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How the CAP could save 175 billion Euros

Belgium - 04/02/2013

Greet Goverde-Lips, secretary of Platform Aarde Boer Consument writes: Any day now EU politicians will fix the European budget for the next seven years. The Commission aimed for 1,000 billion euros. Agriculture accounts for about 40% of the budget, and about half of that goes to income support for farmers. With a different agricultural policy that yields cost-covering prices farmers would no longer depend on subsidies. That would save 25 billion euros a year; 175 billion in seven years.
The budget allocations for European agriculture are considerable. They have continued to rise steadily on aggregate, despite the many inefficiencies pointed out by many commentators. Click here to see the figures in a table.
The agricultural policy in the EU is currently in the liberalisation mode. Farmers in the EU have to compete with colleagues from all over the world, even though production costs in some countries are much lower; the playing field is not level at all. Without additional income from the EU budget farmers would go bankrupt. Leaving the food production for half a billion Europeans to faraway and maybe not very sustainable countries is not an option.
When we don’t keep globalising but start regionalising – producing primarily for our own market – a lot of money from the agricultural budget can be freed for other purposes. This seems unrealistic but it isn’t. Countries that restrict their supply to domestic demand can protect their farmers by means of tariffs up to the level they have agreed on in the WTO, and that is what countries like Norway and Switzerland (and Canada for dairy, eggs and poultry) have been doing for years. In Canada for instance they have not bothered about the free market ideology in agriculture, knowing that it doesn’t suit agriculture anyway. So the system of regulating the agricultural market has been fine-tuned in the course of the last 60 years and works very well. There government and producers decide together in Marketing Boards about the quantity and quality of basic products. The processing and retail sectors can join in the talks but don’t have the last say, as in Europe. The result is that farmers get 54% of the supermarket price for their milk, whereas they get only about 30% in the Netherlands.

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