draining pot for plants – Nature Agriculture

October 17, 2023

Fischler truly viewed his task in these reforms as saving the CAP from collapse

Germany also took action, replacing its SPD farm minister, Karl-Heinz Funke, with Green Party member Renate Künast, a Fischler ally and vocal advocate of CAP reform. Künast advocated strict standards for animal welfare, tough environmental regulation, and greater oversight of and limitations on industrial farming. Prior to the MTR, commitments to meaningful environmental measures were tepid at best. Environmental policies were optional, and implementation was left to the discretion of member states, who mostly ignored them due to farmer resistance. The series of food scares increased pressure on the CAP from consumers, environmentalists, and animal welfare advocates. Public opinion of the CAP in these matters was quite negative. While 90% of respondents in a 2001 Eurobarometer poll expressed a belief that the CAP should “ensure that agricultural products were healthy and safe”, only 36% thought that “food bought could be safely eaten” and just 34% felt that “food bought is of good quality” . As a result, Fischler saw an opening to push for meaningful, mandatory reforms that would increase food safety and security, including the adoption of environmental and animal welfare regulations. There was also a growing recognition among the public that farmers were significant polluters . According to Eurobarometer surveys in 2001 and 2002, just under 90% of respondents stated that the CAP should be used to “promote respect for the environment” while only 41% of respondents across the EU 15 felt that the current version of the CAP actually “promoted respect for the environment” . The environmental goal was second only to the objective of “ensuring the agricultural products are healthy” . The CAP bore the brunt of the blame for agricultural pollution,hydroponic container system given that it allowed for the industrialization of agriculture and by extension tacitly promoted the use of environmentally damaging farming practices, designed to extract the highest possible yields. A final problem confronting the CAP concerned the distribution of benefits. The CAP directed most of its support to only a small number of farmers. For example, in France, 40% of all aid went to fewer than 10% of French farmers, overwhelmingly the large cereal cultivators .

This problem, known variously as the 80/20 problem or the “Queen of England Problem” had plagued the CAP for a number of years. Reformers were under pressure to, if not correct this imbalance in support distribution entirely, at least attenuate it. The unequal allocation of CAP benefits, and reports in the press about disparities in payments received by large and small farmers, led Fischler and his associates to be concerned that public opinion would turn against the CAP. Declining public support was a real worry because EU officials, particularly other Commissioners, already questioned why such a large sum of money was being spent on an increasingly small faction of the population. The challenges and opportunities posed by enlargement, WTO negotiations, and poorly operating CAP programs offered Fischler and his associates an opportunity to propose far reaching reforms of the CAP under the auspices of the MTR. Such reforms were seen by Fischler and his team as necessary to “reduce the ammunition of those demanding large budget cuts and [to] create a new support base for the CAP” . If the CAP remained unreformed, unsustainable spending and environmental destruction would make it an easy target for other commissioners and member states who preferred a much slimmer CAP budget. Their case would be helped by increasingly negative attitudes from the general public. As Pirzio-Biroli, Fischler’s deputy, noted, “[we] concluded that, if we wanted to preserve the CAP, we needed to change it” . Fischler’s agenda was not just about cutting spending . Rather, he sought to reform the CAP to save the CAP- most notably by making it financially sustainable, viable under enlargement, compatible with WTO rules, and responsive to public concerns about food safety and the environment. Some critics saw Fischler as a bean counter, looking to make cuts wherever he could to get CAP spending under control. While it is true that Fischler was attempting to radically restructure CAP spending, these critics misread the motives behind his actions. Fischler was himself a former agricultural minister. He was seeking to reform the CAP and to make cuts not to please his colleagues in Brussels, but rather to make sure the CAP continued to be viable.

Fischler benefited from a high degree of personal credibility within the Commission, having been a minister of agriculture and the leader of Austria’s accession negotiations. He was considered to be both an expert on agricultural policy and a reform-minded official, who was willing to pursue the tough changes necessary for preserving the overall health of the CAP, no matter the criticism he might face from farmers or their member state representatives. As evidence of the high regard in which Fischler was held, Commission President Romano Prodi completely devolved agenda-setting competency to Fischler and reportedly “had no firm ideas one way or the other about agriculture and issued no directive to Fischler about how or whether to reform” . Although the MTR was intended only to be a health check and not a revision of existing CAP policies, Fischler believed that the CAP needed much more than a status report on the functioning of existing programs. A program that could neither work within the EU budget nor meet basic environmental and health standards ran the risk of being cut drastically by European technocrats, if not entirely eliminated. In addition, without reform, the CAP would stand to be an anchor inhibiting the EU’s ability to negotiate in the Doha Round of WTO negotiations. Fischler thus constructed his reform objectives around making those changes necessary to ensure the CAP’s long-term survival. If he did not reform the income payment system, new member states would explode the budget beyond sustainability. If the CAP remained an obstacle for European services and manufacturing in trade negotiations, these external actors would force deep and unpleasant changes to CAP programs such that European agriculture no longer tied their hands. In other words, failure to reform the CAP could spell the end of the CAP. Fischler’s central goals were to decouple CAP payments from production and to expand the environmental scope and standards of CAP policy . The first goal, decoupling, would help reduce the vast disparity in CAP income payments, whereby 80% of CAP income payments went to only 20% of eligible farmers. It would also put CAP spending into conformity with WTO rules. The second goal, improving environmental standards, would address growing public dissatisfaction with the effects of CAP policy on food safety and the environment. Decoupling would go a long way towards ensuring that the CAP remained financially viable in an enlarged Europe,planter pots drainage while mandatory environmental standards and regulations would make certain that newly-added agricultural land was protected as well as guarantee that food produced in Eastern Europe would meet the higher quality and safety standards already in place in the West. While there had recently been high-profile incidents of food-borne illnesses, overall safety and quality standards and rules in the West were much higher than those in the East. Without these changes, the CAP would be overwhelmed by the financial strain of supporting the new member states, would be challenged by Europe’s trading partners, and would lose public support due to its social and environmental consequences. Fischler had learned several lessons from the Agenda 2000 negotiations. During Agenda 2000, the early publication of reform proposals allowed vested interest groups the opportunity to mobilize and undermine initiatives before they could even be launched .

