The protectionist policies of the CAP are slowly being eroded by the implementation of the Uruguay Round of GATT negotiations (1986-1994). Agriculture has been the most difficult sector to bring under the GATT treaty, largely because industrialised countries have been reluctant to give up their protectionist agricultural policies. In the 1950s, the US Congress obtained a legal �waiver� from GATT obligations, which set the precedent for other countries to withdraw GATT compliance without this legal cover.

Attempts to bring agriculture under the treaty, largely motivated by American companies that felt restricted by cheap EU exports, failed during the 1960s and 1970s. However, extreme pressure from the Calms group of 18 agricultural exporting countries ensured that agriculture was the central topic during the Uruguay Round. Despite difficult negotiations between the EU and US delegates (the latter being led by Clayton Yeutter, a former Cargill employee), an Agreement on Agriculture (AoA) was developed which brought agriculture under the GATT rules. This Round also relinquished the US waiver. This contract steed quite modest to some of the signatories, who wanted to completely phase out subsidies within a decade.

The AoA aims, first, to increase market access by phasing out non-tariff barriers, including quotas. The effects are to be converted to tariffs, which is known as �tarification�, one of the AoA�s central concepts. Second, the AoA reduces domestic support for agriculture. Vandana Shiva states that in India, this has meant that the only subsidies granted are for the chemical fertilisers product by agribusiness. Third, the AoA calls for reduced export subsidies. Areas exempt from reduction in developing countries include processing and transportation, which are likewise dominated by agribusiness.

Nevertheless, the US has expanded export credit guarantees; the US secretary of agriculture, Dan Glickman, cites this as �the main reason why we have not lost mare exports to Asia�. IMF loans to developing countries have also propped up US agribusiness; Mr Glickman says that without IMF actions, American agricultural exports �would have been at great risk�. Vandana Shiva concludes: �WTO rules are for preserving and enhancing corporate subsidies and withdrawing support to farmers and rural communities whether they refer to domestic support, market access or export competition.�

The effects of the AoA on the CAP are mainly visible in the reduced intervention prices prescribed by the 1992 MacSharry reforms. In 1997, as tire EU considered proposals for expansion into Easter Europe (including Poland, whose 2 million farmers would increase the demands on the CAP budget), the unelected European Commission published �Agenda 2000�, which called for further price cuts alongside an increase in income support, with ceilings on support to agribusiness to reduce surpluses. However, Agenda 2000 also dictates the end of milk quotas try 2006, a move that will increase surpluses. This decision has not been popular with European agricultural mince.

Mainstream economic opinion holds that large-scale intensive farming of single crops (monoculture) produces a higher yield. This is true but misleading, since the total output per hectare on small farms is several times greater, because of more efficient use of the land. Biodiverse farms also require less fertiliser, to the dismay of the agrochemical industry. Large-scale, intensive farming of livestock keeps animals packed together in close quarters; this leads to stringent regulations, which are also enforced unnecessarily on small farmers for whom they are prohibitively costly. Furthermore, transporting foodstuffs across the globe is grossly inefficient, and incurs a huge ecological debt.

The current pricing in supermarkets beggars belief, by implying that processed, long shelf-life foods produced far away are cheaper than local fresh food. The inefficiencies of agribusiness are masked only by the direct and indirect subsidies borne by the taxpayer.

Suggested reading: http://www.iied:org (International Institute for environment and development) Small Is Beautiful, Big is Subsidised, Steven Gorelick and Helena Norberg-Hodge (International Society for Ecology and Culture) The Case Against tie Global Economy, Edward Goldsmith & Jerry Mander. The World Trading System, John H Jackson Economics, John Sloman

Independent local networks producing new initiatives include: Small & Family Farmers Alliance, Michael Hart 01726 843 647 [email protected] East Anglia Foodlink, Clive Peckham, 01953 889 200, [email protected], http://www.eafl.org.uk Farmers Link, Norwich, 01603 765 670 (sister org. to Foodlink) http://www.londonMrTnersmarkets.com