Short answer: highly benificial to everybody but a few farmers. The IHT has a series of articles on EU subsidies written by Thomas Fuller. Yesterday's
discussed who received the subsidies, and how farmers in France felt about the question (selfish French farmer alert). Today's
asks the question of what happens if subsidies are curtailed and eventually stopped.
Fuller discusses the obvious results: lower consumer food costs, more money available for research (unless they are politically connected, European scientists have a hard time gaining access to funding; consequently many end up in the US), and better opportunities for third world farmers who won't face subsidized competition.
He also notes this unexpected consequence: a fall in the Euro due to fewer exports would make European manufactured goods easier to sell abroad.
[...] Experts in European agriculture say dismantling the system in Europe would have far-reaching consequences, both good and bad. The European countryside might indeed become less attractive, with scrub and forest taking over failed farms.
But Europe would become more competitive and the money that is today spent on subsidies could be channeled into such things as scientific research, where Europe has long lagged behind the United States.
Perhaps as many as a third of Europe's farmers would go out of business, economists say. Europe would also import more products that it cannot produce efficiently, such as sugar.
European agriculture is protected in some ways by European tastes - the opposition, for instance, to genetically modified foods.
Shoppers would probably benefit from cheaper food because subsidies distort the price of crops. This would put money in consumers' pockets for other uses. The OECD calculates that agricultural products in the European Union are 29 percent more expensive than they would be without the aid.
But there could also be more unexpected consequences, said Stefan Tangermann, the head of the agriculture division at the OECD.
Nonfarming industries would also benefit simply because they would no longer be paying the subsidies to farmers through taxes.
There is also the possibility, favored by northern countries, that Europe "re-nationalize" agriculture: that farmers continue to be paid subsidies but on a national level instead of through the EU.
Agriculture today is the only area of the EU where there is a truly pan-European policy. But renationalizing would likely be fought by the largest recipients of the program: France, Germany, Italy and Spain.
And what about the countryside?
For one, the price of agricultural land would decline without subsidies, according to Swinnen.
As for the fabled texture of the countryside, the small country roads and neat fields, this, too, could change, according to Vicki Swales, head of agriculture and rural development at the Institute for European Environmental Policy in London.
There is some truth in the farmers' warnings, she said. "Without agriculture there would be some natural succession toward scrub and woodlands," she said.
Especially in France it is difficult to overstate the attachment to farms and the countryside in general. "It is not only wheat that emerges from the plowed earth, it is an entire civilization," said the 19th-century poet Alphonse de Lamartine. Today the French regularly refer to the "terroir" - the regions where different food is made or wine produced.
Ultimately, experts in European farming say that with or without subsidies, the number of farmers in Europe has been steadily declining by 2 to 3 percent a year. "In percentage terms it's a straight line downward," Swinnen said.
But those who must chart the future of the EU's farm program, say Europe must think about more than just being competitive. [...]
What I came away with is that this isn't simply about Europeans becoming more competitive by either shrinking their budgets, or putting the money into R & D, as important as that is for the EU's future. Europe, especially France, places enormous cultural store in its farms and dairys. And as subsidies are cut back, some of the countryside's charms must necessarily be lost.
In the near future it will be a moot point as any reductions will be minor. Should Europe's economies shift from bad to worse, though, it will be interesting to see how quickly Europe's favorite charity--farmers, become scapegoats and are viewed as selfish.