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    THE BridgeNews FORUM: On farming, farm policy 
    and related agricultural issues. 
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  * British Are Hit Hard, As Common Farm Policy 
    Fails To Prevent Others From Gaining Advantage 
  
  
    By David Walker, agricultural economist 
    BridgeNews 
    Norwich, England--Europe was viewed by British farmers as first and  
foremost a common market for their produce in the halcyon days of the early  
1970s, when Britain joined the trading bloc. So dominant was this view that  
few were probably aware that the club's formal title had been the European  
Economic Community. 
  
    It soon delivered on its promise of higher prices for almost farm  
commodities. But the windfall benefits were rapidly built into overhead  
costs, particularly for land. 
  
    In recent years the term Common Market has slipped from popular usage.  
When it is used to refer to what has become the European Union, it is usually  
in a disparaging context. 
  
    Maintaining the reality and the perception of a European common market  
for farm commodities has become increasingly difficult. The European Common  
Agricultural Policy budget has been restricted and farm incomes have fallen  
in most EU countries. 
  
    Almost all European commodity interests have a grievance. Some issues cut  
across many commodities, and British farmers are not alone in feeling  
disadvantaged. The diversity of issues illustrates the challenge involved in  
maintaining a common policy on farming throughout the EU. 
  
    The EU leadership in Brussels has done its best to keep the playing field  
level. Too often, however, cultural, social or political differences between  
EU member states have given the farmers of one country an unfair advantage or 
-- in the more likely experience of British farmers -- lumbered them with  
handicaps. 
  
    For British farmers, the strengthening of the pound against the euro is  
the most challenging of these uncommon market issues. In theory, farmers  
should benefit almost as much from lower input costs resulting from the  
strength of the pound as they lose from lower output prices, the support for  
which is nominated in euros. In practice, though, the loss of receipts is  
more immediate and evident than the savings in expenses. Yet the British  
government has been reluctant to provide compensation for such exchange-rate  
costs, as permitted under EU regulations. 
  
    British cereal growers have found it impossible to meet quality standards  
for the EU's purchase of surplus wheat -- standards that seem designed to  
exclude Britain and benefit the French and Germans. The amount of moisture in  
grain for surplus storage is one measurement over which national governments  
have some say, yet the British government has used this to the advantage of  
its farmers for the first time only last year. Most other EU countries have  
doing so for years. 
  
    British dairy farmers lost their milk-marketing boards to EU restrictions  
on national marketing agencies about five years ago, after a long rearguard  
action. But it was the British government that caused its dairy industry the  
most grief when, to promote competition, it broke up the cooperative that  
dominated the British milk market. This followed deregulation of the  
marketing boards. This is in contrast to other EU countries that allow  
cooperatives to dominate their domestic markets. 
  
    The British pork industry has also suffered as a result of national  
regulations, in this case the U.K. government's ban on the tethering of sows 
-- a cost-saving measure that farmers take to protect piglets from harm.  
Animal-welfare groups, which are more vocal in the U.K. than on the  
Continent, had lobbied for the ban. 
  
    The continuing French ban on British beef imports is the highest-profile  
issue in EU agriculture today and shows that some EU states will go beyond  
what is legal to support their farmers. The French ban remains, despite the  
EU's lifting of restrictions that were put in place in response to the U.K.  
outbreak of bovine spongiform encephalopathy, the so-called mad cow disease  
(linked to a rare, but fatal human disease, new variant Creutzfeldt-Jakob  
disease). 
  
    It is unlikely that the French are both truly concerned about food health  
issues and that they do not understand what British BSE controls have  
achieved. 
  
    It has taken almost six years for the European Commission to impose  
stricter regulations on the feeding of meat and bone meal to cattle -- a  
delay that best illustrates the uncommon nature of European farm markets. All  
evidence from the British experience of its epidemic and its containment  
suggests that the feeding of meat and bone meal to cattle is the dominant --  
if not the only -- way BSE is spread. 
  
    The commission's regulations on feed are not an attempt to level the  
playing field, but rather to reduce the risk of a BSE epidemic in Europe. 
  
    But tightening related regulations would increase costs for EU nations  
and would be a recognition that BSE is more widespread in Europe than  
believed. Importantly, the political costs of tighter regulations would be  
immediate, but the potential payoff deferred. 
  
    Some EU members, including Germany, Italy and Spain, were prepared to  
forgo tighter regulations and gamble with public health to maintain a  
competitive edge. 
  
    As long as EU members have differing attitudes toward the many  
non-economic aspects of farming and food production, they will feel justified  
in imposing their own rules in their own jurisdictions. National farming  
lobby groups will support those rules that enhance their advantage over their  
EU rivals in the competitive environment of the common market and oppose  
those that do not. 
  
    Unfortunately, social and cultural gaps between EU members, and hence  
tensions, can be expected to widen and deepen with the planned expansion of  
the European Union to include the once centrally planned countries of Eastern  
Europe.   End 
  
    DAVID WALKER, an agricultural economist, lives on his family's farm  
outside Norwich, England. He recently served as senior economist in London  
for the Home-Grown Cereals Authority and previously was executive director of  
the Alberta Grain Commission in Canada. He also maintains a Web site at  
http://www.openi.co.uk/. His views are not necessarily those of BridgeNews, whose  
ventures include the Internet site http://www.bridge.com/. 
  
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to Sally Heinemann, editorial director, BridgeNews, 3 World Financial Center,  
200 Vesey St.,  28th Floor, New York, N.Y. 10281-1009. You may also call  
(212) 372-7510, fax (212)  372-2707 or send e-mail to opinion@bridge.com. 
  
    EDITORS: A color photo of the author is available from KRT Photo Service. 
  
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