Cut soya subsidies or else, USA told

By FWi staff

EU OILSEED producers are threatening to take the USA to the World Trade Organisation in Geneva unless subsidies to soya bean growers are cut.

Speaking at the launch of the new European Oilseeds Association (EOA) in Brussels, chairman, Xavier Beulin, claimed that the rapid increase in US aid had led to a 25% expansion of the area sown to soya since 1998, and a consequent collapse in world oilseed prices.

“Deficiency payments and emergency aid for oilseeds represent about $3 billion. With other types of direct subsidies, 67% of the value of oilseeds is represented by public assistance,” said a statement.

According to Rad Thomas, vice-chairman of EOA, area aid in the EU has been falling and now accounts for less than a third of the oilseed crop value.

This has led many producers to abandon the sector, leading to a 10% drop in output since the launch of Agenda 2000.

Mary Ellen Smith, of the US trade mission in Brussels said: “All the aid we have paid is within the rules laid down under the Uruguay Round.

“Figures from the Organisation for Economic Co-operation and Development, a much less biased source, show EU oilseeds producers get 30% of their income from subsidies compared with 25% in the US.”

Output had only declined in the EU, she said, because growers had exceeded the Blair House maximum guaranteed area in both 1998 and 1999, triggering area aid cuts.

Blaming the US for weak markets was “quite comical”, she added.

But the EOA says something must be done to improve oilseed profitability in the EU.

With production now some 500,000ha below the Blair House maximum guaranteed area, there is scope for increasing aid, said Mr Thomas.

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