1. Building Sustainable Agriculture and Food Systems in Europe and globally – A critical review of the Common Agriculture Policy and proposals for change Alexandra Strickner, astrickner@iatp.org

2. Overview Importance of Agriculture and challenges today Role of the CAP and trade liberalization policy in today’s situation Food Sovereignty as an alternative

3. Why is agriculture an important issue? Food (and water) are basis for human survival Social dimension: –approx. 3 billion people live of farming – large part in developing countries –850 million people are undernourished –30 million people each year die of hunger Ecological dimension: without sustainable agriculture – basis for food production erodes

4. Today’s reality in agriculture Industrialization of agricultural production –less family farmers, larger farms, aweful labor conditions –Negative impact on natural resources (water, biodiversity, soil erosion etc.) and food quality –today 15 mio hectar of farmed land for production of soy beans as feed for animals (= 50% of all farmed land) Corporate concentration along the whole food chain Trade liberalization: many developing countries today net food importers Price Volatility and Instability for farmers and consumers

5. Ag markets as an hourglass Farmers Processors / retailers consumers

7. Market concentration: Facts and figures 50% of the world’s commercial seeds sales are controlled by 10 multinationals 3 leading agrochemical companies (Bayer, Syngenta, BASF) control 50% of the market 75% of cereals trade is controlled by 2 companies (Cargill and ADM) (Vorley) 40% of coffee trade is controlled by 4 companies (Vorley) 69% of the retail market in Europe is controlled by the 30 top retail firms

8. OECD – FAO Outlook for world crop prices by 2015

9. Today’s challenges agriculture Increased demand for food –Growing world population –Changing diets in emerging economies Climate Change – impacts on resources Energy Security –New demand on agriculture – agrofuels!

10. The role of the Common Agriculture Policy and Trade Liberalization CAP than and today The role of trade liberalization –EU’s External Trade Agenda –WTO

11. European Common Agriculture Policy - History Aims and Principles (introduced in 1957) –Achieving Food Security –Single market, unified price policy, communitarian preference, parity aim –Structural policy to reduce regional inequalities –Common funding Common market organizations for grains, sugar, dairy and beef –These would indirectly support the prices of other products –Intervention, tariffs, export subsidies, and sugar quotas –Supplementary CMOs for some products

12. European Common Agriculture Policy – developments Industrialization of farming in EU –productivist model –negative environmental impacts –decrease of number of farmers Lack of control of production overproduction (diary, grains, beef, sugar) EU strategy to get rid of overproduction –Dumping into developing countries markets by using export subsidies (grains, dairy, beef) –Violaton of GATT rules (protection of farmers allowed if production and export controls applied)

13. European Common Agriculture Policy – Solution of these problems Farmer solution: production controls –1984 : milk quotas Agribusiness solution: –reduction of internal price support to make dumping cheaper –Introduction of direct payments to compensate farmers income loss

14. The direct payments game (MacSharry reform 1992  Agenda 2000  Mid-term review) Evolution of EU expenses for arable agriculture, 1980-2002

15. The direct payments game (MacSharry reform  Agenda 2000  Mid-term review) World market Internal EU market World price EU price Intervention price Import tariffExport subsidy

16. The direct payments game (MacSharry reform  Agenda 2000  Mid-term review) Direct payments World market Internal EU market World price EU price Intervention price Import tariff Export subsidy World price

17. ROLE OF INTERNATIONAL TRADE AGREEMENTS WTO Agreement on Agriculture Bilateral/Biregional Free Trade Agreements in 2000 - 86, 159 in 2007 (UNCTAD) EU: Global Europe – Competing in the World –Economic Partnership Agreements with ACP countries –Negotiations for FTAs started with Central America, Andean Pact, India, ASEAN etc. –Objectives: Global competitiveness of EU corporations –Demands: abolishment of tariffs, quotas etc.

18. Trade and Development? More trade does not equal with development – see expierences of most developing countries Peasant and Family Farming cannot compete with highly industrialized agriculture Carnegie Endowment study on WTO/Doha: all developing countries but few would be losers All developed nations used high protection to build domestic markets and « competitive comapnies

19. Winners and losers of this CAP and free trade agreements? Winners Agriculture & Food Industry – cheaper input prices Larger Farmers in EU – continuous concentration Losers Family farmers in EU – diminishing in number Peasents and Family Farmers in the Global South Environment and natural resources – North and South Consumers – less healthy and safe food

20. CONCLUSIONS Context today: Agricultural model in crisis - CAP reform starting Free Trade Model in crisis – WTO Doha Deadlock Challenges: Need and opportunity to develop alternative proposals Debate on sustainable model of agriculture more than ever important! Need to address market power issue