Indian exporters, whether of shrimps or shirts, cannot afford to ignore a very important development that is taking place within the 15-nation European Union (EU). Call it consumer power, the fact is that European consumers are forcing their policy-makers, and their farmers and factory owners, to take their views into account when drafting European legislation, or putting food or clothing on supermarket shelves.
Indian exporters may protest that the EU?s sanitary and phytosanitary measures discriminate against Indian shrimps. American exporters of genetically modified (GM) soya or corn can file a complaint with the World Trade Organization (WTO), attacking the EU?s de facto moratorium on GM foods as unscientific and in violation of WTO rules. The fact remains that the EU legislation in force or in the pipeline – on labelling of food packaged for supermarket shelves, for example – is the result of consumer pressure. Farmers lobbies have given way to consumer lobbies, if you like.
Take food safety. The latest EU-wide poll found that 90 per cent of Europeans hold the view that the primary aim of the EU?s common agricultural policy (CAP) is to ensure that agricultural products are healthy and safe. Compare this with the 77 per cent who see the CAP as designed to ensure stable, adequate incomes for farmers. Or the 77 per cent who want the CAP to ensure that European agricultural products are more competitive on world markets. And 88 per cent maintain that European farming practices must be environment-friendly.
This preoccupation with food safety is not surprising, if you have had to contend with meat that could have been contaminated with the ?mad cow? disease or eggs which could give you food poisoning. In recent weeks an outbreak of fowl pest in Belgium has led to the slaughter of hundreds of thousands of hens. When the outbreak began, some Belgian supermarkets assured their customers that only French poultry meat was on sale. European consumer power is making itself felt in areas beyond food production. As the EU?s chief trade negotiator, Pascal Lamy, told your correspondent in an exclusive interview, a battery is no longer a battery. The only acceptable batteries, from the consumer?s standpoint, are those which do not contain metals which pollute the environment when they are thrown away.
All this has implications for exporters, whether Indian or American or Brazilian. Exporters have little choice but to fall in with the wishes of their European customers – but so do European producers. It can be argued that the American decision to challenge the EU?s ban on imports of GM foods in the WTO could backfire, in that it could simply increase consumer resistance to such foods.
Some even maintain that the WTO?s dispute settlement machinery is unsuited to disputes such as the one over GM foods, because they involve not only regulatory standards but also health and environmental concerns.
How are the EU authorities dealing with the problems thrown up by consumer resistance to GM foods? Franz Fischler, the European Commissioner who is responsible for drafting EU farm legislation, accepts that GM crops and food are here to stay. He told a round table on the co-existence of GM and non-GM crops in the EU, which he had organized, that ?co-existence means that no form of agriculture, GM or non-GM, should be excluded in the EU in the future.?
However, only authorized GM crops will be grown in the EU, and the EU has authorized GM varieties in the past. The authorization procedure already covers health and environmental concerns. But there are cost-benefit considerations to be taken into account also, according to the EU?s agricultural commissioner.
In other words, the presence of GM crops could result in an economic loss to conventional or organic farmers: They may have to sell at a lower price because of the presence of genetically modified organisms above the authorized threshold level. It is up to the 15 EU governments to develop and implement measures for co-existence, with help from Mr Fischler?s team in the European Commission. Consumer choice is to be protected through labelling. Draft legislation for a sound EU system to trace and label food and feed products derived from GM crops has already been approved by EU governments. It is now before the European Parliament, and should come into force by the end of July.