ALAN MATTHEWS,
Madam, - The EU has been the driving force to date behind the Doha Development Round of WTO trade negotiations. These negotiations have an ambitious schedule which foresees an agreement by January 2005. The WTO Ministerial Council meets in Cancún, Mexico, in September next year to review progress at mid-term in the negotiations.
Although these trade negotiations are the most comprehensive ever in terms of their scope and coverage, the crucial issue remains agriculture. The agricultural negotiations face an important deadline in March 2003 when the broad parameters of an agricultural trade liberalisation package are meant to be agreed. Although the EU made a progressive offer on market access for manufactured goods earlier this month, it has failed as yet to table its proposals for agricultural trade.
Divisions between the member states mean that the EU is negotiating under a three-year old mandate. Unless the EU can make an offer which meets the reasonable expectations of developing countries in particular, this round will collapse. It is already getting perilously late.
Ireland has much to gain from clearer and improved WTO trade rules. However, there seems little realisation among political leaders or the social partners that agriculture holds the key to a deal. Press reports this week point to the failure of leadership. Mr Tom Parlon, for example, defended the continued use of subsidies to export Irish cattle in the face of European Parliament demands that these subsidies be cut. The dairy industry met with Commission Fischler on November 29th to lobby for higher export subsidies for dairy products as the solution to its income problems.
Subsidising agricultural exports to the detriment of our trading partners is no longer an acceptable practice. Once started down the subsidised road, it appears that only larger and larger subsidy injections can keep the patient alive.
Irish agriculture needs clear thinking on how it should face the challenge of farming in a more market-oriented world. A commission should be established to map out the necessary strategy to help it prepare to operate in a less-subsidised environment. Crucially, farm and food industry representatives must be a minority on such a commission as otherwise it will become just another lobby forum for greater supports. Time is running out.
As the taxi drivers discovered, it is better to prepare for change than to have it forced upon one.- Yours, etc.,
ALAN MATTHEWS, Jean Monnet Professor of European Agricultural Policy, Department of Economics, Trinity College, Dublin 2
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Madam, - You report (November 27th) that Irish dairy interests will press the EU to increase supports for exports.
Unfortunately this means that Irish dairy interests will press the EU to do more damage to the small farmers in the developing world and to use EU consumers' and taxpayers' money to do so.
For example, in Jamaica local processors are turning to cheap subsidised milk powder from the EU. As a result, local dairy farmers are giving up production because they cannot compete on price with the subsidised EU product.
In India the dairy sector includes a network of co-operatives serving more than 10 million farmers in over 80,000 villages. They are trying to export to the growing markets of south east Asia, the Gulf and the southern Mediterranean. Here they are competing against the heavily subsidised exports of EU milk powder and butter that drive down the prices in these markets.
According to the FAO, EU export subsidies amount to about 60 per cent of the international price in the case of whole milk powder. In the case of butter, the EU subsidies amount to 136 per cent of the world price. No poor farmer anywhere in the world can compete with that.
Irish farmers frequently protest against the price they receive for their products, but export subsidies drive down the prices paid to poorer farmers in developing countries.
EU export subsidies and other forms of export support should be phased out as soon as possible. Irish dairy interests should stop pushing for policies that will inflict more misery on the developing world. - Yours, etc.,
JIM MURRAY, Director, BEUC, the European Consumers' Organisation, DERMOTT JEWELL, Chief Executive, CAI - Consumers' Association of Ireland, COLIN ROCHE, Advocacy Executive, Oxfam Ireland, TONY LONG, Director, WWF European Policy Office.