23 January 1998

NFU report looks at challenges and chances in years ahead

By Shelley Wright

A NEW NFU discussion document, Taking the Lead: Preparing European Agriculture for the 21st Century, has been released.

Deputy president, Tony Pexton, told union council that the report, compiled by a working group which he chaired, embraced the inevitable changes that would occur in the coming years. It took the lead in preparing British and European agriculture for the challenges and opportunities of the next century, he said.

After examining the nature and extent of the pressures on agriculture from the World Trade Organis-ation obligations, and how those might develop due to the next WTO round, the group then tackled the extent to which the Agenda 2000 CAP reform proposals addressed those pressures, and what further changes might be needed.

The group concluded that:

lA clear vision of how EU farm policy should develop was needed before the next WTO round, which begins in 1999.

lThe EU commission should be given authority to negotiate at the WTO talks without having to refer back at every stage to Europes farm ministers.

Furthermore, the report highlighted that intervention price cuts for beef might be needed before 2000, the date proposed by the EU commission, and that cuts in dairy support of more than 10% would be needed.

Under the last GATT deal, about 21bn ecu of EU farm support was protected from cuts until 2003 by being placed in the "blue box". If that could not be renegotiated, or the subsidies altered to make them compatible with the "green box", then in 2004 about 8bn ecu of cuts would be needed.

Further cuts of up to 2bn ecu would be enforced each year, leaving the possibility of a two-thirds cut in existing domestic farm subsidies being imposed by 2009.

The best solution would be to get as much farm support as possible transferred to the green box, where payment are protected from cuts. But, Mr Pexton said, the criteria are strict. Payments must be non trade-distorting, so must be decoupled from production.

While Agenda 2000 addressed many of the constraints now coming through as a result of GATT, it did not go far enough to meet the challenges of the likely outcome of the next WTO round.

"So we could face another round of CAP reform at the conclusion of the WTO talks," Mr Pexton said. &#42

Tony Pexton:New report tackles the inevitable changes that will occur in the coming years.