Lamy endorses EU farm vision

Addressing a conference in Paris on the future of European Agriculture, EU Trade Commissioner Lamy argued that 'farming is not an industry that can be abandoned to the tender mercies of market capitalism', since profit maximisation can have 'consequences that are unacceptable to our communities'. What is more, as Commissioner Lamy acknowledged, 'if farming has to go by the principle of the international division of labour, five million of Europe's six million farmers would go to the wall'. For Europe 'that is not acceptable'. As a consequence, according to Commissioner Lamy, the CAP should aim to compensate farmers for the services they provide which are not rewarded through the market. Overall the challenge faced is seen to be one of 'adjusting the policy mix to the desired outcomes and constraints'. One of the desired outcomes is to 'support incomes without artificially stimulating production'. This can be achieved through 'paying farmers direct income support 'de-coupled' from .. production levels or reference prices.' The Commissioner however warned that such a system had two main draw backs: by de-linking income from production it could lead producers to neglect quality considerations; it could lock in existing patterns of production. A further important policy objective according to Commissioner Lamy is ensuring maintenance of farm incomes without stifling farming initiative. In order to address this issue the CAP needs to reward quality - hence the introduction of cross compliance. A further policy challenge outlined by Commissioner Lamy is to avoid over-regulation, given the competing objectives being pursued. He also emphasised the challenge of finding a policy framework which accommodates the diversity of European agriculture, which he felt was a challenge which should not be underestimated. Against this background the mid-term review proposals were simply an extension of the ongoing trajectory for CAP reform and by no means represented a revolutionary change. Turning to the external dimension Commissioner Lamy highlighted how reform, although driven by internal considerations, could nevertheless earn the EU negotiating credit in international fora, by making agricultural trade liberalisation easier to implement. Comment: Ironically while Commissioner Lamy argues that farming can not be abandoned to the tender mercies of the market , this is precisely what the Trade Directorate is trying to promote for developing countries. In the case of the EU-South Africa Trade, Development and Co-operation agreement the EU secured the elimination of tariffs on 83% of current EU agricultural exports, a development which has serious implications for four ACP members - Botswana, Namibia, Lesotho and Swaziland. In addition while Commissioner Lamy claims that the emerging system of de-coupled payments will not artificially stimulate production, the experience in the cereals sector suggests that this is not the case, with EU cereals production having expanded 18% under the impetus of reform.Addressing a conference in Paris on the future of European..