Aigner: Export refunds are outmoded

Source: © diego cervo - Fotolia.com

Export refunds aim to strengthen the competitiveness of domestic producers on the world market by partially compensating them for the difference between the higher domestic price and the lower world market price. The BMELV believes that export subsidies as an instrument are outmoded. The funds earmarked in the EU budget for this purpose should be saved.

Setting a good example

"Export subsidies are outmoded. Federal Minister Ilse Aigner announced: “I will throw my weight behind ensuring in the EU that the so-called export subsidies for agricultural products are phased out as soon as possible". "My wish is that other nations exporting agricultural products, such as the U.S.A., will follow our example and phase out their export subsidies for farm products."

EU export refunds have declined dramatically

Due to the Common Agricultural Policy becoming more market-orientated, budget spending for export refunds in the European Union has plummeted, from a total of 10.2 billion euros in 1993 to only about 164 million euros in 2011.

In 2011, the European Union’s export refunds only amounted to approximately 1.6 percent of what they were in 1993. Please click on the chart for more detailed information, Source: BMELV

Disregarding export refunds, the BMELV provided support for companies, especially small and medium-sized companies, of up to 5 million euros to underpin their efforts to tap into foreign markets with strong purchasing power (BMELV export promotion). By way of comparison: The Institute for Market Analysis of the Heinrich von Thuenen Institute estimates the value of American export subsidies to range between 250 and 300 million U.S. dollars.