Examination of Witnesses (Questions 49-59)
TUESDAY 11 FEBRUARY 2003
MR DUNCAN
GREEN, CLAIRE
MELAMED AND
MR MICHAEL
BAILEY
Chairman: Thank you for coming and giving evidence
to us today. You are individually and collectively well known
to the Committee. Questions will be generally addressed to the
team. You are not all obliged to answer every question. Please
feel free to work out between you how you allocate the questions.
The purpose of this inquiry is to try and get the detail. We are
pretty conversant with the broad brush concerns. We are trying
to see whether we can identify particular actions that could happen
or changes of policy that could make a substantial difference.
We are looking at Doha and other things and we are looking at:
what is it that we should be doing, either in the EU or in WTO.
We are looking at the more detailed policy.
John Barrett
49. Often the best way to find how to move forward
is to see what has gone on in the past. Looking back, what historical
evidence is there that you can tell us about the link between
trade policy and poverty reduction? That sets us in the context
of where we are. What have you learnt, particularly in relation
to trade liberalisation for yourself or your partners, about the
way forward? Looking back, what have we seen happen and how do
we move forward?
(Ms Melamed) The one clear message that comes out
of a review of the evidence is that there is no single relationship
between any given policy, be it trade liberalisation or any other
trade policy, and economic development. There are instances where
liberalisation has had a positive effect on development in general
and development of particular groups of people within countries.
There are many more instances where it has had a negative effect.
Similarly, with protectionism, with subsidies and with various
other instruments that are the subject of this debate. There are
cases where they have been extremely successful in developing
local enterprise and national economies. There are instances where
they have been less successful. The single message I would give
is that there is no single message.
(Mr Green) This is a big issue. There is a danger
sometimes when you listen, say to the World Bank or others, that
they seem to mix up cause and effect. In many cases what history
suggests is that the kinds of policies that are prescribed as
a way of achieving development are often the result of development.
I will explain what I mean. If you look at countries like Taiwan
and Korea, they have often liberalised after a successful period
of state development and, when their economies are strong enough
and complex enough to cope with the dangers of liberalisation,
then they liberalise. This has been fairly effective in some areas.
I have just come back from Argentina; I was there last week. There
you have a situation where a country with quite a big economy
liberalised very rashly, both in terms of trade and capital flows,
in a very poorly handled privatisation process and it is now suffering
the consequences. GDP has fallen by about 13% last year; the country
is 60% below the poverty line. That is a situation where liberalisation
was too hot to handle for the economic and political structures
that exist. It is important to look at liberalisation, as Claire
says, country-by-country, but also to see what parts are the result
of a successful state-led process.
(Mr Bailey) In the Oxfam Trade Report, which
we published last year, we did a detailed study of the relationship
between trade liberalisation and poverty reduction, using a different
set of assumptions to those commonly used by the World Bank. We
found that in fact there was some correlation, a weak correlation,
between cautious liberalisation and success in poverty reduction.
We are not saying that that proves the point. We agree with what
Claire said, that in a way you can show almost anything with models.
The answer is that there is no single strategy on trade which
reduces poverty, but, if anything, cautious liberalisers have
done better. Certainly we have seen in a number of countries that
we have studied how incautious, over-rapid liberalisation has
caused considerable damage to local industry or to small farmer
interests. That is not to argue against liberalisation. We have
also seen countries where reducing trade barriers has led to more
efficient national industry.
(Mr Green) Claire has reminded me of something we
were talking about outside. The historical focus is very important
and too often neglected in favour of discussions on the basis
of modelling and theory. I had a fascinating conversation with
a man called Uri Dadush, who is Head of Trade Policy at the World
Bank. He laid out essentially what the post-Washington consensus
is: good government, sequencing and pace with liberalisation,
and so on. At the end of that I said, "Fascinating, could
you just give me some examples of countries that have developed
in that way?" and he looked blank and said, "I cannot
think of any, but there must be some". This man is Head of
Trade Policy at the World Bank. The alarming thing about that
is that it demonstrates a lack of historical awareness, or lack
of historical interest even. At least he should have been able
to give some examples. On the wider point, I definitely welcome
some historical focus.
50. All three of you used that term, "trade
liberalisation". Looking back, is there more that we can
learn from what has happened in the past to make sure that we
actually use trade policy as a focus for poverty reduction and
not just as a trade-focussed issue?
