At a summit in Brussels, France has made sure that the current budget of the Common Agricultural Policy is maintained until 2013. This will mean that smaller producers of organic or specialty produce will continue to be at a disadvantage compared to a small number of very large farms.


In a move that dashes hopes of a larger scale move to organic and specialty produce, the EU has effectively ruled out a reform of the Common Agricultural Policy for another decade. This motion was pushed through by French president Jacques Chirac, blocking a radical proposal for reform tabled by Franz Fischler, the European Commissioner for agriculture.


Herr Fischler intended to implement his plan as soon as 2004, beginning a shift towards a much-needed reduction of subsidies and a focus on rural development projects. These would mostly have benefited smaller scale producers, especially those of specialty and organic goods.


France did make one concession: subsidies will be frozen from 2007 to 2013 at 2006 levels, to take account to some degree of the fact that the European pot will be shared by 25 countries rather than 15.


This approach will hinder the growth of organic and specialty production: the amount of subsidies awarded stays linked to the quantity of goods produced, favouring large agribusiness concerns over smaller ones. The smallest 60% of farms in the EU currently receive only 10% of the entire CAP budget – yet at the same time, the EU is not currently self-sufficient in organic produce.

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With 29 million consumers of organic food and drink, the UK has the highest rate of organic penetration – but it imports 70% of its organic goods. There is still strong predicted growth for the market throughout Europe, with an expected CAGR of 11.8% between 2001 and 2006, but its development will suffer from this latest EU decision.
 
The US recently passed a new protectionist Farm Act. Combined with the EU’s decision to maintain the current levels of subsidy for another ten years, prospects are not looking good for producers in the developing world. This sort of ethical consideration is also of increasing importance to European consumers.


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