# CE2004078EN.01011901.xml

| 27.3.2004 | EN | Official Journal of the European Union | CE 78/119 |
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27.3.2004

EN

Official Journal of the European Union

CE 78/119

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(2004/C 78 E/0120)

WRITTEN QUESTION E-2495/03

by Christopher Huhne (ELDR) to the Commission

(25 July 2003)

Subject:   Common agriculture policy

Subject:

Will the Commission estimate, on the basis of a typical basket of food purchases in each Member State for a typical household, the additional cost paid by consumers as a result of farm support prices compared with a situation where all aid was untied to production and world market prices applied? Will the Commission also cite other estimates from other researchers for one or more Member States of a similar calculation?

Answer given by Mr Fischler on behalf of the Commission

(11 September 2003)

(11 September 2003)

The Commission is not aware of any such specific calculation made either by single researchers or international organisations. This is mainly due to the fact that such estimates are too problematic to be considered enough reliable from an economic point of view. The Commission recognises that for a certain number of food products Union consumers pay a higher price than if they would buy them at world market price. However, keeping aside the question of the existence of a perfectly functioning and efficient world market — and then of a world price — it should be mentioned that this price gap is only slightly higher than for the whole Organisation for Economic Cooperation and Development (OECD) countries. It should also not be ignored that support prices for the main agricultural products in the Union have sharply fallen since 1992 (45 % for cereals and 35 % for beef) and that the current Common Agricultural Policy (CAP) reform is continuing in the same direction.

There are many reasons that explain a slightly higher consumer price in the Union for some food products:

| — | Requirements of Union consumers concerning diversity, freshness, quality and food safety are extremely high, |
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Requirements of Union consumers concerning diversity, freshness, quality and food safety are extremely high,

| — | Union food producers face higher wage, social and energy costs than most of their competitors, |
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Union food producers face higher wage, social and energy costs than most of their competitors,

| — | The prices paid by consumers also reflect the slightly higher prices of agricultural products paid to farmers in the Union, which are mainly linked to the specific economic, social, structural and environmental conditions faced by Union farmers. |
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The prices paid by consumers also reflect the slightly higher prices of agricultural products paid to farmers in the Union, which are mainly linked to the specific economic, social, structural and environmental conditions faced by Union farmers.

However, all these considerations are based on the assumption that world prices would not substantially increase following a full liberalisation of agricultural trade, which is totally unrealistic. In addition, it should be stressed that the basic agricultural products only represent some 20 % of the value of the food products purchased by the consumers.

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