UK steps up farming reform pressure

Overall it costs €100bn a year in higher taxes and inflated food prices.

Mr Brown aims to use this weekend’s gathering of finance ministers from the G7 group of industrialised nations in London to lobby for a deal on fairer world trade ahead of the crucial Hong Kong summit of the World Trade Organisation.

In a speech ahead of the two-day G7 meeting, Mr Brown urged leaders of the rich world to turn away from agricultural protectionism.

Scaling back the system of trade barriers, tariffs and subsidies which exclude poorer countries from the global market would be good not only for developing states but the entire world economy, he said.

And he warned that they risked missing an opportunity at Hong Kong that may not be repeated for 20 years.

Today’s report, published jointly by Mr Brown and Environment Secretary Margaret Beckett sets out a vision for a European agriculture sector in 10-15 years’ time that would be “internationally competitive without reliance on subsidy or protection” and would help protect the environment, wildlife and rural communities.

The report makes clear that Britain is not advocating an “overnight upheaval” or complete abolition of the CAP and would welcome a debate on how to make gradual progress towards reform.

But it argues that the existing system generates international tension and imposes substantial costs on consumers and taxpayers, without delivering efficient support to farmers or the rural environment.

And it sets out to refute claims from opponents of reform that the loss of the CAP would put Europe’s food security at risk, damage rural communities and harm the environment.

Much of the CAP money does not even reach farmers, going instead to landowners and suppliers of machinery, pesticides and fertilisers, or being lost through inefficiencies, the report said. Some estimates put the proportion of the cash received by farmers as low as 10%.

And the policy drives up prices in Europe’s supermarkets. One year after joining the EU – and the CAP – Poland has seen substantial food price rises on staples like rice (45%), sugar (45%), bananas (37%) and beef (38%).

While other developed countries, like the US and Japan, also provide subsidies to their farmers, the EU is responsible for nearly half of the rich world’s producer support, at €113bn a year.

About half of benefits to developing countries from agricultural reform in all rich countries would come from the EU, the report said.

The Hong Kong talks, starting on December 13, mark the end of the WTO’s Doha development round, which has seen years of tortuous negotiations aimed at eliminating unfair trade barriers and giving the world’s poorest countries easier access to global markets.

But as the date approaches, development campaigners are warning that a deal may be blocked by US and EU reluctance to give up protectionist policies which favour their farmers.

Speaking at an Advancing Enterprise conference in Westminster ahead of the G7 meeting, Mr Brown called for an “ambitious and balanced” outcome in Hong Kong.

He said: “In the next few days, an opportunity presents itself which may not come again for 10 or perhaps even 20 years – the negotiations on world trade in Hong Kong.

“In our view, the trade round could bring wide-scale benefits to all economies, developed and developing, and contribute to the economic reform agenda.

“As recently acknowledged by the Secretary General of the WTO, Pascal Lamy, at the heart of the discussion is the future of agricultural protectionism.

“On that, Britain has long argued that we need to have a long-term view of agricultural policy in our own countries.

“The paper which Margaret Beckett and I have published today contributes to the debate already under way on how to achieve a sustainable future for agriculture and helps answer those who have asked what the UK Government means when it calls for further CAP reform.

“And it is because we believe that, through reform, there can be progress on trade, we continue to argue for an ambitious and balanced outcome to the Hong Kong meetings.

“Countries now being urged to move on services and non-market access may be prepared to make progress if there is willingness to take steps on agriculture.

“It is this we must discuss internationally in the next few days.”

As president of the G7 in 2005, Britain has put help for developing countries at the top of the agenda.

A deal on trade at the end of the Doha development round is regarded as an essential complement to the offers of improved aid and debt relief made at Gleneagles in June.

Mr Brown will use the two-day gathering beginning today in London to lobby fellow G7 members the US, France, Germany, Italy, Canada and Japan to come to an agreement in Hong Kong.

He has also invited China, India, Brazil, South Africa and Russia to join the talks, as a mark of their importance in the globalised economy.

Downing Street today revealed that Britain could call a heads of government summit on trade ahead of Hong Kong.

The gathering was proposed by Brazilian president Luiz Inacio Lula da Silva “as part of the attempt to re-energise the run-up to Hong Kong”, said British prime minister Tony Blair’s official spokesman.

The spokesman said the decision on whether to go ahead with the meeting would depend on the outcome of this weekend’s G7 talks and whether Britain and other states regard it as “worthwhile”.

The G7 representatives will today meet finance ministers from Israel and the Palestinian Authority at the Treasury to discuss financial support in the aftermath of Israel’s withdrawal from the Gaza Strip.

They will enjoy a working dinner at 11 Downing Street tonight before holding the main session of talks tomorrow, ranging across trade, growth, development and risks to the global economy.