Preserving EU agriculture without trade barriers

Speaking in Japan Commissioner Fischler argued that protecting EU farmers need not mean protecting EU markets. He argued that the EU agricultural system could be preserved without trade barriers. He picked up in summary form many of the key themes underpinning the CAP mid-term review, explaining how the EU was moving from supporting production to supporting producers, with the percentage of the EU agricultural budget spent on market support falling from 91% in 1992 to only 28% in 2002, and with direct aid-payments to farmers now accounting for 63% of EU agricultural expenditures. Significantly Mr Fischler acknowledged that direct payments stimulate the quantity produced and indicated that in the next stage of reform the EU wanted to move to stimulating quality not quantity. This is what lies behind proposals to expand the percentage of agricultural financing deployed through the EU's new rural development policy tool. Through this tool the EU rewards farmers financially for the wider services they provide to society. With the move to wholly de-coupled farm payments, he maintained that the EU would 'show that it is possible to support farmers without any effects on international trade'. He highlighted how this process of reform was fuelling a large expansion in EU processed-food product exports (doubling in 10 years), with a high potential for further growth in this sector. According to Commissioner Fischler a key element in realising this potential is ensuring food safety and higher food quality. Comment: It should be noted that this vision of an EU agriculture without trade barriers is on the basis of much lower internal EU prices, with EU farmers being compensated for these lower prices by payments for the provision of wider services to society. However, to the extent that these payments to farmers for societal services mean that EU farmers do not have to recoup their full costs of production from the final sale price, these measures will still affect EU production decisions and trade flows.Speaking in Japan Commissioner Fischler argued that protecting EU..