The Economist / February 3, 2001 U.S. Edition
A new type of farming?
FARMERS and consumers alike in Germany have caught mad-cow disease--that is, panic about it. Bad news for the European Union's second-biggest agricultural producer (and subsidy-eater), but not altogether bad for other countries. The spreading BSE crisis, which has chopped EU beef consumption by 27% in the past three months and sent prices tumbling, is concentrating minds on the EU's farm policy as it prepares for eastward expansion and fresh world-trade talks.
The first BSE-afflicted cow was found in supposedly safe Germany in November. Only 24 more have so far been confirmed. But beef-eating has fallen by more than a half, prices by over a third. One German in three has given up eating beef entirely. Three in four say they are worried--compared with one in ten in Britain, where 180,000-odd infected cattle have been found. Germany's former health and food ministers have paid with their heads.
Ever adept at making a virtue of necessity, Chancellor Gerhard Schroder has pounced on the crisis to announce a complete reshaping of Germany's farm policies--and so to boost his image as a reformer. From now on, consumers' interests, not farmers', he says, are to be put first. He has appointed a Green--Renate Kunast, a woman with no previous links with farming--to head a revamped ministry responsible for consumer protection, food and agriculture, in that order. Intensive farming is out; environment-friendly and organic farming in. The yearly DM11 billion ($5 billion) of subsidies dished out to Germany's farmers--who number 420,000, less than half of them full-time--are to be redirected accordingly. The "howls of protest" the chancellor predicts from the powerful farm lobby are, he says, to be strictly ignored.
Hitherto, Mr Schroder has shown no more interest in environmentally-friendly farming than any of his predecessors. Like them, he wanted as much produced as cheaply as possible, little matter how it was done. Under the EU's "Agenda 2000" farm reform, approved during Germany's presidency of the Union two years ago, governments are allowed to use up to a fifth of the direct farm aid they receive from Brussels to promote environmentally-friendly farming and rural development. Yet Germany had shown little interest in this.
Now Miss Kunast plans to use these funds to boost organic farming, which is practised on less than 3% of Germany's farmland today, to 10% within five years (as already in Austria, though in most EU countries the figure is more like 1%). By 2010, Miss Kunast hopes to see organic foods hold 20% of the market, but she accepts this may be the limit for foods that are today--and probably will remain in future--far more expensive than the products of conventional farming.
Even if her hopes come true, organic farming cannot cure all farm ills, so much of her energy will still be directed at making things better on ordinary farms. How? The details of her ideas will be revealed on February 8th, but proposals already put forward include linking farm subsidies to far stricter environmental and animal-welfare standards; more aid for smaller farms, and less for larger, supposedly more intensive, ones; a new national food-safety agency; and a new national food-quality labelling scheme. The government will also stop supporting research into genetically modified crops.
Meanwhile, the government is struggling to contain the threat of a BSE epidemic. It has introduced mandatory BSE tests for all cattle from the age of 24 months, instead of the EU's latest requirement of 30. And despite widening demonstrations by angry farmers, it continues to insist that wherever a single mad cow is found, the whole herd must immediately be slaughtered.
Miss Kunast has also reluctantly agreed to go along with EU plans to buy and destroy some 400,000 healthy German cattle, despite her own strong "ethical reservations". The aim is to get rid of up to 2m beasts across the EU, and so to stabilise prices. But even this may not be enough. The EU's farm commissioner, Franz Fischler, this week described the state of the beef market as "alarming". The BSE crisis was, he said, threatening to stretch the EU's budget to its limits; beyond them, his officials later added.
He had earlier strongly backed Miss Kunast's efforts to promote environmentally-friendly reforms, saying that when subsidies were used to protect animals or the environment rather than support prices, there should be "no problem" at the World Trade Organisation. (Whether American livestock farmers will see things that way is another matter.) So such a switch could be in farmers' interests, said Mr Fischler; Miss Kunast would "not have to break down doors in Brussels", he declared. "They are already wide open."
Copyright 2001 The Economist Newspaper Ltd. All rights reserved:
