Farm subsidies are not the big threat

Market monopolies and not subsidies are the biggest threat to economic sustainability in world agricultural markets, says an international expert.

Belgium-based AgriCord managing director Ignance Coussement said the existence of the monopolies made it difficult for smaller farmers around the world to compete against larger scale ‘‘industrialised’ farmers within a nation’s domestic market.

How smaller family farming enterprises competed against these larger scale farms in the market was a tricky issue, he said.

‘‘The reality is for family farmers is to find a way to cope with that. Lets be realistic on that, the biggest danger comes from monopolies, from agriindustries that are too strong and control markets [that] control every aspect of marketing.’’

Farmers had to be competitive and the best way for smaller farmers to achieve that were to form co-operatives.

Coussement was speaking at a panel discussion on sustainable solutions for global agriculture taking place at the International Federation of Agricultural Journalists’ annual congress in Bonn, Germany.

Coussement’s organisation, Agricord is an international alliance of 200-300 farmer-based agricultural agencies in more than 60 countries.

He said it made sense to have subsidies in countries that had to compete against cheap mass-produced imports.

The role of subsidies was a subject of intense debate at the United Nations Framework Convention on Climate Change (UNFCCC) programme manager Katia Simeonova said.

From an economic purist’s perspective, subsidies were very important to introduce change in the way industries were working and the products that were produced.

‘‘But it’s also well known [in the] longer term, maintaining the subsidies leads to distortions of the market and reducing its efficiency.’’

In theory, subsidies should not be maintained over the long term, Simeonova said. However, subsidies were linked to broader social objectives within countries such as rural development and employment.

It was also linked to more sustainable development policies.

A German Federal Ministry of Food and Agriculture report estimates German farmers received an average of €31,225 per farm.

When broken down, that included €318 per hectare in direct payments, €101/ha in other payments including agri-environmental programmes.

In justifying the payments, the ministry said farmers provided a variety of services for society which were not really remunerated by any market earnings for their products.

Within the European Union, about €59 billion a year was spent on farm subsidies, according to the website Farmsuibsidy.org.