(Mr Green) I think there is an important distinction
between trade openness and trade liberalisation. Trade openness
is related to GDP and it is often used as a shorthand for trade
liberalisation. Some of the most open trading countries, countries
like Taiwan and Korea, are very much not liberalised. The experience
is that export promotion and openness to trade can be very effective
in reducing poverty, but trade liberalisation is different set
of policies, which have many more down-sides, in our experience.
Chairman: In this inquiry we want to
get together a glossary of terms. We will send that to various
witnesses. You can all give your definitions of some of these
things. Part of this debate, we have discovered, is conducted
by those within the secret garden in a sort of shorthand. Sometimes
the shorthand does not always mean the same. It would be useful
for parliamentarians, and others more broadly, to have an understanding
both of what some of these phrases mean and what are the different
nuances. This may be one of the first reports that will have a
glossary in the back in relation to terms and what different organisations
mean by those terms.
Mr Colman
51. "Trade openness" is a new one
on me. Could I ask you what are the prospects for the post-Doha
negotiations amounting to a development round?
(Mr Bailey) I would say very gloomy. I was in Geneva
last week and on Friday I spoke to the Indian Ambassador and also
to the Bangladeshi Ambassador, who co-ordinates the Least Developed
Countries Group. I asked them whether they had seen anything in
the course of the months since Doha where there have been significant
gains of any sort to developing countries. Both of them said:
"We have seen no progress whatsoever on matters of concern
to us". If you look at the slow progress in reforming European
agriculture and at the US Farm Act, which was passed last year,
you can see that the problems of agricultural protectionism have
increased rather than diminished. I think agriculture is going
to be the main stumbling block, in fact, for the new round. Unless
there is some progress on agriculture, I think everything else
will stay pretty stuck. Developing countries have quite a long
shopping list of issues from the Uruguay Round which they want
dealt with as a priority. It was agreed at Doha by all the Member
States that those would be addressed as a matter of priority.
For example, to use a bit of jargon, on the question of special
and differential treatment: developing countries are saying, "In
the trade rules for liberalisation, we need to be treated differently.
We cannot expect to have a balanced equal reduction in tariffs,
say, between rich countries and poor countries. We cannot expect
to implement the same rules in terms of intellectual property
". The rich countries have agreed: "yes, we will put
this whole question of how developing countries should be treated
differently as a priority on the negotiating table." In June,
the first deadline for results was missed. In December, the second
deadline for results was missed. That negotiating group has failed
to come up with any significant agreement on how developing countries
should be treated differently. The only small change I think is
in the question of notification, where developing countries do
not have to tell the WTO immediately about changes in their customs
arrangements. These are purely nominal. As the Bangladeshi Chair
of the LDC Group said to us, "We have had no changes in special
treatment of any commercial or economic value whatsoever".
I use that as an illustration to show that what was held out to
be a key part of the development round, has made absolutely no
progress at all. The list could go on to market access for textiles
and the resolution of the current debate about the TRIPS Agreement
and its impact on access to medicines and so on. I came back last
week with a very depressing picture of the willingness of industrialised
countries to make any concessions whatever to developing countries.
I am putting this very strongly because there really was a very
grim picture as far as development content goes.
(Ms Melamed) There are two things to add to the point
that Michael made. Yesterday, the committee dealing with special
and differential treatment actually recommended to suspend the
discussion because they said that they were getting nowhere and
that they were taking up so much of developing countries' limited
time and capacity in order to get nowhere. The developing countries
decided it was better to suspend the whole negotiation until a
later date. It is important to emphasise that the time-tabling
and the point about certain issues being given priority were things
that were supposed to make it a development round. It was not
simply that the development round was defined by the range of
issues; it was also defined by the way in which these matters
were dealt with. The idea was that certain issues would be dealt
with first. That was, first of all so that developing countries
would not have to spread their capacity over a number of issues;
and, secondly, that key issues for developing countries, special
differential treatment, TRIPS, and public health and implementation,
would not be subject to the kinds of trade-offs that would be
forced to occur if the decisions were delayed. The idea was that
developing countries could get certain issues of key importance
to them resolved without having to pay for them through making
concessions in other areas. Because of the slowness and delays
and missing of deadlines, that key component of the development
round has already been lost. I think there is a certain kind of
complacency sometimes that creeps into the thinking about the
delays, that this is not that important, it is bound to happen
and we all know that in rounds everything is always decided at
the last minute, that is just how it is. It is important to emphasise
that that was one of the things that was supposed to make it a
development round; it was supposed to be different this time,
and it is not, and now it cannot be.