Farmers in particular, once tipped off about the contents, had moved to lobby their governments to oppose reforms before any discussion or formal presentation and explanation of the proposals could occur. Fischler, therefore, resolved to develop the MTR behind closed doors, like MacSharry had done with his 1992 reform. By working first in secret, Fischler would be able to propose a reform that called for dramatic and far-reaching change—more than was expected under the MTR. A more open development process would leave the agricultural directorate susceptible to interference from the member states. Given that a number of member states wanted the MTR to be nothing more than a review, Fischler opted to keep his proposals under wraps until the time was right. Secrecy also gave Fischler and the Commission a research advantage: they could collect and gather evidence so that when the reform proposal was presented, Fischler would be able to provide data to support his proposals . The member states would then be forced to play from behind in order to mount specific, evidence based criticisms of the Commission’s reform package. Because the content of proposals would be a surprise to the member states, they would be unable to make specific, detailed claims about the effects of reform, and any general reactions, like claiming the reforms would hurt farmer incomes, could quickly be refuted by the Commission, armed with data and evidence. Another key and more personal lesson that Fischler had learned was to be wary of French President Jacques Chirac. When speaking about his adversaries in CAP negotiations, Fischler stated, “my biggest opponent was Mr. Chirac” . The two had tangled multiple times in the past. Fischler described Chirac as an “intelligent and crafty politician who knew a great deal about agriculture and could manipulate political rules to his advantage” . Fischler recounted that at the Berlin Summit, where Agenda 2000 would be formally adopted by the European Council , Chirac “used a trick” to reopen and revise the agreement . First, Chirac exploited his personal relationship with German Chancellor Gerhard Schröder who held the rotating presidency at the time. Because the CAP was part of the new Multi-annual Financial Framework , the summit chair could open any component of the MFF for debate and reform. Second, Chirac used a complicated rule in the operation and calculation of the CAP budget to compel other member states to abandon a dairy reform that Chirac did not like29. Fischler “was furious because the reform was already agreed to, but Chirac went back and undid the work” . Fischler learned the hard lesson that even when the agreement was concluded in the Council of Ministers, he still needed to make sure the holder of the rotating presidency did not reopen the CAP portion of the MFF at the European Council summit meeting. Fischler’s rocky relationship with Chirac continued after the Berlin Summit. Following the Agenda 2000 reform, Chirac unsuccessfully appealed to Commission President Prodi to not renew Fischler’s post as agriculture commissioner for a second term. When asked specifically about the MTR, Fischler again identified Chirac as one of his biggest adversaries . During the MTR negotiations, Fischler, however, benefitted from the lessons he had learned from the Agenda 2000 reform process and was better positioned to manage and respond to Chirac.Fischler’s initial plan was sent to the Commission on 10 July 2002 after months of study and work conducted largely in secret by Fischler and a small group of associates, including his Deputy Director, Corrado Pirzio-Biroli. The small group included only the top officials at DGVI. These officials relied on studies and analyses by experts within the DGVI administration, who conducted preparatory analysis and calculated potential effects of the reforms but were not fully informed of overarching agenda. Otherwise, Fischler and his associates preferred to keep the civil servants in the dark. Because CAP reform would force DGVI civil servants to change how they worked and adopt new, often complex and cumbersome systems, Fischler thought it unwise to reveal the extent of the plan to them. Fischler was also concerned that the civil servants might leak aspects of the program to their permanent representations, allowing the member states to begin to mount a defense before he could announce his reform package . Retrenchment-minded welfare state reformers are also known to work in secret. Keeping potential reform proposals out of the public debate and masking the costs of new policies and reforms are strategies commonly used by welfare state reformers to avoid resistance from those who stand to lose.

July 24, 2023

The Japanese Government continues to impose a high import tariff on fresh oranges

Trade remedy laws are intended to offset “unfair” trade that injures domestic producers as a result of either foreign sales that are “dumped” into the U.S. at less than fair value or influenced by foreign government subsidies. The regular use of trade remedy laws within NAFTA illustrates the fact that any transition to freer trade in agriculture, even between countries at relatively similar stages of development, may be politically difficult. An example of the agricultural trade tensions between Canada and the U.S. is the recent “tomato wars,” in which U.S. producers accused the Canadians of “dumping” tomatoes in the U.S. market. In October 2001, the United States government made a preliminary ruling that Canadian growers were dumping greenhouse tomatoes into the United States at prices below the Canadian cost of production. As a result of this finding, Canadian sales into the United States were assessed an average tariff of 32 percent. Several weeks later, the legal tables were turned as the Canadian government initiated an anti-dumping investigation against the U.S. fresh tomato industry . The Canadian counterclaim may not have been a coincidence. Rather, it may have been a tit-for-tat reaction to the steep U.S. duties imposed on Canadian greenhouse tomato sales to the United States. By July 2002, both cases were resolved with identical rulings of no material injury. While U.S. exports of fresh tomatoes to Canada declined 10 percent over the previous year during the period of investigation,planter pots drainage Canadian imports of greenhouse tomatoes to the United States actually increased 17 percent over that year .Despite the fact that Japanese agriculture receives high levels of government support and has limited market orientation , it is also the world’s largest net importer of agricultural products. The United States supplies roughly one-third of Japan’s agricultural imports, and in 2002, Japan’s agricultural imports from the U.S. were valued at $8.3 billion .

