direct payments to farmers should be phased out from 2013. Such payments should only be seen as transitional tools to prepare farmers for a market-focused future for European agriculture."

The committee concluded that the European Commission should make clear to member states that, under current budget negotiations, payments to farms would have to dwindle between 2007 and 2013 and should be phased out thereafter.

Instead, it proposed that a separate environmental fund be set up to reimburse farmers for the "non-production benefits their activity brings to society".

According to Oxfam's report, rich countries have been redefining rather than reducing subsidies at the World Trade Organisation. It claimed that farm support in developed countries had not changed in real terms since 1986, and still stood at more than $250 billion (€207.74 billion) per year among all rich countries.

Calling for a fundamental reform of the Cap, Jo Leadbeater, head of advocacy at Oxfam, said: "The Cap lavishes money on some of the biggest, richest farmers in the EU and, at the same time, denies farmers in the developing world the chance to work their way out of poverty."

Tony Blair, the British prime minister, reiterated his support for Cap reform yesterday but Jacques Chirac, the French president, rejected any such changes.