Oxfam warns on Euro farming budget shake-up

The EU budget summit in Brussels is the last chance to shake up European farm spending for a decade, Oxfam warned.

On the eve of a crucial gathering of EU leaders to hammer out European spending for 2007 to 2013, the organisation backed British Prime Minister Tony Blair’s call for a swift review of a Common Agricultural Policy (CAP) that absorbs 42% of the entire annual budget of €103.3bn a year.

France, which gains €8.9bn a year in CAP subsidies, has flatly rejected any reform as part of a new budget deal, at least until 2014.

The issue is at the heart of the budget summit row, because Mr Blair says the unfairness of the CAP is the reason why Britain has to keep its annual rebate on its EU contributions.

Reform the CAP and reform of the rebate could follow, says Mr Blair.

Oxfam says the CAP is not just unpopular in the EU but also across the globe and is a sticking point in current world trade talks in Hong Kong.

Oxfam’s Luis Morago said: “Never before has there been such universal condemnation of the CAP from Brussels to Hong Kong.

“CAP has now become a byword for inequity and European leaders must not pass up this chance to agree a full-scale revamp of the farm-payment regime.

“Failure to do so would sentence small farmers in Europe and the developing world to another nine years of misery“.

Oxfam argues that without summit agreement on CAP change, a root-and-branch reform will not be possible until at least 2014, when the next EU budget package for 2014 to 2020 is due.

Oxfam is backing Mr Blair’s budget proposal for a 2008 CAP review, arguing that a review only two years ago failed to properly address the issue of the redistribution of subsidies in Europe or the dumping of cheap EU produce on developing countries.

Luis Morago said: “Europe must show leadership, agree to fundamental reform of CAP and send a clear message to negotiators at the WTO in Hong Kong that it is serious about agricultural reform.

“If this moment is lost the EU will be not only be failing the majority of farmers in its own backyard but continuing to harm poor country farmers and driving millions deeper into poverty.

“We need CAP reform that ends dumping, promotes rural development and environmentally sustainable farming in Europe.”