The revelation yesterday that the EU was planning to offer to eliminate its agricultural export subsidies in an attempt to revive progress in the Doha world-trade round may not be all it appears to be. Astute readers of my post yesterday on China’s global impact may have noted the following:
“In the first place the Common Agricultural Policy, whose funds have long been directed to supporting farmers from prices which were considered to be too low, may find them increasingly committed towards protecting urban consumers from the consequences of world foodstuff prices which are considered to be too high. In the process the whole debate about farm subsidies may take a new and unexpected turn”.
Believe it or not I actually wrote this before the announcement. If this is right, the new and unexpected turn is not a matter of generousity, but of a changed reality (like half-empty grain silos across the planet). Cancelling subsidies may be no great sacrifice since there may not be too many to cancel: the CAP fund allocation can be eaten-up keeping the price of bread and other staples down.