EU agriculture subsidies, under the Common Agricultural Policy, are intended to support farmers and agribusinesses if prices for their agricultural products fall below certain levels. According to a UK audit of financial management in the EU, published in April, the represented 47 per cent of the EU's budget in 2006, some €49.8 bn.
However the budget currently has €1bn of un-spent cash in it, since food prices have not fallen. Usually this money would be sent back to the member states.
As the food price index rose by 40 per cent last year consumers in the EU have seen their supermarket bills increasing – but for the world’s poorest people higher prices of rice and maize can literally be a “matter of life and death”, said Irish MEP Gay Mitchell, the Parliament’s rapporteur on a proposal to re-direct the money.
In an interview published by the Parliament’s news service, he added: “If we can get the developing world to start growing more food, it will take the pressure off the international situation that would in turn assist us. So there are selfless and selfish reasons for doing this.”
His comments echo those of Jacques Diouf, director general of the FAO, in his opening address to the Rome Food Security Summit in June. While the focus is very much on aid to farmers in developing countries, if sustainable and viable global solutions are not forthcoming to narrow the gap between supply and demand, "whatever the extent of their financial reserves, some countries might not find food to buy", he said.
The final declaration said there is an "urgent need" to assist developing countries to expand food production and invest more in agriculture, agribusiness and rural development.
Speaking at the event on Tuesday, UN secretary general Ban Ki-Moon said that the root of the current food crisis is a need to provide more food. He said that food production needs to rise by 50 per cent by 2030, in order to meet rising demand.
The EU already has a commitment to end hunger and malnutrition under the Millennium Development goal, but efforts towards meeting the goals have slipped somewhat.
“We seem to have taken our eyes off malnutrition.”
In some counties there have been food price-related riots; in some countries that have traditionally been exporters of staples like rice, supplies are so tight that they have had to start importing. This means a drop in tariffs, and a loss-making enterprise.
It has been estimated that resolving the current food security crisis would need an extra €18bn in the medium term, according to Mitchell. (Diouf said in June that $30bn a year would be needed to secure access to food for the world's 862 million hungry people).
The EU has indicated that it will try to find €1.8bn over the next two to three years; if €1bn were to be diverted from the budget for agriculture subsidies, member states could then match it to meet the target.
How the money would be used and policed
Mitchell said that some of the money would be use to deliver food to people who need it most, where stocks of grain, for instance, are dangerously low. International organisations including the FAO are already working to identify countries with the greatest needs.
“But most of it will be used for things like sees and fertiliser and irrigation; to actually help these countries to develop and grow their own food.”
The proposal includes a requirement for transparency, accountability, and independent evaluation – with regular reporting – on how the money is spent.
Controversy
The proposal has some high profile supporters, such as Mgozi Okonjo-Iweala of the World Bank. According to a post-debate communication from the Parliament, she said: “This money is the single biggest expression of effectively dealing with the food crisis.”
However it is not without its controversies, too. There are concerns that this could set a precedent for switching money from one pot to another and open the way to a whole string of requests.
The Budget Committee has said the correct procedure would to transfer the money first to the budget heading for development aid.
Mitchell said these are “valid points”, and plans to meet with ministers later this month to discuss them in detail.
Timeline
The rapporteur stressed that the food security issue is urgent.
“We have a harvest coming up and next March is an important deadline. If we vote this money through now, we would be able to commit to spend €750m this year, in time for the harvest next year.”
There have been food price-related riots in some parts of the world; in some countries that have traditionally been exporters of staples like rice, supplies are so tight that they have had to start importing. This means a drop in tariffs, and a loss-making enterprise.