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The SGPA (Global Support to Agricultural Production): The Per-capita Farm Support is Close to Three Times Higher in the United States Than in the European Union

June 25, 2012

PARIS, June 26, 2012 /PRNewswire/ –

The momagri SGPA indicator has come to expose a little known fact: Agricultural
subsidies in the U.S. are quite higher than the figures usually given, and very largely
exceed those granted by the European Union (EU) and its member-states.

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In fact, over $172 billion[1] were appropriated in the U.S. in 2010, against EUR76
billion in the E.U., or EUR422 per capita in the U.S. against EUR151 per capita in the
E.U., i.e. close to three times more. This observation goes against stereotypes claiming
that European farmers are the most assisted. And the gap continues to increase since 2008.

On the other side of the Atlantic, policies aim to stimulate and secure agricultural
output, from farmers to consumers, in a counter-cyclical manner, i.e. in taking market
conditions into account. One other specific feature is domestic food aid (54 percent of
SGPA in 2010), generally considered as a social subsidy, which in fact represents an
active subsidy to the American agricultural and agro-food sector, and is assessed at more
than $94 billion. The ongoing reform–the Agriculture Reform, Food and Jobs Act of
2012–is considering changing income protection mechanisms, but is maintaining the
strength of an arsenal of subsidies.

In the E.U., farm support mostly includes direct subsidies for farmers’ living
standards (64 percent of SGPA in 2010), especially incorporating the Single Payment
Schemes (SPSs), which account for 47 percent of all farm support paid in 2010. The support
rationale is geared to farmers, but is decoupled from production and market prices. The
European policy thus does not have the tools to react efficiently to price instability.
And the post-2013 CAP reform proposed by the European Commission makes matters worse,
without meeting the challenges of European farmers.

In the light of this study, momagri calls on European leaders to incorporate in the
future CAP genuine regulatory mechanisms that stabilize prices and agricultural incomes,
while introducing more efficiency in E.U. spending.

Otherwise? The E.U. must take on increased food dependence and all its consequences in
social, financial and political terms. The process has already begun, since the European
Union has by now doubled imports during the past decade, and seems to import the
equivalent of the production of 87 million acres of farmland, i.e. the size of Germany[2].

http://www.momagri.org

1. Or EUR130.5 billion (exchange rate US$/EUR 130,5 milliards EUR = 0.755, as per
OECD, 2010).

2. http://operaresearch.eu/files/repository/20111021145840_Etude-Humboldt-FR.pdf


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SOURCE momagri


Source: PR Newswire