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.
Showing posts with label CAP. Show all posts
Showing posts with label CAP. Show all posts
Wednesday, May 28, 2008
Leaked documents suggest CAP reform just a whitewash
Big farms get taken care of, dairy farmers unhappy
European Union agriculture ministers meeting this week in Brussels are set to rubber stamp a middle path of not antagonising major beneficiaries like Germany and France while keeping the hopes of free market advocates like United Kingdom alive with cosmetic reform proposals to the EU’s Common Agricultural Policy (CAP).
The alarm for urgent need for CAP modification was sounded earlier last week when Joaquin Almunia, European Commissioner for Economic and Monetary Affairs said prior to a meeting of Eurozone finance ministers: “For the weakest sector of our society, inflation is the main problem. They are suffering a loss of purchasing power, and must pay more for food and other necessary goods.”
Among the measures that governments can take to help their poorest citizens is an improvement to “the functioning of our common agricultural policy (CAP),” he told journalists, adding that the EU should also promote measures aimed at tackling “tension” on the international commodity markets.
The CAP, one of the most hotly-debated policies in the EU, is going to pay out nearly 43 billion Euro in 2009, which amounts to more than one-third of all payments going out of EU coffers. Although there was a CAP reform in 2003 to slash subsidies, but with food prices in the 15-member Eurozone now rising at an annual rate of six percent, market analysts predict dire straits ahead.
According to leaked documents ready for presentation at the “Health Check” of CAP on May 20, “First indications from the assessment of the 2003 reform are in general positive, and indicate that a fundamental reform of the CAP for the remaining horizon of the present financial perspectives (until 2013) is neither necessary nor desirable.”
Another two major areas of concern directly affecting farmers are “set-aside obligation” and “milk quotas.”
The document states: “Removal of the set-aside obligation would likely bring back into production an area corresponding to roughly half the area currently under mandatory set-aside. It has been suggested that the environmental benefits of set aside could be retained by introducing a fixed percentage of total area as an “environmental compensation/priority” area, containing certain landscape features.
According to a reliable source who wanted to remain anonymous, there is allegedly a compromise on the ceiling of individual farmers earning more than 300,000 Euro where the beneficiary stands to lose 70 percent of the subsidies while those earning lower amounts will lose far less.
The earlier proposal was to drastically cut the subsidies to big farms but the pressure from lobby groups seems to have paid off, the source pointed out.
On the subject of milk quotas, the document is more critical saying, “Milk quotas hold back the sector from achieving the objectives of CAP reform since they still reflect concerns of two decades back, instead of responding to present opportunities.” “In terms of agricultural markets, the phasing out of milk quotas and removal of set-aside will allow the farmers to better respond to market situations.”
The milk farmers claim that they will lose up to 300 million Euro from these cuts and they want the system to continue, but there is also friction between old 15 and new 10 farmer lobbies and that is affecting the proposals.
Moreover, on the subject of disposal of pesticides to farmers, the European farmers are facing tough challenges as the number of active substances is going down with the new REACH regulations coming in whereby companies are reluctant to do the necessary tests for all pesticides as its cost and time consuming.
The agriculture insiders predicted that even with compromises already agreed, the ministers are set to have a bitter political battle as each side tries to prove that the food crisis makes its preferred policy the only safe one to adopt.
The two divergent view point were crystal clear as the British Finance Minister Alistair Darling wrote to EU counterparts saying it is “unacceptable that, at a time of significant food price inflation, the EU continues to apply very high import tariffs to many agricultural commodities,” while Germany’s Agriculture Minister, Horst Seehofer, argued that “we have to make sure that we can provide this continent with food sustainability. This cannot be done by taking away subsidies from European farmers.”
The CAP, a complex and expensive system of subsidies designed to protect European farmers’ interests, has often been blamed for keeping European food prices artificially high.
With world markets booming, it is time for Europe to remove quota system and go for liberalisation of the European markets which in turn will help bring down the prices but the documents said, “The continuation of present CAP policies shows that the current policy framework, as reformed in 2003, contributes positively to fulfilling the principal CAP objectives.”
European Union agriculture ministers meeting this week in Brussels are set to rubber stamp a middle path of not antagonising major beneficiaries like Germany and France while keeping the hopes of free market advocates like United Kingdom alive with cosmetic reform proposals to the EU’s Common Agricultural Policy (CAP).
The alarm for urgent need for CAP modification was sounded earlier last week when Joaquin Almunia, European Commissioner for Economic and Monetary Affairs said prior to a meeting of Eurozone finance ministers: “For the weakest sector of our society, inflation is the main problem. They are suffering a loss of purchasing power, and must pay more for food and other necessary goods.”
Among the measures that governments can take to help their poorest citizens is an improvement to “the functioning of our common agricultural policy (CAP),” he told journalists, adding that the EU should also promote measures aimed at tackling “tension” on the international commodity markets.
The CAP, one of the most hotly-debated policies in the EU, is going to pay out nearly 43 billion Euro in 2009, which amounts to more than one-third of all payments going out of EU coffers. Although there was a CAP reform in 2003 to slash subsidies, but with food prices in the 15-member Eurozone now rising at an annual rate of six percent, market analysts predict dire straits ahead.
According to leaked documents ready for presentation at the “Health Check” of CAP on May 20, “First indications from the assessment of the 2003 reform are in general positive, and indicate that a fundamental reform of the CAP for the remaining horizon of the present financial perspectives (until 2013) is neither necessary nor desirable.”
