EC Farm Ministers in Reform Dilemma : Trade: Subsidized food surpluses are a bane to rest of the world’s farmers. Changes could await the outcome of GATT trade talks.

European Community farm ministers start a two-day meeting today caught between pressing on with reforms to their creaking agriculture system or waiting to see how stumbling world trade talks change the picture.

“The meshing together of GATT and reform continues to be a troublesome element,” one diplomat said ahead of the meeting.

The EC’s Common Agricultural Policy, notorious for encouraging farmers to produce mountains of subsidized food, is the bane of the rest of the world’s farmers.

They resent the EC dumping the surplus on world markets.

That is the nub of the dispute that has dogged five years of talks under the General Agreement on Tariffs and Trade, which stalled in Brussels in December 1990 due to a disagreement between the EC and the United States over the size and speed of cuts in farm subsidies.

The European Commission has given notice that the current system, under which over 10 million EC farmers are paid to grow more irrespective of whether it can be sold, cannot continue.

The dilemma for farm ministers is that European Farm Commissioner Ray MacSharry wants deep cuts in internal prices, while GATT Director-General Arthur Dunkel’s proposed compromise for resolving the longest-running dispute in the Uruguay Round of trade negotiations concentrates more on export subsidies.

Diplomats say ministers are unlikely to accept MacSharry’s plan now if there is any chance of GATT letting them off the hook.

Dunkel, due in Brussels Wednesday to take soundings on his plan, has set an April deadline for ending the GATT talks.

“We can afford to see what the next weeks produce in terms of final figures,” one diplomat said.