(Mr Green) To reflect on why, it is not that the people
in Geneva are bad people or anti-development. I came back from
Doha quite optimistic but I have been proved rather wrong by events,
to my embarrassment. When you look at why, it is something about
the way WTO works. As soon as they got back to Geneva, the negotiators
rolled up their sleeves and went back to business as usual, and
that is extracting as much as you can get and giving as little
as you can. That is not even the free market but a very straightforward
mercantilist approach to negotiation. The amount you invest depends
on how much economic and political clout you have. That has very
much been the story since Doha. Increasingly I think that we should
bear that in mind when we put issues in to the WTO, that it is
very hard to imagine it ever working really any differently. It
is a fairly hard-nosed negotiating forum.
(Mr Bailey) That description of how the WTO works
is almost word-for-word what the Deputy Head of the UK Mission
in Geneva said to me on Friday. He did add that the UK, of course,
was the one country that did it differently, but he would, wouldn't
he? It is that idea that a trade negotiator gets one over on the
other if he can and gives nothing away.
52. The Interparliamentary Union is having a
conference with the WTO next week on Monday and Tuesday. What
would your advice be to the British delegates going to that conference
as to what they should be pressing for and what single thing do
you think the UK Government should be pressing for to ensure that
this is a development round?
(Mr Green) This needs a regular comparison of what
is going on in the WTO against the Millennium Development Goals.
Call the WTO and actually ask them to show how they intend to
help the international community deliver by 2015. That is something
people just do not think about in Geneva. They may put it in the
Doha Declaration but I would pretty much guarantee that since
Doha it has not crossed many people's radar screens. If the Parliamentary
Union can have that political oversight and accountability role,
it would be very helpful.
53. Clearly it has that particular oversight.
What do you think the UK Government should in fact be pressing
for, just one thing?
(Ms Melamed) The UK Government negotiate in the WTO
through the European Union, so any change of approach obviously
would have to be negotiated through the forum. As Michael said,
agriculture was one of the keys to the round. Pressing the European
Union to change its views on agriculture somewhat would be helpful.
I suppose one key thing that would help very much in making it
a development round is not to introduce any new issues at this
stage and to say that we are where we are. There is a huge range
of issues on the table, the difficulties of those are well known,
and there has been slowness of progress. The idea of introducing
anything new into this situation is really rather bizarre if people
are serious about involving countries and getting a good outcome
for that.
(Mr Bailey) Your question is a bit like which of our
children we prefer; it is tricky. On agriculture, in relation
to subsidies and protection by tariffs and so on, I think the
UK Government has been working hard in Brussels to try and convince
its European partners that we need changes. We would like them
to do it harder still of course. Where the UK has been particularly
active is on the question of expanding the WTO agenda to include
new issues. The European Union is the principal "demandeur",
as they say, the principal driving force, for getting these so-called
new issues—investment, competition and government purchasing—on
to the WTO agenda. Within the European Union, the UK has been
the main enthusiast for this. That is possibly an enthusiasm somewhat
tempered at the moment. I think that if the UK reviewed its position
on expansion of the WTO agenda, that would make a very big difference
in Europe, much more than so than anything it said on agriculture.
That would, in turn, have an impact on how developing countries
perceive the round, and indeed the chances of sustaining the round.
I do not think one should underestimate the extent to which the
new issues are, along with other things admittedly, a potential
round-breaker or round-spoiler.
Hugh Bayley
54. I would like to know what NGOs in other
countries are doing, what your counterpart organisations are campaigning
for, particularly in the EU because of the Common Agricultural
Policy. I sense on agriculture that the UK is making proposals,
perhaps not as radical as you would like, which are still ahead
of the field in the EU. The Government feels very strongly that
unless we can build a fan club for fairer trade across Europe,
as Jubilee 2000 did on debt, they will not be able to put together
a pan-EU view that drives the debate forward. What is happening
in other countries? What are you doing to encourage colleagues
and sister organisations in other countries to work on this issue?
What could the UK Government do to make common cause with people
who are arguing similar but at least complementary positions in
other countries?
