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Briefing: tobacco subsidies and the European Union

Tobacco use kills approximately 500,000 people in the EU each year and about one million in the whole of Europe.

The EU has a number of tobacco control policies including: educational campaigns, a resolution banning smoking in public places (resolutions are 'recommendations' and are not binding), legislation limiting machine based tar, nicotine and carbon monoxide yields, and a draft directive to ban cross-border advertising. A 1998 directive banning all tobacco advertising was overturned by the European Court of Justice on the grounds that it was not within the EU's legal competence. In fact several member states have advertising bans, including the UK.

The EU also subsidies tobacco growing heavily through the Common Agricultural Policy (CAP), a policy which has been heavily and repeatedly criticised as expensive, ineffective, unsustainable, unethical, and in conflict with health policy.

The original purposes of the CAP in general and the tobacco subsidies in particular were to maintain farmers' incomes, and reduce imports by orienting production to commercially valued varieties of tobacco. The policy has failed spectacularly (1).

The cost of tobacco subsidies

In its earlier years tobacco subsidies were riddled with fraud. There have been reforms since then but the EU still spends about 1,000 million euros a year (about £700 million) subsidising tobacco growing, compared with only about 11 million euros per year that it was spending on the "Europe Against Cancer" programme, until it ended in 2000.

Criticism of the policy

This massive expenditure is almost entirely wasted. Firstly, because it has failed to produce commercially valued or wanted tobacco. The vast majority of the EU's tobacco is of dark varieties for which there is no market. Yet this support to farmers constitutes 98% of their tobacco income - the highest proportion for any product in the CAP.

The policy is not even economically efficient in maintaining jobs. Because the tobacco has no market, it has been estimated that the EU could actually save money by paying the tobacco farmers to do nothing (2).

Cancer Research UK believes that such huge expenditure on a product that kills half a million EU citizens each year is immoral and especially unacceptable when compared with the tiny sums spent on tobacco control measures at European level. Cancer Research UK fully supports the EU proposals for reform of the tobacco sector.

In June 2003 EU farm ministers agreed to reform the CAP by introducing a simpler system of support that will no longer be linked to the volume of production. The European Commission has proposed that subsidies for growing tobacco be phased out completely and replaced with support for economic development and transition to alternative economic activities. Although such complete reform is highly desirable detailed plans are still awaited. Cancer Research UK urges the European Commission to bring forward plans to abolish all tobacco subsidies as soon as possible.

EU enlargement

In any case, enlargement of the EU from 15 to 25 states, and possibly more later, will potentially double the CAP budget. There are 13 countries currently hoping to be admitted to membership: Bulgaria, Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Romania, Slovakia, Slovenia, Turkey. Expenditure could rise from almost 1,000 million euros to almost 2,000 million euros. Such massively increased spending on tobacco subsidies would be politically and economically unacceptable to many member states (3).

Cancer Research UK supports the Commission's proposals, especially to develop strategies for funding rural economic development and alternatives to tobacco growing, for example, maintenance of wildlife habitats or growing crops used for medicine production. Furthermore the WHO Framework Convention on Tobacco Control calls for diversification away from tobacco farming towards alternative crops or livelihoods. The EU supports the Convention and so should prioritise such diversification.

Thus we support others whose key recommendation is that that tobacco subsidies should be phased out entirely (4), and that until this is achieved, money should be provided to help farmers leave the industry; overall expenditure should be reduced by decreasing the levels of the premiums, more money should be spent on research into conversion to other crops, and much more money should be spent on effective public health programmes.

References

1) Joossens L, Raw M. Tobacco and the european common agricultural policy. British Journal of Addiction 1991;86:1191-1202.

2) Joossens L, Raw M. Are tobacco subsidies a misuse of public funds? BMJ 1996;312:832-835.

3) Commission of the European Communities. Working paper: tobacco regime, extended impact assessment. COM (2003) 554 final. Brussels, 23 September 2003.

4) Action on Smoking and Health, Phasing out European Union tobacco subsidies, London, July 2001, www.ash.org.uk.

Further reading

Joossens L, Raw M. Common market organisation for tobacco. Chapter 5.4 pages 75-84 in Public health aspects of the EU Common Agricultural Policy, Schafer Elinder, L (Ed.). Stockholm, Folhalsoinstitutet, 2003. http://www.fhi.se/shop/material_pdf/eu_inlaga.pdf