About 20 percent of these U.S. exports to Japan originated in California. Japan is California’s third largest export market for agricultural products, with rice, cotton, almonds, beef, and oranges ranking as the top commodities . Japan’s weak economy has dampened its total agricultural imports in recent years . In the 1990s, the most significant import growth in Japan was in the area of fruits and vegetables, wine, and beef . More recently, grains and oil seeds have done better . Japan continues to restrict imports of horticultural products, livestock products, and processed foods, all of which are important exports for California. Recently, beef exports to Japan were halted in response to the BSE scare in Europe; and Japan continues to consider implementing a “beef import safeguard,” which could further lower imports even further. At the time of this writing, Japan had halted all imports of U.S. beef, due to the discovery of BSE in the U.S. . Citing phytosanitary concerns, Japan blocks imports of U.S. fresh fruit, vegetables, and other horticultural crops, keeping Japanese domestic prices of horticultural products artificially high. Government subsidies are also provided to farmers to encourage them to divert land out of rice production and into vegetables . Japan also has country-of-origin labeling requirements for agricultural products that principally affect fruits, vegetables and animal products . This acts as a non-tariff barrier to trade. Japan maintains high tariffs on beef, citrus, and processed foods. In addition, imported high quality California rice is strictly controlled and rarely reaches the consumer food table in Japan. The over quota rice tariff in Japan exceeds 400 percent. Until recently, Japan’s system of food imports used mainly non-tariff barriers such as quotas and licenses, instead of tariffs. Sazanami et al. found that Japan’s tariffs on food imports averaged only 8 percent, but the quantitative import barriers averaged 272 percent, with the rice tariff equivalent barrier at 737 percent. Despite the tariffication required by the Uruguay round of trade liberalization, of Japan’s agricultural imports remain highly protected . In addition, Japan continues to use health and safety regulations to serve as barriers to trade.In the case of fresh oranges and lemons, the U.S. is the largest supplier to Japan, accounting for over 80 percent of Japan’s imports.

Other exporters of oranges and lemons of lesser importance in Japan are Australia, Chile, and South Africa.The tariff rate is 32 percent for imports during the December-May period, and 16 percent during June-November. California’s second most important market, the EU, provides export subsidies for beef, cheese, other dairy products, and processed fruit, in competition with California. It also provides generous production subsidies on horticultural products such as tomatoes, grapes, peaches and lemons. The EU’s subsidized production of these products affects California’s competitiveness in third markets. More generally, the EU’s Common Agricultural Policy significantly isolates European farmers from international competition. The CAP is a system of subsidies and market barriers that include mandatory land set-asides, commodity specific direct payments, and export subsidies . Support to agricultural producers as a share of total agriculture receipts is 40 percent higher in the EU than in the U.S. . Much of this support comes in the form of higher prices paid by domestic consumers. Recently, there has been increasing pressure to significantly reform the CAP; the program has been called by the popular press an “extravagant folly” and “demented” . These publications and others have argued that reform of the CAP will be a critical element of the next round of trade negotiations, if these talks are to be successful. Enlargement of the EU to include ten Central and Eastern European countries will also create pressure for further reform. Structural reforms of European agricultural policy will have important implications for California, both because the region competes in third markets with California, and because the region is an important customer, as discussed earlier. If the existing EU agricultural policy is applied to the 10 new member countries, the incentive will be to increase production and agricultural exports. Several of the new member countries have a comparative advantage in agriculture, especially in the area of wheat, coarse grains, and livestock. California agriculture will benefit if this expanded production results in budgetary pressure to reform the CAP. In addition, California agriculture may well benefit from projected income growth in Central and Eastern Europe that results from EU membership. Higher incomes in this region will lead to increased demand there for high-valued food,draining pot for plants of the type exported from California. An ongoing trade dispute between the US and the EU concerns the use of geographical indicators . The EU wants to prohibit foreign producers of food and beverage products from labeling products with European regional names .