(Mr Green) CAFOD is a Catholic aid agency and we work
very closely with our sister agencies in Europe and elsewhere.
We have probably taken the lead on agriculture with the Catholic
network. We have done a joint submission to the Commission on
the Mid-Term Review of the CAP. I think it is fair to say that
most of our views are in that joint submission. Each agency tends
to reflect the national political context, and so it should. The
discussion between us and the Catholic organisations in France
and elsewhere tends be a mini version of the discussion between
governments. In terms of what the UK Government should be doing,
I think it should be very careful. UK governments going and telling
the UK NGOs what to say is risky; telling the European NGOs, it
is liable to blow up in their face. I think one thing which is
very useful is funding the right kind of research—I have
some examples of different research later that have been helpful—and
then putting it in the public domain and seeing if it is taken
up. The difference with Jubilee 2000 is that trade is a much more
complex issue and in some areas we agree with government and in
some areas we very definitely disagree. It is not a completely
analogous situation but there are definitely pan-European movements
growing around some areas and I would say "No New Issues"
in the WTO is probably the biggest unifying thing across Europe
at the moment.
(Ms Melamed) Various networks of NGOs exist. There
is the European Trade Network, which exists mainly to co-ordinate
the activities of NGOs on trade with regard to the European Commission.
That meets regularly and discusses strategy and so on. There are
also embryonic Trade Justice Movement type organisations in various
countries. I think in Germany that is probably the most advanced.
There is a growing level of campaigning on these issues across
Europe as well. I endorse what Duncan said, that the particular
issues that they focus on depend on the national context. I do
not think that necessarily many or all of them would see themselves
as existing to back up the UK position within Europe. Obviously
many NGOs would support the UK position on agriculture, and a
lot of them do see their role as being to push their governments
in agriculture. But, as Duncan said, the "no new issues"
is another as important, if not more important, focus of NGO campaigning,
and on that we disagree with the UK Government. I think it would
be wrong to see campaigning necessarily as the cheerleader for
the UK Government.
(Mr Bailey) As Oxfam International, we are present
in 12 industrialised countries. We are co-ordinating our global
campaigning on a number of themes, one of which is agricultural
dumping, subsidised dumping, by both the US and by the European
Union. We are working with partners in Europe on this. We will
soon have someone working in France because it is a big part of
the problem on agricultural reform. Was the extent of the concerns
of southern NGOs part of your question?
55. Yes.
(Mr Bailey) Clearly there are as many concerns as
there are NGOs and countries. Certainly this point about expansion
or threatened expansion of the WTO agenda is exercising everyone.
We have found that our work on commodities, particularly on coffee,
has an echo in quite a number of developing countries. We have
good partnerships with producer groups, particularly in Latin
America and the Caribbean, who are concerned that something is
done about the state of the world commodity markets. We also find
that in a number of regions there is a lot of concern about regional
trade agreements, particularly those promoted by the United States.
In Latin America, for example, at the World Social Forum where
both Duncan and I were recently, the Free Trade Area of the Americas,
which is in many ways WTO-plus, is pushing liberalisation further
and faster than the WTO process. It goes beyond TRIPS, for example,
in intellectual property protection. That is something that we
foresee as quite a serious problem and the general consensus amongst
our partners is that they do not want the free trade areas in
the Americas. The EU regional agreements, for example Cotonou,
or the Mediterranean agreements, are also of some concern to our
partners. This is mainly because of the lack of recognition that
the developing countries should not be asked to open up as much
as the Europeans should be prepared to open up. Of course, on
a number of products in industrial sectors we know that the Europeans
are not prepared to open up very much at all. Underlying almost
universally the concern amongst our partners on trade issues is
this basic point we touched on at the beginning of this session,
which is that the pressure is on them, whether through the WTO,
regional trade agreements or the World Bank and IMF, to open up
their markets to foreign investment unconditionally, to open up
to import competition without conditions and at a high speed.
If you ask most people that we work with who they see as the bad
guys when it comes to forced and rapid liberalisation, they will
point to the Bank and the Fund rather than to what is happening
with the WTO. That is a very live issue because they are still
in debt and they are encouraged, I would say in some cases actually
forced, to introduce trade policy measures that otherwise they
would not do.
