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Private Eye/Muckspreader 31 August 2004

There must still be many people who, if asked what is achieved by the common agricultural policy, would reply that it pays the EU’s farmers to create huge food surpluses, such as those famous grain, beef and butter mountains. Certainly that was true 20 years ago, when EU production subsidies played a leading part in building up a worldwide grain surplus equating to 123 days of world consumption, or more than twice as much as the UN’s Food and Agriculture Organisation then viewed as a safe minimum.

But through much of those 20 years Brussels has been laboriously battling to reduce those surpluses, to the point where it has at last persuaded the EU’s member states to end the link between subsidies and production altogether. As from this year, farmers will begin to be paid not for what they produce, but simply for the amount of land they farm. The so-called ‘single farm payment’ system has been hailed as a triumph, not least because it is linked to new rules which put keeping farmland in good environmental shape ahead of the need actually to grow anything on it.

At just this moment when it has taken 20 years to turn the CAP supertanker in a new direction, however, comes the shattering news that, far from the world producing too much food, it is no longer producing anything like enough.The key to the looming crisis is the dramatically changing situation of China, with a quarter of the world’s population, which for the first time in history this month became a net importer of grain. The problem lies not just in China’s fast-growing population and rapid industrialisation, but her desperate shortage of water. Only 12 percent of China’s land area is suitable for agriculture, and 70 percent of this requires irrigation. But so much water has been taken away from the land for industrial and other uses, and so much of what remains is now dangerously polluted, that in just five years the area of land under cultivation has fallen from 92 million hectares to 76 million: a drop of more than a fifth.

The result is that, within five more years, experts predict, China will be having to import 50 million tons of grain annually, much more than any other country in the world. And this is at a time when the gap between the world’s consumption and production has already widened to 105 million tons, more than five percent of production and the largest deficit ever recorded. World grain stocks have now fallen to just 60 days of consumption, less than half the figure of 20 years ago, and ten days less than what the FAO now regards as providing necessary insurance against poor harvests and unpredictable weather.

All this coincides with just the moment when the EU has at last ‘solved the problem of food surpluses’, so that its own production is anticipated to be heading for a dramatic fall. In other words, just when the EU should be encouraging its farmers to raise production, to plug the yawning world deficit and to ensure that Europe can continue to feed itself, Brussels is taking every possible step to encourage farmers to cut back. If it took 20 years to turn the ship round to cutting production, how long will it take to put that policy into reverse, when so much more food may soon be desperately needed?