World Grain - December 2010 - 6

from the editor-in-chief

Coherence in food policies
needed to move ahead

nyone dealing with the European
Union's Common Agricultural Policy
(CAP) becomes quickly aware of the
great complexity of this program in supporting agricultural producers across the length
and breadth of the E.U. From its founding
by the 1957 Treaty of Rome, when the CAP
mainly affected farming in France, Germany
and Italy, to its present broad coverage, the
program's evolution has impacted the direction of farm supports around the world.
While it may be wrong to assert that either
Washington or Brussels alone account for
the way crop programs have changed during
the past half century, it would be downright
foolish to disregard major shifts in direction.
Both America and the E.U. face the urgent
need to make decisions about the future of
farm supports due to the approaching expiration of current programs. Keeping a close
watch on these deliberations is hugely important to the global grain industry.
Largely because of present-day bitterness and divides in American politics, efforts to address issues affecting agricultural
programs have been muted. That is not the
case in the E.U., where public and intergovernmental hearings have been conducted
in hoping to arrive at decisions on future
orientation of the CAP. It is almost assumed
in Europe that the share of the E.U.'s total
budget devoted to agricultural programs will
be reduced, to perhaps as low as 25% from

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40% as present and the high above 80% that
ruled in many earlier years. Comparable
U.S. figures are not available, although the
Organization for Economic Cooperation and
Development (OECD) estimates that farm
program payments account for 10% of U.S.
agricultural income, contrasted with 24% in
the E.U. and 22% as average for all 31 member countries of the OECD.
Awareness of the budgetary debates raging in Washington leaves no doubt but that
curtailing spending will also have the upper
hand in the future of U.S. agricultural programs. Instructive, though, is the way that
the food industry of Europe, represented by
the Confederation of the Food and Drink
Industries of the E.U. (CIAA) has emphasized maintaining crops at a level sufficient
to protect food security. That means not just
crops large enough to supply domestic needs
but adequate for response to global demand.
The CIAA also points out something that is
not often heeded, that crop production must
meet not only demand totals, but should
match "domestic quality criteria and be competitively priced."
In calling for adequate production of the
right quality and price, European food manufacturers should not be seen as pressing only
their own advantage. One key in their platform is a concept that should be welcomed
by the worldwide grain industry. This is the
call the CIAA makes for "improved coher-

ence across policies affecting supply." This
rather convoluted title simply means the
food industry recognizes that crop, and thus
food, production is affected as much by
regulations having to do with food safety,
new technologies, trade development, environment, consumer and social policies as
by what is written into agricultural support
programs. Unless care is taken to assure that
these policies are carried out with the same
caution as given food supports, consequences could be awful.
The coherence that the CIAA stresses applies not just across the way these relatively
new policies affect the food supply, but also
how their unwise application could cause
disruption in vertical coherence. Better functioning of the food supply chain ought to be
one of the major goals of the new CAP, the
CIAA declares, while pointing out how regulations in other areas may interfere with the
efficiency of the supply chain within a single
part of the food business. Along with the urgency of adopting agricultural programs that
encourage farmers to make decisions based
on market-driven demand, the idea of an expanding role for market orientation assigns
precedence to avoiding programs and policies that stand in the way of the grain industry's progress.

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WORLD GRAIN (ISSN 0745-8991) Volume 28, issue 12,

Morton I. Sosland
Editor-in-chief

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