Chairman: May I make two brief comments
on the question of Doha? Firstly, what you collectively have to
say about what is happening in Geneva, which we are already seeing
to be a development round, is depressing. Of course, we on this
Committee will probably not be reporting until the autumn but
we may issue a short report before then. Claire, as you have the
misfortune to be sitting in the middle, could you kindly co-ordinate
an informed NGO note[12]on
what is happening in Geneva at the present moment? I would like
to write on behalf of the Committee to Patricia Hewitt just flagging
up these concerns now and to write to Lamy now. That would be
helpful. Can I also pick up Hugh's question and re-visit it because
it is important. I think all of us yesterday received a note from
the Trade Justice Movement about a weekend in June. The policy
people behind you can deal with this. That is when the Trade Justice
Movement is going to want to see us all MPs in our constituencies.
They are trying to see every MP during the 24-hour period in his
constituency. I can see as a lobbying campaign that has a lot
of force. I doubt if you will find a Member of Parliament in the
UK who does not believe and would not put their hand up to straightforward
issues such as the need for fundamental reform of the Common Agricultural
Policy. From hearing your evidence this morning, agriculture is
high on the agenda. The question I would ask the TJM, and they
are making an important point, is: what is being done to do a
similar exercise with members of the French National Assembly,
the German Bundeshaus, the Spanish Cortes? Unless one actually
starts lobbying members of other parliaments and national assemblies
around Europe, all we are doing is having a mutual cuddle. Frankly,
mutual cuddling may make us all feel warm but it does not take
us forward. May I reinforce what I think you were saying a few
moments ago, that we need to ensure that concerns in the UK about
trade policy are taken out elsewhere in the European Union. We
are certainly trying to do that at a parliamentary level but it
also needs to be done through the NGOs.
Alistair Burt
56. I think we have covered the subject quite
well. We must move on. You are pretty rude about CAP between you.
"Crime against humanity" is probably the least worst
point that you make, you quote that, and the $2 a day cow. Could
you set out briefly for the record your views about the impact
of CAP on food security and livelihoods in developing countries
and, secondly, your genuine consideration of whether or not reform
is possible with the Franco-German attempt to seize up CAP reform.
Was it a final act of desperation to try to hold off the tide
or is it just an example of an absolutely intransigent attitude
you are going to face throughout Europe and you are not actually
going to change very much at all?
(Mr Green) We are development agencies. CAFOD certainly
has no mandate within the UK, so it has to tread carefully in
what it says about the CAP. Our principal concern as a development
agency about CAP is that it leads to over-production, which is
then dumped on developing countries at the cost of or below the
real cost of production. We see this in a number of countries
where we have talked to partners. I notice that our Jamaican partners
sent a rather good submission to the Committee, which we are very
pleased about, which details how this dumping takes place. Our
concern on CAP reform is that a way must be found to stop that
dumping happening. If you look at the way the CAP has changed
over time, it has got slightly less bad in the sense that export
subsidies are probably the most egregious kind of policy in terms
of dumping and the move—and I am sorry if I am going into
CAP speak here—to direct payments and the move proposed
now by Fischler to decouple payments from production should help
a bit. The idea that you can throw $2 at a cow, or
40 million a year at agriculture and that will not
have any effect on trade is rather hard to believe. What you will
get is a situation where, even under the decoupling proposals,
farmers will get an income cushion and will then trade on top
of that. This will enable them to sell at a price at which they
would not otherwise sell. I do not see how that can be minimally
trade-distorting, as is claimed by Fischler and Lamy. Our view
is that with levels of spending that high, dumping will continue.
There are a couple of other things in terms of the politics of
all this. You asked if the Franco-German accord was a final act
of desperation. I wish. 2013 is a long way away. The Franco-German
accord agrees funding will continue to 2013. I noticed in the
hearing you had last week with the people from DEFRA that they
were saying it is actually not bad because we are capping it and
it is now 25 countries rather than 15, so really it is a decrease.
It is up to a point but the new countries will only get a small
proportion of the overall CAP spend, so it is not actually decreasing
it that much. Lamy has said, I think probably privately, that
it is CAP reform that drives the WTO position, not the other way
round. Fischler is trying to use the WTO negotiations to get CAP
reform and that is why they are saying such different things at
the moment about the relationship between CAP and WTO. Fischler
wants to get CAP reform; Lamy wants to keep the WTO on track.
Therefore there is a serious division in terms of the signals
they are sending. My fear is that CAP reform is really going at
a snail's pace and will break the Doha Round.
