Abolish price support, reform CAP

9 May 2000

‘Abolish price support, reform CAP’

By FWi staff

AN influential think-tank has called for the abolition of price support for British farmers and the radical reform of the Common Agricultural Policy (CAP).

The report, published by the Institute of Economic Affairs, was co-authored by Richard Howarth, a well-known British agricultural economist.

“Free-market agriculture would be perfectly feasible for British farmers,” he said.

“It would return to British consumers the freedom of choice to purchase their food from the most efficient sources all over the globe.”

Dr Howarth would like to see agricultural policy repatriated to national governments. Farmers could be subsidised if spending was not linked to production and did not distort trade.

The reports other co-author was Robin Johnson, formerly a senior civil servant in the New Zealand Ministry of Agriculture.

Dr Johnson said that considerable progress was made following New Zealands unilateral abandonment of price support for agriculture in 1984.

New Zealand has already shown the way forward, he said. Agricultural productivity has improved and economic growth has been stimulated.

Farmers adapted to changed market conditions.

Output of sheep products declined, but cattle products, dairying and forestry expanded and new sources of income appeared.

Dr Howarth sees pressures now building for reform of the CAP.

In his view, the “most sensible” route would be to follow New Zealand – indeed, it is the only decision which makes “economic sense”.

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