Michael D. Higgins
Question:33 Mr. M. Higgins asked the Minister for Agriculture and Food his views on the impact of subsidies on agricultural products for developing countries; and if he will make a statement on the matter. [14003/03]
Written Answers. - Common Agricultural Policy.
I am aware of certain concerns regarding the impact of the common agricultural policy on developing countries and I am sympathetic to the needs of these developing countries. However, it should first be noted that changes have been implemented in the common agricultural policy to significantly reduce trade anomalies and these changes have brought about a system of direct payments, which are acknowledged as being less trade distorting. The overall EU support – Producer Support Estimate – for agriculture has decreased from 42% in the period 1986-88 to 35% in 2001 and under the Uruguay Round Agreement, the EU has already reduced its ceiling of expenditure on export refunds by 21% in terms of the quantities subsidised and by 36% in budgetary outlay. EU export subsidies are becoming less and less significant and in 2001 they amounted to €2.763 billion compared to €10 billion in 1991. Ireland supports the EU mandate in the current WTO negotiations whereby the EU is prepared to negotiate, under certain conditions, further reductions in export refunds.
We must also recognise that in 2002 EU direct payments to Irish farmers accounted for 69% of Irish aggregate farm income and that transfers from the EU totalled €1,903.4 million euro in 2002. Therefore Ireland has a significant national interest in the CAP.
Although there is much criticism of the CAP, the facts are that the EU as a whole operates a more favourable agricultural trading system with developing countries than other trade blocks and special and differential treatment for developing countries is an essential element of the EUs position in the WTO negotiations. The EU imports more farm products from developing countries than the US, Japan, Canada, Australia and New Zealand taken together. It is the largest importer from least developed countries and has introduced the "Everything But Arms" programme, which gives the 49 poorest countries immediate duty and quota-free access to EU markets with the exceptions of bananas, sugar and rice where transitional arrangements apply.
It should also be remembered that EU subsidies are not the only issue for developing countries as these are not a homogenous group. Their needs should be carefully examined on a case-by-case basis. Many are net food importers who have concerns that in the absence of export subsidies they would not be able to source imports.