Another dilemma: EU money for high-tech or food innovation

Another dilemma: EU money for high-tech or food innovation

Galileo, the satellite navigation system and the European Institute of Technology EIT, two of the dream projects of European leaders got the financial backing of the European commission, the executive arm of the European Union.

The Commission last week decided to overlook the welfare of the European citizens with proposals to finance the extra 2.4 billion Euro for Galileo and yet another 309 million Euro for the European Institute of Technology (EIT) through a smart revision of the Financial Framework 2007-2013. The proposal will enable the commission to transfer 2.189 billion Euro from the agriculture budget within the margin available in 2007 and 2008 under heading “Preservation and Management of Natural Resources.”

According to common knowledge, the “Preservation & management of natural resources” programme is intended to assist European farmers in the EU citizens’ demand for safe, quality food, produced without unnecessary waste, and a healthy environment. In 2003-4 the reforms of the Common Agricultural Policy (CAP) were ending to a large extent the unhealthy link between subsidies and production. Farmers are since then free to produce what consumers want in a truly competitive market, while ensuring higher standards of environmental protection, food quality and animal welfare.

Moreover, the commission had announced proposals to increase spending on Rural Development to boost growth and create jobs in rural areas - in line with the Lisbon Strategy. Thus the money was set for use not only for innovation and diversification but also for more agricultural activities.

In its quest to quench the thirst of scientific programmes, the Commission announced that these funds which were meant for the benefit of the European citizens won’t be needed, thus leaving a staggering margin of two billion Euro under the ceiling in 2008. To a layperson, this can not be explained as price tags on food shelves are renewed upward everyday and coming after a long period of relative price stability in the food sector. This is more than obvious to every person. Prices of milk and dairy products, vegetables oils have climbed up and the latest flour and bread price hikes have made headlines in all media outlets with Italians deciding to go without pasta one day recently.

The wave of demand that is sweeping across the Continents is also helped by panic buying on the Asian and South American areas as food shortage looms. Although harvest failures, crop mismanagement and other causes can not be ruled out, there is a clear cut case of high subsidies in the European Union for valuable fields being set-a-side and as high subsidies are pushing for the production of energy raw materials.

According to media reports, this year in Germany alone two million hectares out of the 12 million hectares arable land or about 17 percent of the total is dedicated for energy crops. The obvious fallout is on the areas for cultivation land for food and feeds.

On the heels of this turmoil came the tug-of-war between French President Nicolas Sarkozy and European commissioner for Agriculture and Rural Development, Mariann Fischer Boel. With Sarkozy throwing his weight behind communitarian preference, the commissioner, during the informal meeting of agriculture ministers in Portugal, rejected that the future CAP will be based on the principle of communitarian preference that favours the domestic agricultural productions.

The spokesman for Commissioner Boel declared that “It is not in our interest to turn the communitarian preference as a strength of European agriculture,” since the EU has become a net agricultural product exporter. We see opportunities to export our foods of quality in markets like China and India,” and added that the communitarian preference can only be used “in relation to our international obligations within the framework of the World Trade Organization.”

Stressing the need for an European protectionism policy while talking in the negotiations in the WTO, Sarkozy declared that “the developing nations want the rights of the big nations, but they must also accept the obligations, consider that they have only rights and have no obligations in a system of multilateral commerce” and emphasised this to India, China, Argentina and Brazil.

The French president added that “We cannot impose rules to our producers” and at the same time allow imports from other countries that impose the “environmental, social, fiscal and monetary dumping.” Sarkozy stirred not only strong reaction from commissioner Boel but also from trade commissioner, Peter Mandelson, who declared that accusations of the social dumping cannot be made because that would mean that the developed countries are not prepared to accept the comparative advantage that grant the low labour costs of third countries.

With this war of words going on at the top level, the farmers have nothing to gain except to miss out on a European tool to produce what consumers want in a truly competitive market, while ensuring higher standards of environmental protection, food quality and animal welfare. Last, but not least, it is incomprehensible for ordinary European citizens to fid that the Commission on one hand, reiterates at every possible opportunity strong interest in innovative farming and the creation of jobs in rural areas - in line with the Lisbon Strategy while on the other hand it is ready to siphon money out of agricultural sector to pump into high tech satellite applications. Only time can tell which one of the two can generate more jobs: Satellite industry or applied agricultural innovations.