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Copyright © 2001 Eastern Ontario Farmers Forum Inc. All Rights Reserved

Canada has head-in-sand ag policy

John Phillips
Farmers Forum columnist

Now is the time to take a hard look at those European Union (EU) governments promising to slash spending on subsidizing their farm exports. It’s part of an attempt to persuade trade partners to lower barriers in other industries at the World Trade Organization.

The move comes from European foreign ministers. With little fanfare they back a EU plan calling for average reductions of 45 per cent in export subsidies, 36 per cent in import tariffs and more than 55 per cent to farmers.These figures were spelled out in an e-mailed commission statement. EU commission spokeswoman Arancha Gonzalez adds that her 15-nation bloc would cut all export subsidies and "phase out completely subsidies for certain products, in particular products of interest to developing countries."

Taken at face value the offer is seen as the answer to most of Europe’s problems. On the other hand, at least 10 of the EU members welcomed the move only after French Foreign Minister Dominique de Villepin quickly persuaded the EU to remove a reference to eliminating specific subsidies on sensitive commodities. Products include wheat, olive oil and oilseeds.

While the U.K., Germany, Denmark, Sweden and the Netherlands welcome the "broad thrust" of the reform package, most of the 15 EU members oppose its main purpose: "to break the link between subsidies and farm production." French farm minister Herve Gaymard argues forcibly that this would lead to "considerable cuts in production in certain regions."

Paralleling this, the EU commission contends it wishes to write farmers a single cheque. This would end the link between what they produce and lessen their dependence on aid such as export subsidies. And Ireland farm minister Joseph Walsh complains the package as "inequitable, unnecessary and not in accordance with EU objectives and internally contradictory."

So what is the upshot? The EU’s pledge to cut spending on subsidizing national food exports faces a major hurdle before the WTO’s ministerial meeting in Cancun, Mexico, four months from now. France, Ireland, Spain and Portugal are rigid, at least by North American standards. Major exporters, whether Australia, Brazil, Canada or New Zealand, accuse both the U.S. and the EU of inflating world prices by subsidizing farm production.

Canada’s position is certainly delicate. Our neighbour to the south now has a strong pro-farmer stand, enhanced by recent President Bush decisions which gave his Republicans majorities in both the Senate and Representatives. This measure is the opposite of Ottawa’s position that enhances the urban standing in both houses.

Whatever happens here, there is little room for manoeuvring. But our farm groups don’t seem to understand what’s at stake, unlike our urban newspapers. The urban media seek cheap food bought with our cheap money, but what’s our own position? And when do our political leaders publicly set agriculture’s standards for non-urban Canada? Or do they just skate in delicate circles, talking aimlessly and quacking in their usual confusion?