[Marxism] agricultural subsidies

Sudhir Devadas sudhirdin at gmail.com
Thu Nov 24 07:50:54 MST 2005

in the context of the ongoing discussion, third world farmers  don't want
their comradely agricultural class in the developed world to be deprived of
the benefit of subsidies, any more than they themselves would like to lose
theirs. but we find it difficult to digest when the beneficiaries of the
state are the likes of:

*Monaco's Prince Albert gets EU farm subsidy of £200,000 *
By Stephen Castle in Brussels 7 November 2005   The Independent

Prince Albert, the billionaire ruler of Monaco, is one of the biggest
beneficiaries of European farm subsidies, it was reported on the eve of a
meeting on reform of EU spending.

Oxfam claims that Prince Albert, who is worth an estimated £1.35bn, received
€287,000 (£194,000) in payments under the Common Agricultural Policy last

The subsidy was for a cereal farm of around 700 hectares. Monaco, only
slightly larger than Hyde Park in London, is overwhelmingly urban and Prince
Albert's farming interests are believed to be over the border in France.

The charity also said that the two biggest French recipients took €1.7m a
year between them. Meanwhile, 70 per cent of small farmers received only 17
per cent of the subsidies.

"France's argument that the CAP is used primarily to support its small
farmers rings hollow," said Jo Leadbeater of Oxfam. "Europe's regime of farm
subsidies goes to the wealthiest landowners and destroys the livelihoods of
poor farmers."

The revelations came as Britain softened its demands for cuts in European
farm subsidies. The Government relaunches talks today on EU finance and the
future of the UK's budget rebate from Brussels.

EU foreign ministers meet in Brussels to discuss a paper circulated by the
UK, which holds the presidency of the EU and which describes the need to
modernise the budget as a "long-term aspiration".

But many EU states see the UK rebate as the main stumbling block to a deal,
and several ambassadors criticised the British position paper last week. One
diplomat said that the document had been "destroyed" in discussions.

Britain helped block a deal in June on the EU's budget for 2007-13, saying
that it would only compromise over the UK's annual €4-5bn rebate if there
were agreement on reform of the Common Agricultural Policy.
The rebate was negotiated by former prime minister Margaret Thatcher in 1984
to compensate Britain for receiving relatively little from the CAP, which
still accounts for around 40 per cent of EU spending.   (more)


another related news item:

 Sugar price reform will lead to ruin, warn poorest countries By Stephen
Castle in Brussels  23 November 2005    The Independent

Some of the world's poorer nations have said they face ruin over reform of
the EU's multibillion-euro sugar subsidies, despite new concessions offered
by the European Commission.

Europe's agriculture ministers were deadlocked last night over far-reaching
plans to slash the guaranteed price paid for sugar by 39 per cent. Poor
countries that rely on preferential access to European markets said that
late concessions from the European Commission to phase in changes would help
EU producers rather than them.

The row illustrated the complexity of efforts to reform Europe's farm
policy, demonstrating how liberalising global trade can produce economic
losers in the Third World and Europe.

Largely unchanged since the 1960s, the EU's sugar sector is one of the last
unreformed vestiges of Europe's Common Agricultural Policy and is widely
criticised for distorting world trade. Sugar has remained notorious since
the EU's price support safety net encouraged a host of countries to enter
the market to tap subsidies.

Only four of the EU's 25 states produce no sugar and about 320,000 farmers
are involved in growing sugar beet, which is subsidised to the tune of
€1.7bn (£1.2bn) each year. Most of this goes on supporting a price nearly
three times that on the world market, and on ensuring the EU is also a net
exporter of sugar, selling about five million tons outside the bloc, as
opposed to its 1.9 million tons of imports.

While those exports hit producers of cane sugar in the Third World, the EU
also props up the industries in its former colonies. Many of the so-called
African, Caribbean and Pacific group of nations have based much of their
economies on preferential access to European markets.

The European agriculture commissioner, Mariann Fischer Boel, yesterday
outlined her ambition to see prices fall by 39 per cent, but proposed the
measures should be phased in over a four-year period starting in 2006 -
rather than the two years originally suggested.

But EU countries including Italy, Spain and Ireland demanded a longer
phase-in and more aid for refineries and farmers who will lose their
production quotas. Greece, Portugal, Slovenia, Hungary, Lithuania and Latvia
demanded further concessions, arguing the reform would destroy their sugar
beet sectors, and threatened to block a deal.

A compensation package of about €7.5bn is on offer for farmers and other
industry companies to get out of the sector.

Riyad Insanally, Guyana's senior trade adviser on sugar, said Ms Fischer
Boel's concessions would help beet producers in Europe rather than cane
growers in the Third World. He argued that an immediate cut in subsidies for
refining would hit cane producers, since processed beet does not undergo

He said: "It is going to be awful in Guyana, we are talking about a country
of 750,000 people with an income of $1,000 (£580) per head. We face a
massive 39 per cent cut, which makes our production commercially unviable.
We are asking for a much more gradual cut over a longer period."

In Guyana, sugar supports the social infrastructure of the rural economy,
enabling education and health clinics to exist. ACP countries say they stand
to lose €300m a year in export earnings and want €100m in financial
assistance in 2006 and €500m per annum thereafter to adapt and diversify.

The current EU offer is €40m for 2006 - though countries such as non-ACP
sugar-producing nations including Ethiopia and Sudan will receive nothing.
Arvin Boolell, Agriculture Minister of Mauritius, warned of the "human
tragedy the reform proposals will cause in our countries".



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