91999E2537

WRITTEN QUESTION E-2537/99

by Michiel van Hulten (PSE) to the Commission

(4 January 2000)

Subject: Support to American agriculture sector

In an article headlined America gives farming more support than EU published in the Agrarisch Dagblad (Agricultural Daily, Netherlands) for 14 October 1999, a Commission official is reported as stating that in the 1999-2000 farming year the United States will be paying out more in agricultural subsidies than the European Union. Price support in the United States is said to be running at some 20 billion dollars annually.

Can the Commission indicate what forms of support the United States grants its agricultural sector, and will it provide figures to support the statement attributed to the Commission official?

Answer given by Mr Fischler on behalf of the Commission

(31 January 2000)

The American budget for agriculture at 63 and 69 billion for the years 1999 and 2000 respectively is more than 50 % higher than that for the common agricultural policy (CAP). It should be pointed out, however, that much of the American agriculture budget expenditure is only of indirect benefit to producers. The food, nutrition and consumer services for example which accounted for 35 billion of the 1999 agriculture budget benefit American farmers indirectly in that they promote consumption of certain food products, which are virtually all sourced from American farms.

In calendar year 1999, direct federal government payments to American farmers amounted to 22,5 billion or the equivalent of 11 000 per farm, double the average payment to Community farmers.

The principal mechanism for supporting American farmers is through Agricultural Market Transition Act (AMTA) payments which are direct payments to farmers and are fixed on the basis of historic production and loan deficiency payments which amount to the difference between market prices and a pre-determined amount per bushel, known as the loan rate.

In 1998 and 1999, the American government supplemented these payments already available to farmers by about 15 billion in total through two emergency packages, which was distributed on the basis of the data available through the AMTA system.