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Global Food Security

What old-style CAP defenders claim

It is the EU’s moral obligation to live from its own production. If the EU buys more food on the world market than it sells, it drives up food prices in developing countries where the very poor can no longer afford their daily bread. It may even be argued that the CAP should stimulate production more strongly, so that the EU can help feeding the world through its exports.

Mixed effects of greater EU production

It is not clear whether additional EU production and thus lower global food prices are desirable in the fight against hunger and poverty. Since the very poor tend to consume more food than they produce, lower prices probably reduce hunger in the short run. But in the long run, lower food prices depress agricultural production in developing countries. This diminishes wages for low-skilled labor, which is frequently employed in agriculture. It also reduces economic growth in the developing countries and shrinks their tax revenues that can be spent on the poor. In the balance, it is entirely possible that greater EU food imports and, consequently, higher food prices on world markets are preferable in the fight against global poverty.

Conclusion

Whether greater EU farm production exacerbates our diminishes global hunger and poverty is an open question. In any case, the CAP is a most inefficient instrument for ensuring global food security. The EU can take other measures that will be more effective. In particular, the EU can invest more into agricultural research adapted to developing country needs. More generally, reducing poverty in developing countries is the best way to fight hunger – the problem is not a lack of global food supplies but their skewed distribution.

The example the EU is giving to developing countries also matters. Many developing countries have protectionist policies in agriculture and they often intervene excessively in agricultural markets. Some even pay harmful subsidies – for instance to promote exports (thus wasting public money and raising food prices for domestic consumers) or to lower the costs of energy (thus encouraging wasteful energy usage and the overexploitation of water resources through pumping). The EU could facilitate policy reform in these countries if it showed that a system of market-oriented agriculture with targeted, sustainable subsidies works best. As a result, developing countries could increase their production, benefit from enhanced (South-South) trade and invest their public budget more effectively. Leading by example, the EU could thus better contribute to global food security.