(Mr Bailey) May I add that there is considerable evidence
of damage to small farmers livelihoods in many developing countries
from subsidised exporting. We have documented the impact on developing
countries of cotton subsidies in the United States, for example,
the effect on West African producers. We have looked at sugar
and milk in the European case. We will be looking at wheat and
cereals as well in the near future. It is a catalogue of scandalous
destruction of livelihoods or missed trade opportunities for developing
countries. In the case of sugar, thanks to the exception of sugar
from the "Everything But Arms" initiative of the European
Union, Mozambique is losing about $100 million a year in potential
sugar exports. For a country that is as desperately poor as Mozambique—and
surely we all sympathised with people hanging off trees during
the floods—it is pretty scandalous that we are effectively
robbing them of $100 million a year, an amount that they desperately
need, through the subsidy system, because of the dumping. We are
prioritising this in our global campaigning, especially the export
subsidies. It is not just the imports that countries have to compete
with, and which they cannot deal with, but we should not forget
the loss of developing country exports to third markets. India
is the biggest milk producer in the world and would quite like
to export milk, say to the Mediterranean or to the Middle East,
but it is unable to do that because highly subsidised European
milk is dumped in those markets. That is what they have lost.
My final point on this question in relation to the CAP and subsidies
is that we also have to look at the pressures on developing countries
to open up their own agricultural markets, even though these subsidies
are still there in full force and dumping is in full spate, if
you like. You have to be very careful in the Agreement on Agriculture—the
negotiations on agriculture with the World Trade Organisation—that
developing countries are able to protect themselves against this
tide of products, but the European Union position is not as strong
as we would like on that. The many industrialised countries which
are pushing developing countries to open up their agricultural
sectors—and we could talk more about that—should agree
a series of measures at Geneva which would enable these poor countries
to stave off the flood.
(Ms Melamed) To add on that, the point that Michael
made about the development opportunities being foregone is really
important. This is not a static problem of people not able to
grow. I was in Ghana two weeks ago. Dumped products is a big issue
in Ghana. There is a whole range of products where people are
arguing that they are losing out through dumping. One of these
is poultry. There is an argument that in fact the current producers
of poultry in Ghana not only are being undermined by cheap imports
of poultry from the European Union and Brazil, among others, but
also the poultry industry in Ghana has quite a significant multiplier
effect on the economy. Were the Ghanaian poultry industry to be
able to sell more widely, just within Ghana, there would be implications,
and therefore there would be requirements for poultry feed, processing
and so on. The implications for the economy of Ghana would ago
far beyond simply the poultry farmers. Were the Ghanaian markets
accessible to Ghanaian poultry farmers, there would be far more
implications for development than you would see by simply looking
at the poultry industry. I have documents from the Ghanaian Poultry
Farmers' Association that I am happy to show you, if you are interested.
It is very important to look at this in developmental terms as
well as simply in terms of the livelihoods of individual poor
people, which is obviously very important to do.
Mr Walter
57. We tend to focus very much on Europe and
the CAP but if we look at the total OECD subsidies to agriculture,
we are looking at significant multiples of just EU subsidies.
I am particularly interested in the United States. Do you see
a similar move in the United States to link the support given
by the US Department of Agriculture, which is very significant,
and other agencies as well there to the WTO agenda, or are they
not yet at that stage of discussion?
(Mr Green) I think the US has been much cleverer in
the handling of this issue than Europe has been. It does not have
this public spectacle of 15 countries arguing all the time, and
therefore it has got off the hook quite successfully in Geneva.
The US Farm Bill at the beginning of 2002 increased support for
agriculture, as you know, and the US is a significant dumper.
But it has managed to turn a lot of the attention to the EU at
the moment. There is a movement in the US and NGOs are doing excellent
work there. With Mr Bush in the White House at the moment, he
seems fairly keen on keeping the farm lobby happy.
Mr Colman
58. I come back to your intervention of earlier
about the Trade Justice lobby in June and that coming to see MPs.
Clearly some of us represent agricultural constituencies. CAFOD
said that it was not able to comment on how it would see agricultural
policy being developed in the UK because it consists of development
NGOs and could only represent those issues that developing countries
are bringing forward. Do you have partner NGOs, as it were, in
the UK actually working on the detail of how you would like to
see the CAP change, which would mean that we would still be able
to support, if you like, a rural economy in Britain but would
clearly fulfil what the Trade Justice Movement would like to have
happen?
