Tobacco and the European common agricultural policy

The common agricultural policy of the European Community subsidizes tobacco production to the tune of 1,300 million ecu a year (US$ 1,500 million, UK pounds 900 million). This amounts to 2,500 ecu ($3,100, pounds 1,700) per minute, and is more in one year than the total amount spent on tobacco subsidies by the US in the last 50 years. The purpose of this policy was to maintain farmers' incomes and adapt community production to demand. Demand for the dark tobaccos which dominate EC production has fallen, while demand for light flue cured tobacco like Virginia has risen. A complex system of production subsidies and quotas was intended to discourage production of the dark tobaccos, for which there is virtually no market, and lead to more Virginia production. The policy has failed. Expenditure has spiralled out of control, production of unmarketable tobacco varieties has risen enormously, and the EC is the world's largest importer of raw tobacco. As a result tobacco is being bought by the community for intervention storage and surpluses of the dark high tar varieties are being 'exported' to eastern Europe and north Africa at giveaway prices. There has been no effective monitoring or control of this policy. This paper explains how this has happened and argues that, in view of the health risks attached to tobacco, these subsidies should be abolished.