EU Common Agricultural Policy is still distorting the market

25 July 2008

EU Common Agricultural Policy is still distorting the market

Albert-Jan Maat, President of the Dutch farmers' union LTO, argues that 'bashing' the European Union's Common Agricultural Policy (CAP) as the source of inequality and hunger in the world makes little sense.(1) Maat praises the CAP's increasingly open character, but in my opinion things are somewhat more complex than that.

by Eric Smaling

The CAP continues, in 2008, to distort the market, but against this must be set the European initiative Everything but Arms (EBA), which extends (almost) free access to the European market to the least developed countries. Since 1st January we can add to this the Economic Partnership Agreements (EPAs), a hotchpotch of binding trade agreements. Case-by-case analysis of the effects of these instruments on hunger and inequality gives no clear picture. Africa, however, lags behind the rest. The import into Europe of products from Africa amounts to just a few percentage points of total imports. In other words, our open markets have not produced much of a response from African suppliers. Rising powers such as Brazil, China and India enjoy advantages of scale: a single policy for a huge acreage, a large population and therefore also a large internal market.

Often the whole agricultural chain is well organised. In soya-producing areas of South America, for example, business activity in the smaller towns is wholly at the service of the sector, including delivery, storage and transport. In South America only two countries are landlocked, in Africa fifteen. A large part of Asia has, thanks to the Green Revolution, torn itself out of hunger and poverty. It was helped in this by the Himalayas, the source of seven enormous rivers. These are just a few demonstrable reasons why Africa is lagging behind Asia and South America, and they can lead to only one conclusion: that in Africa investment must be directed towards regional market development, in roads and railways, in seed for sowing and in soil fertility, and in improving the coordination of supply and demand between town and countryside. The regional economic blocs in Africa are of sufficient extent for this, both in hectares and in population numbers. What these regional organisations need is their own CAP, including market protection. The elimination of mutual tariff walls would ideally then go hand in hand with a growing agricultural sector. Who is better placed to help them to this than the European Union, possibly in combination with the African Development Bank? My hope is that the Ministers for Agriculture and for Development Cooperation will quickly put this at the top of the Brussels agenda.

Eric Smaling is Professor of Sustainable Agriculture at the Enschede/Wageningen Technical University and sits for the SP in the Senate.

This article was originally published in the daily newspaper Financieele Dagblad on 25th July 2008.

(1) Maat's article appeared in Financieele Dagblad on 17th July.

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