Wednesday, May 28, 2008

CAP will get its promised talks on reforms

Proposals for market-oriented farm reforms

Based on a leaked document from the European institutions, New Europe reported last week prior to the Agricultural Council meeting that there will be no concrete results about the CAP (Common Agricultural Policy) of the EU in the near future.

Wedged between beneficiaries and opponents of the CAP, European Agricultural Commissioner Mariann Fischer Boel took the golden path of “proposals” for discussions which aim to appease “for the CAP” member states while not completely blocking the demands of “against the CAP” nations.

European Union member states should allow their farmers to respond to market conditions and stop paying them to produce unwanted goods, the commissioner recommended last week.
“This is not the time to scrap the CAP, as some have proposed,” Boel said in a comment aimed at Britain’s Finance Minister Alistair Darling, who made that call in mid-May.

The so-called “CAP health check” is “all about freeing our farmers to meet growing demand and respond quickly to what the market is telling them,” Fischer Boel said. “It also aims to simplify, streamline and modernise the CAP and give our farmers the tools to handle the new challenges they face, such as climate change,” she said.

Check only for 2003

Launched as a follow-up to a major reform of the CAP in 2003, the “health check” focuses on streamlining existing policies, rather than bringing in new ones. For example, it recommends finally getting rid of the rule that farmers must leave 10 percent of their arable land untouched - a rule brought in during the 1980s to avoid the problem of over- production, and suspended in 2007. “We simply couldn’t defend a situation in which 10 percent of our arable land is out of production when there is a cry for food from all over the world,” Fischer Boel said. However, the Commission also hopes to preserve the environmental benefits of “set-aside” by linking farm payments to enforcement of environmental standards, she said.

Since the EU has also decided to scrap all milk quotas in 2015, it proposes raising the quotas every year until 2014 in an effort to provide a “soft landing” for milk farmers. It further proposes stopping practically all payments to farmers which are made in return for producing a specific foodstuff - a practice which was largely abolished in 2003.

And it proposes shifting an ever-increasing amount of money from farm support into rural development projects aimed at strengthening environmental and business projects in rural areas.

In order to sweeten the pill for both farmers and member states with large rural populations, it also proposes allowing member states more freedom in how they give aid to the most vulnerable farming sectors, and giving new members an extra three years - until 2013 - to use a simplified system for claiming EU funds.

The CAP has long been the EU’s most costly and controversial policy. In its heyday in the 1980s it took up some 60 percent of the EU’s budget, and even after the 2003 reforms it takes up more than a third, or some 43 billion Euro per year.

However, the proposals, which have to be approved by EU member states, are likely to face a heated debate. Older EU member states such as France and Germany are opposed to reforms which they see as leaving their farmers vulnerable to market forces, while new states such as Latvia say that the CAP should be reformed to transfer money from richer members to poorer ones.

Fischer Boel has agreed in principle with France, which is to chair EU meetings in the second half of the year, that member states should reach agreement on the proposals by November, she said.

Price rise measures

Earlier, meeting on soaring food prices across the continent, the bloc’s agriculture ministers reached no consensus on the key question of how to do it, with member states still far apart on how the EU’s Common Agricultural Policy (CAP) should be adapted to current events.

“We should adopt measures which could stabilize the market... If you had some stocks and if you have in mind that with stocks you could intervene in the market, perhaps the situation would be better,” said Slovenian Agriculture Minister Iztok Jarc, who chaired the meeting.

Other countries farmers

The European Union should consider paying money left over from its massive farming- support budget to small farmers in developing countries rather than returning it to member states, Fischer Boel said. “We will probably, within the agricultural section, not spend our total budget for 2008 ... so we will have funding available,” she explained.

“Some micro-loans to small producers in developing countries to help them to buy seeds and fertiliser could be not only a short-term, but also a long-term solution that could improve their capability to feed themselves and to start trading,” she said.

Such a measure would be a “very efficient way to help improve capacity in the agricultural sector in the developing countries,” she said. It could become possible because soaring food prices mean that EU farmers need less support from EU coffers than usual. However, she acknowledged that any such proposal would have to be approved by EU member states, since normally any money left over from the bloc’s massive farming budget - 43 billion Euro in 2009 - is paid back to member states.

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