quinta-feira, 25 de março de 2010

Accidental Farmer’s Remarks Bulletin (VII) Sarkozy’s war

Apparently, the heavy defeat in the regional elections convinced the President of the French Republic that rather than a change in tune he had to step up his rhetoric. Whereas in the beginning of the month, in his speech at the “Salon de l’Agriculture” he was ready for a compromise trading less farming budget for more protectionism, he announced yesterday he is prepared to go to war with Europe to rescue agriculture.
Trading farming for protectionism was quite a bad idea, to declare a farming war on Europe might be even a worse one.
Commodity markets – in certain respects like financial ones – tend to be volatile, and, as in many other economic areas, competition in agricultural products tends to be harsh. Agriculture, an activity largely based on family structures, suffers heavily from this situation. If the modern welfare state thought of employment benefits and a large set of social mechanisms to face negative market evolutions, its intervention in farming communities uses different instruments, but aims at similar objectives.
To insulate agriculture from international trade is the oldest and still the most common way to face these situations, an instrument whose scope was slowly but substantially diminished since the end of last century.
The present economic crisis led many in the Western World to have second thoughts on the liberalisation they promoted.
Can we really allow financial institutions to act as they wish only for the tax-payer to pay the bill when their decisions prove to have been reckless?
Does it really make sense to exclude currency policy from the framework of trade negotiations?
Can we consider the Asian economic giants as least developed countries exempted from trade liberalisation in food products and in assuming full environmental and other responsibilities at World level?
Personally, I am far from convinced that our Western leaders gave full attention to these problems or found the best way to address them. In my opinion, we need to consider stricter regulatory frameworks in some cases and more balanced approaches to trade, currency and financial matters in other cases.
However, it does not mean that going backwards is a possible outcome or that it might be conceived as a solution to our problems.
When Mr. Sarkozy despises any new deals at the WTO level and demands protectionism in agriculture he comforts Asian agricultural protectionism and refuses to consider changes to the rules of international trade!
A couple years ago, while in Taiwan, I got amazed with the impressive increase in the demand of dairy products. At the time the existing statistics revealed that the Taiwanese per-capita consumption of dairy products was something like 50 times the figure for mainland China.
Did Mr. Sarkozy ever thought what could this mean for the famous French hundreds of different cheese to have a real opening of the Chinese market?
And what does Mr. Sarkozy expect to keep out of the French territory by his closed borders policy? Brazilian soya beans and Argentinean beef?
Shouldn’t it be obvious that the more the French agriculture will be turned to the rest of the World, the more it can take advantage of its quality products with high value added?
Who, more than the French performing food industry will be hurt by a closed borders policy?
Not by chance, in the same speech where Mr. Sarkozy announced his will to trade a diminishing European budget for a fortress Europe, he announced another bill of 50 million Euros to the French farmers.
What is quite obvious in Mr. Sarkozy’s intentions is the will to renationalize ever more the European agricultural policy, replacing the European budget – that after a transition will have to be fully shared with new member states – by the French one.
Yesterday, Mr. Sarkozy reminded the 2009 terrible blow to French farmer’s revenue to conclude that he would wage a war in Europe rather than allow to a dismembering of existing Common Agricultural Policy.
The undoing of the oldest and more common European policy would be another blow not only to Europe but also to its agriculture, but does that mean we should leave it unchanged?
After all, wasn’t it under the existing CAP that farmer’s incomes tumbled last year in France?
Doesn’t it mean we really need to think it over again?

Brussels, 2010-03-25

(Paulo Casaca)

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