(Mr Green) We work very closely with a number of NGOs
in a very tight network on CAP reform. Some of them have been
doing it for 20 or 30 years, so they really know their stuff,
people like the RSPB and the Consumers' Association. There is
quite a good link between overseas, the environment and the domestic
impact on all these things. We have taken a general view on what
should happen in the UK, pointing out that most of the benefits
do not go to small farmers. One important point is that large
companies and farmers should not be able to hide behind the skirts
of small farmers in terms of public opinion. If Britain could
move from MAFF to DEFRA and change its way of thinking about rural
policy, why is the EU not capable of doing a similar thing? Let
us have a common rural policy rather than a Common Agricultural
Policy and then start looking at who lives in the countryside
and what they need, rather than have this very farm and business-driven
approach to half the EU budget. We have said a few things.
Tony Colman: It would be very helpful
to have that angle moving forward. That may be much more hard-edged
than perhaps the generality of saying: should developing countries
have better access in the EU? Everyone would agree, but what does
it mean to individual rural constituencies in Britain that could
be very hard hit by those changes?
Hugh Bayley
59. Duncan, may I reflect on that last phrase
you used about farm and business-driven agenda. It occurs to me
that these are different things. If you look at the food industry,
it is a consumer of farm products and it has conflicting interests
with the farmers. Nestlé, who may not be your favourite
multinational, came to me recently to say that they are up for
campaigning against the European sugar regime for, one understands,
very clear reasons of self-interest. If they could buy sugar,
which is perhaps one-third of the cost of a Kit-Kat, from Mozambique
at half the price that they have to pay for EU sugar, there would
be benefits to the company. Almost all the food industry (and
some food campaigners which would campaign against this) use a
high content of sugar in processed food, which is mostly of what
most people eat in the developed world. To what extent are you
looking for allies on this issue, even if not more general partners
for development within the business sector, as well as the NGOs
and the Consumers' Association?
(Mr Green) This falls into the long spoon club set
of answers! One of my colleagues was in Davos recently and one
of the things he was doing was talking to the World Economic Forum
Agricultural Taskforce and seeing what kind of common ground there
is. There are some areas where we agree on subsidies, for example,
and there is work that can be done there. Often you say similar
things for different reasons and you have to be very careful about
how you do this. Certainly, we are well-versed in engaging with
a whole range of private sector actors. We take the initiative
here and elsewhere but we do not have an ideological problem.
We have to be clear about where the alliance begins and ends.
(Mr Bailey) I would say that the same is true for
Oxfam. We were in Davos mixing with the same people. If there
are sectors of industry which are supporting reform of the CAP
for their own reasons, that is fine. If they want us to do a very
public alliance with them, that becomes slightly problematic from
our point of view. We support their pressing in the right direction.
On the question of European farm subsidies: Oxfam has a domestic
poverty mandate as well as an international one. We are certainly
not calling for the abolition of all subsidies. I do not think
there is any NGO North or South who is saying, "Scrap all
subsidies for rural areas". What we do say is that they should
be considerably reduced and targeted very much at the smaller
farmers. Clearly where there is more rural poverty, there should
be more subsidies—also targeted at environmental and broader
social objectives. We are very clear on that. If Europe opens
up more to developing country agriculture or reforms the subsidies
regime and exports less, clearly there will be some adjustment,
but we do feel that the rich countries are in a much better position
to help some farmers over a period of time, to move out of farming.
There is a big difference between moving out over a 20-year period
and over generations, say, with some assistance to do so, and
being thrown out of your land overnight, which is what happens
in many developing countries with the import surges and liberalisation
that we have had. We are very clear that we do not want to destroy
the livelihoods of the Welsh hill farmers, absolutely not, for
the benefit of Argentinean cattle barons, but that does require
quite significant reshaping of the European Agricultural regime.
We are concerned, I would say, that the British Government is
not putting those social environmental objectives really to the
fore in its reform propositions. We were very disappointed that
the UK opposed the Commission proposal to limit individual farm
subsidies through the CAP to 300,000 Euros. It would be a very
welcome step to say: no, the money is not going to agri-business
for the big guys who can probably take care of themselves, we
should support the smaller farms. But the UK, regrettably, has
opposed that. We need to keep pressing on that.
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