In the debate on the EU’s Financial Perspective, British Prime Minister Tony Blair has linked the future of the UK rebate to a new reform of the European farm policy, but stiff opposition from France and other farm subsidy beneficiaries has made Mr Blair unsuccessful with his European colleagues. The CAP (short for Common Agricultural Policy) is also under fire at the trade negotiations for the Doha Round, where developing countries accuse the EU (and the US) of protecting their agricultural markets with high subsidies.
The report states that the current farm system costs an average EU family of four around 950 euros a year. It also produces considerable social and environmental costs. The report recommends:
- abolishing all price supports, export refunds and other production and consumption subsidies;
- integrating agriculture within EU competition policy;
- basing all spending for agriculture on current Pillar II ('rural development').