Questions for Agricultural Policy: A Policy Coherence for Development Perspective

The following are the key questions to ask when examining the impact of EU agricultural policy and agricultural policy reform on developing countries:

EU Trade Barriers and Developing Countries

How open is the EU market to imports of agricultural products from developing countries? Do trade barriers designed to protect EU farmers make it more difficult for farmers in developing countries to increase production? How generous are the market access concessions that the EU makes for many developing country food exports under preferential trade agreements? Would some developing countries be hurt if the level of support and protection to European agriculture was further reduced?

Elimination of Export Subsidies

The EU is a major food exporter, and some of these exports are sold abroad with the aid of export subsidies. What is the effect of subsidised exports on farmers and consumers in developing countries? What impact would it have, both for developing countries as well as for EU and Irish farmers, if export subsidies were eliminated, as the EU has conditionally promised to do in the WTO Doha Round of trade negotiations?

Who would benefit from further agricultural trade liberalisation?

Which countries would benefit from further agricultural trade liberalisation by the EU? Is there evidence that increased agricultural exports from developing countries help to reduce levels of poverty and hunger? Is it not just the more advanced developing countries, like Brazil, China and Thailand, who will gain from improved market access, and within these countries, is it not the larger, more commercial farmers or even the large multinational trading and processing firms who will mainly reap the benefits, rather than smallholders or peasant farmers?  What happens to poverty if food prices rise because of reduced food production in Europe and other developed countries and low-income households have to pay more for their food?

Impacts of Health and Food Safety Standards

Would it really make much difference anyway if the EU removed its trade policy barriers to food exports from developing countries? Often, the main barriers to exporting today are meeting the increasingly onerous health and safety standards required by the EU. Or meeting the demanding requirements of the major supermarket groups who increasingly control the EU grocery trade for consistent and reliable supplies of high-quality products? Can producers in developing countries compete with domestic producers to capture a larger share of the EU market? Would it make sense to use some of our development assistance to assist food firms and producers in developing countries in complying with these standards as a way to tackle hunger and poverty?

Designing appropriate complementary strategies

It is not only by providing assistance to meeting more stringent health and food safety standards that the EU could promote greater coherence between its agricultural trade policy and development objectives. Many low-income countries already benefit from preferential access [link] to the EU’s agricultural markets, yet we still observe a steady fall in their market share. Clearly, a whole range of other issues involving developing countries’ capacity to supply export markets also need to be addressed if they are to really benefit from easier market access. These issues include assisting private sector food firms to break into export markets, facilitating trade through reform of customs and trade infrastructures, and improving transport links including roads, ports, airports and refrigeration facilities where necessary. The scope of this agenda shows the importance of building coherence between the EU’s development co-operation programmes and its trade and market access policies.

Designing appropriate compensation strategies

Not all developing countries stand to gain from more liberal access to EU agricultural markets. If EU agricultural policy reform could hurt some developing country exporters even as it benefits others, are there complementary policies which the EU could introduce to help to mitigate or offset these damaging effects? Could this be done in the form of providing additional trade preferences, or should it be given in the form of financial compensation as additional development aid? If given as aid, how should it be distributed in the recipient countries so that it both targets the sectors and households who have been hurt by EU agricultural policy reform, while helping to contribute to sustainable economic development and not just be a once-off transfer of resources? What lessons can be learned from previous aid packages to help low-income developing countries to adjust to EU agricultural policy reform?