10 June 1999
US blasted over farm reform

By Philip Clarke

US POLICY makers were accused of hypocrisy today after criticising the European Unions limited reform of the Common Agricultural Policy (CAP).

The US had criticised the CAP reforms while doling out $6bn in emergency aid to its own producers, said Guy Legras, head of agriculture at the European Commission.

Mr Legras also defended the EUs grain export subsidy system in front of delegates at the International Grain Council conference in London.

The taxes were no more trade distorting than the USs own marketing loan system which had kicked in this season in response to falling prices, he said

These loans covered 80% of the US wheat crop and 60% of maize enabling growers to survive despite lower world prices.

They too helped maintain farmer income, encouraged crops which would not otherwise be grown, and similar in effect to the EUs export subsidies, said Mr Legras.

I know there has been a crisis of farm income in the US, but it was modest and has followed two years of exceptionally high prices, he said.

His comments followed complaints from the US that export subsidies still covered 25% of the world wheat trade.

Washington has made it clear that the subsidies are at the top of its hit list for the forthcoming round of World Trade Organisation talks.

They must be eliminated Richard Rominger, US deputy secretary of state for agriculture, told the conference.

Mr Rominger criticised Agenda 2000, saying it would leave the EU with no option but to continue using export subsidies to clear the market of surplus grain.

This would be a real block in the continuum toward trade liberalisation, he said.