Those French farmers are at it again

Stories of the EU "overhauling" its farm subsidies are coming off the wires today. If only they were true

If you have a herd of cows and a flock of sheep, what's the collective term for the mass of conflicting news stories coming out today on the meeting of EU farm minister in Brussels overnight debating the future of Europe's archaic farm subsidies? A gaggle? A cloud? A murmuration?

The BBC is reporting that the ministers have agreed to shift subsidies further away from production and to liberalise the dairy market. The International Herald Tribune has described the deal as an "overhaul" representing "the biggest reform of European farming policy in five years", while Melbourne's Age calls it a "revamp". According to the IHT:

The measures, which cover the period from now to 2013, are aimed at revamping a decades-old system in which farmers automatically earned money for farm products whether there was market demand or not.

The Age says:

The changes expand on major CAP reforms in 2003, pushing European farmers further into the world of supply and demand with a smaller safety net of subsidies linked to production levels.

Specifically, the measures include dropping the rule that farmers must keep 10 percent of their land fallow and a gradual rise in milk quotas until they disappear in 2015. Subsidies for tobacco are cut, while other funding goes more towards conservation and regional development.

It looks like progress, but before we here in New Zealand go into our usual squeals of excitement at any freeing of global trade, there's a swarm of skepticism being reported as well.

For a start it's worth noting that the French pushed through this deal. And the general rule of thumb is that if it's good for the French, it's bad for us. The French Agriculture minister, for example, is still insisting that milk quotas won't be scrapped without "precautions being taken", saying the agreement gave European farmers more protection and offered more balance in government support to different types of farmers. So much for supply and demand. Around 40 percent of the EU's budget goes into the complex and corrupt Common Agricultural Policy. It's worth around nine billion Euros for France alone.

The Daily Telegraph says pro-reform Britain, which wouldn't support the deal, was out manoeuvred by France. It points to a "back door" measure that will allow countries to recycle unspent farm subsidy cash worth several hundred million dollars direct to farmers. Its story included this comment:

Peter Kendall, President of the National Union of Farmers, criticised talks that were "less of a health check, more of a further fix for addicts of distorting measures". "While some of the measures move us forward to our goal of a simpler, more level and more market focused CAP, others lead in precisely the opposite direction," he said.

Under the headline "France’s sneaky plans to continue Europe’s farming follies", the Economist is probably the most scathing about where these reform conversations are headed. After the G20's call to re-start the Doha trade round and given the global recession, France especially is under immense pressure to liberalise. Nicolas Sarkozy is not impressed, mais non.

But the French also know that the political costs of blocking a trade deal have risen. It would give the next American administration “all kinds of excuses” to water down other multilateral plans to save the world.

So it is forming a defensive huddle, looking to concede some policies to the open market, but demanding cash and some protection post-2013 in return. A French policy paper doing the rounds – it's unclear whether this was the paper voted on overnight or not, as the Economist story seems to pre-date the announcement –  still favours "community preference" of EU crops, "market stabilisation" (the public purchase of food is prices drop) and maintaining "regional cohesion" (ie, preserving farms in every French province, even if they're not economically viable).

Really, it remains a terribly confused picture. All the talk of dealing to this recession and helping emerging countries emerge further still comes to a grinding halt when it comes to those blasted French farmers (and all the other European vested interests they stand for).

We seem to be getting tiny gestures of liberalisation to give the impression of movement, while most of the loot stays clasped firmly to the farmers' chests. Perhaps it's nothing more than a plague of news stories.