EC Panelists OK Radical Farm Reforms

The European Community’s executive body Tuesday approved a radical farm reform plan that could restart world trade talks stalled since last December.

The proposal would revamp the EC’s agriculture program by slashing production and cutting subsidies to farmers.

“These proposals . . . represent the most fundamental reshaping of the (common agricultural policy) since its inception 30 years ago,” the European Commission said in a statement.

The plan must be approved by the 12 nations in the trading bloc.

Lack of agreement on a farm proposal helped bring an end to the world trade talks last year. The United States and some other farm exporters wanted the EC to cut farm supports and eliminate export credits so that U.S. farmers could better compete with their European counterparts.

But the EC proposed less substantial cuts than the United States was looking for, and the four-year, 108-nation effort to lower world trade barriers collapsed.

The plan announced Tuesday is an attempt to sever the automatic link between production and guaranteed prices, which has encouraged farmers to grow more to earn more. This has resulted in millions of tons of surplus crops and soaring budget costs.

The commission said there was “a wide measure of agreement that the status quo cannot continue.”

The plan would slash cereals prices by 35%, milk prices by 10% and beef prices by 15%. Farmers would be compensated for the big price cuts, with direct assistance geared more toward small- and medium-size farmers.

Farmers ages 55 and older would be eligible for a new early retirement program.

The commission estimated that the proposal would cost about $4.2 billion in its first year and less in subsequent years. It would take effect in 1993 and be fully in place by 1996.

The world trade negotiations are expected to come up at next week’s economic summit in London of President Bush and the leaders of six other industrialized nations.

Last month, trade ministers of two dozen nations called for the negotiations to end by December.