The European Union (EU) is offering to cut trade-distorting agricultural subsidies by 70%, with the clear realization that the Doha Development Round under the World Trade Organisation (WTO) is in its ?now or never? stage.

However, while the European Commission (EC) is offering to cut subsidies, it would continue farm support till 2030 with a budgetary allocation of 42 billion euros.

Moreover, some of the bigger EU economies like the UK, France, Spain, Sweden and Ireland would continue giving production-linked support, even though this is being considered trade distorting.

Michael Mann, European commission spokesman for agriculture, told FE that the EU is offering to cut trade-distorting subsidies by 70%, which is its clear gesture of willingness to successfully conclude the Doha round.

?We need America, New Zealand, Australia and Canada to withdraw subsidies supporting market mechanism, otherwise the EU initiative doesn?t really have any impact on Doha,? Mann said.

India and the G-33 group of developing countries have been opposing subsidies supporting agriculture in the developed countries, but the US, EU, Canada and others have been firm about retaining their subsidies.

EC officials feel that with the offer of a 70% cut, there would be a clear Brussels pressure on Washington.

According to Mann, even if Britain, Ireland, Sweden, France and Spain continue to give production-linked subsidies, the 70% cut from the EU as a whole is a clear signal of what a major block wants.

He said the EU?s 42 billion Euro farm support till 2030 is an absolutely ?green box? subsidy, one that is meant for protecting the environment for farmers? future benefit. ?This is not trade distorting by any means,? Mann said. He said that the recent EU-US policy dialogues have given an impression that the US is committed to help the Doha round conclude successfully. But the US farm bill of 2007 has increased production linked and marketing subsidies.The EU is spending very little on market management, and export subsidies would go by 2030. The EU is also offering to withdraw all subsidies on production.

The US farm support is concentrated on five programme crops?corn, rice, wheat, soya and cotton.

While the US is into bulk exports of farm commodities, the EU exports only value-added products. This is posing a big challenge for the developing economies like India and the other G-33 nations confronting subsidies.

When asked whether EU would support India?s demand of allowing designating a certain number of products as special products that can be prevented from tariff reduction, which in turn counters the subsidy, Mann said the proposal has not been officially communicated to the EC.