The list of products that will receive this protection is an on-going subject of negotiation at the WTO. For California there is a trade-off associated with GI protection. On the one hand, California would have to stop using certain names if the EU is successful . On the other hand, California agriculture could use GI protection to develop niche markets for its food and beverage products, potentially capturing a price premium.Mexican agricultural trade is highly dependent on its two partners in NAFTA. Agricultural provisions were an important component of the NAFTA agreement , with agricultural tariff and non-tariff barriers being phased out over varying time periods up to 15 years. Within U.S. and Mexican agriculture, some groups supported the agreement while others opposed it. In response to these concerns, NAFTA gives special consideration to the centrality of corn in Mexican agriculture, so the country maintains significant tariffs on corn imports even as other trade barriers have been removed more quickly. In 2003, the tenth year of the NAFTA agreement, a new round of tariff reductions within the free trade area came into affect. These tariff reductions are expected to significantly affect Mexican farmers, who will face new competition from American and Canadian producers in such products as potatoes, barley and wheat, and, importantly for California, cotton, fresh apples, frozen strawberries and certain milk products . According to reports in the popular press, the competitive pressures generated by NAFTA have been economically painful for Mexican producers. This is at least partly due to the fact that structural inefficiencies in the Mexican economy increase costs of production and marketing . Some Mexican policymakers suggest that it is also a result of the subsidies received by U.S. farmers that the Mexican government cannot hope to match . At the outset of NAFTA, there was significant opposition to the agreement from U.S. agriculture. Opposition came from producers of wheat, sugar, peanuts, citrus, and winter fruits and vegetables . Some agricultural interests in California opposed NAFTA because of fear of competition from low-wage Mexican agriculture in the production of labor-intensive crops. Proponents argued that NAFTA would drive down agricultural wage rates in California and thus restore the competitiveness of California’s agriculture. Factor price equalization lies at the root of the debate over the effects of liberalized trade on the competitiveness of California agriculture precisely because a large percentage of California’s agricultural production is labor intensive, using a relatively high proportion of labor relative to other inputs such as land and capital. This includes the production of fruits and vegetables, nuts, and various horticultural crops, where labor costs range from 20 to 50 percent of total production costs .

Prior to NAFTA these crops were protected by import tariffs ranging from 5 to 30 percent, and other non-tariff barriers such as marketing orders. Much of this labor is unskilled and most of the workers are immigrants from Mexico. This labor-intensive production means that California and Mexican agriculture differ less than might be predicted by comparing incomes per capita; thus the two regions are likely to compete against each other in third markets. Despite protectionism on both sides of the border, there has been progress towards freer trade and cross-border investment between the U.S. and Mexico since NAFTA. For instance, in 1996 the U.S. opened its market to Mexican avocados for the first time in 82 years. Prior to this ruling, phytosanitary rules banned unprocessed Mexican avocado imports and provided considerable protection to California growers.The U.S. decision to import avocados will extend beyond that single market and probably help in alleviating trade barriers to Mexican peaches, nectarines and cherries. Accumulated U.S. investment in Mexican agricultural production equaled $45 million from 1994 to 1997, with even greater investment in the food processing industry in Mexico of about $5 billion in 1999 .California agriculture receives relatively few subsidies from the federal government compared to other states. However, California does benefit from several programs designed to either explicitly subsidize exports or promote demand for California products in foreign markets. Funding for these programs continues in spite of the public commitment by the U.S. government to phase out export subsidies, and the cap placed on this form of support by WTO commitments. The programs that explicitly subsidize exports are the Export Enhancement Program and the Dairy Export Incentive Program . The Market Access Program and the Foreign Market Development Program subsidize the cost of market development activities overseas. A new program called Technical Assistance for Specialty Crops Program is intended to fund projects that address technical barriers to the export of specialty crops. Among these programs, the most important to California producers is the MAP, which received increased funding in the 2002 Farm Bill. In this subsection, we describe each of these programs, and their importance to California agriculture.The 2002 Farm Bill, as with previous Farm Bills, authorized Export Enhancement Program export subsidies for such commodities as wheat, rice, barley, eggs, and frozen poultry. FAS authorizes export subsides for these products either when prices are low or as “self-defense” when other countries engage in what FAS defines “unfair” trading practices . The 2002 Farm Bill allocated $478 million annually to EEP , but the share of this subsidy that will flow to California will probably be small. In recent years only frozen poultry has qualified for EEP subsidies , because world market prices have been sufficiently high for other eligible commodities, though the potential scope of the EEP was expanded in the 2002 Farm Bill. This may increase the size of the EEP subsidy captured by California producers.