EU criticises US farm bill

In a May 1st press release, EU Agriculture Commissioner Fischler criticised the new US farm bill as an unfortunate development, pointing out that 'at a time when all developed countries have accepted the direction of farm support away from trade and production distorting measures, the US is doing an about turn and heading in the opposite direction'. The Commissioner pointed out that as a result of the new bill the 'US WTO ceilings for production distorting expenditures will be breached'. Commissioner Fischler argued that the new US farm bill would result in over production and 'act as hidden export subsidies and depress domestic prices to block out imports'. Commissioner Fischler contrasted the US policy with the EU policy which, he argued, was reducing production distorting support and increasing the focus on 'food safety and quality, rural development, and environmental services for society at large.' Comment: The current dispute with the US highlights the dangers posed to ACP agriculture under the various reform programmes under way in the EU and the US. Commissioner Fischler, in condemning the US policy, chose his words carefully. EU policy is reducing what it terms 'production distorting support', that is to say aid to price support and is increasing less trade distorting forms of aid (direct aid to farmers) and aid to rural development (including financial assistance to greater value added processing). However in the sector where this is most advanced (cereals) this has not reduced EU production. On the contrary, despite an average 50% decline in cereal prices EU production of cereals has increased around 26%. Thus even the shift to less production distorting forms of aid has led to significantly larger volumes of EU production than one would expect. If, against this background, the US is increasing production distorting forms of aid, this can only be disastrous for those commodities on which ACP countries depend for exports and in which the US has a production interest.In a May 1st press release, EU Agriculture ..