Another two major areas of concern directly affecting farmers are “set-aside obligation” and “milk quotas.”
The document states: “Removal of the set-aside obligation would likely bring back into production an area corresponding to roughly half the area currently under mandatory set-aside. It has been suggested that the environmental benefits of set aside could be retained by introducing a fixed percentage of total area as an “environmental compensation/priority” area, containing certain landscape features.
According to a reliable source who wanted to remain anonymous, there is allegedly a compromise on the ceiling of individual farmers earning more than 300,000 Euro where the beneficiary stands to lose 70 percent of the subsidies while those earning lower amounts will lose far less.
The earlier proposal was to drastically cut the subsidies to big farms but the pressure from lobby groups seems to have paid off, the source pointed out.
On the subject of milk quotas, the document is more critical saying, “Milk quotas hold back the sector from achieving the objectives of CAP reform since they still reflect concerns of two decades back, instead of responding to present opportunities.” “In terms of agricultural markets, the phasing out of milk quotas and removal of set-aside will allow the farmers to better respond to market situations.”
The milk farmers claim that they will lose up to 300 million Euro from these cuts and they want the system to continue, but there is also friction between old 15 and new 10 farmer lobbies and that is affecting the proposals.
Moreover, on the subject of disposal of pesticides to farmers, the European farmers are facing tough challenges as the number of active substances is going down with the new REACH regulations coming in whereby companies are reluctant to do the necessary tests for all pesticides as its cost and time consuming.
The agriculture insiders predicted that even with compromises already agreed, the ministers are set to have a bitter political battle as each side tries to prove that the food crisis makes its preferred policy the only safe one to adopt.
The two divergent view point were crystal clear as the British Finance Minister Alistair Darling wrote to EU counterparts saying it is “unacceptable that, at a time of significant food price inflation, the EU continues to apply very high import tariffs to many agricultural commodities,” while Germany’s Agriculture Minister, Horst Seehofer, argued that “we have to make sure that we can provide this continent with food sustainability. This cannot be done by taking away subsidies from European farmers.”
The CAP, a complex and expensive system of subsidies designed to protect European farmers’ interests, has often been blamed for keeping European food prices artificially high.
With world markets booming, it is time for Europe to remove quota system and go for liberalisation of the European markets which in turn will help bring down the prices but the documents said, “The continuation of present CAP policies shows that the current policy framework, as reformed in 2003, contributes positively to fulfilling the principal CAP objectives.”
Tuesday, November 13, 2007
EU expresses `surprise` as US joins `Banana War`
Have patience, do not react and this too shall pass! The mantra advocated by many in the labyrinths of power in Brussels seems to have slipped badly as eleven years down the road the "Banana Wars" of late 90s are back knocking on the doors of the European Commission. The US, latest to join the fray at World Trade Organisation said in a statement, "The US request relates to the EU's apparent failure to implement the WTO rulings in a 1996 proceeding initiated by Ecuador, Guatemala, Honduras, Mexico and America."
Launching the formal step saying, "We are hopeful that this formal step will facilitate the removal of that discrimination," the US Trade Representative Susan C Schwab added, "We regret that efforts between the EU and its Latin American trading partners to negotiate a solution to the banana issue have not been successful. We share the concern of Ecuador and several other Latin American banana exporters regarding the continued existence of a discriminatory tariff rate quota in the EU's current banana regime."
The US statement pointed out that WTO ruling had said "the EU's regime discriminates against bananas originating in Latin American countries and against distributors of such bananas, including several US companies," adding "The EU was under an obligation to bring its banana regime into compliance with its WTO obligations by January 1999."
After the 1996 WTO ruling, the EU had committed to bring its tariff-quota regime for banana in compliance with the ruling no later than January 1, 2006, said the US statement, lamenting the fact that "the EU banana regime put in place on January 1, 2006 features a zero-duty tariff quota that is allocated exclusively to bananas from African, Caribbean and Pacific (ACP) countries. Bananas of Latin American origin do not have access to this duty-free tariff rate quota and are subject, instead, to a 176 Euro/ton duty."
The European Commissioner for Agriculture and Rural Development Mariann Fischer Boel introduced a personal element of surprise to a more than decade old dispute last week.
Answering a question from New Europe about the new WTO banana dispute with US joining others, the Commissioner wondered why at the first place the US is interested in banana sector as it is not a banana producer but then she answered her own doubts with the mention of Chiquita as the possible cause for US to intervene. The Commissioner however added that the EU will look into the matter and take appropriate steps.
Chiquita, based in Cincinnati in the US could not be contacted for their immediate reaction but European banana sector sources told New Europe that other US exporters including Del Monte and Dole are also affected adding that the European Commissioner has her facts correct that no bananas are grown in the US but in the trade circle of today's era of globalisation everyone is aware of the large farming interests of these leading world exporters globally especially in the Latin American region.
Coming back to the US request to WTO panel to review whether the EU banana import regime breaches the obligations of the international trade body, the EU this week in Geneva as a defending party may veto under WTO rules the request but the WTO will comply with the US request a month later unless the complaint is withdrawn.
The US is following the footsteps of Colombia and Panama which this year decided to follow the beaten track of Ecuador.
December 15, 2006 saw the first day of the proceedings at Geneva of revival of the "1990s banana wars" with the then-winner Ecuador coming back to haunt the European Union. Ecuador, the world's largest banana exporter, complained to the WTO against the EU's single tariff of 176 Euro that came into force on January 1, 2006, terming it "high."
Commenting on the decisions, Michael Mann, European commission spokesman for agriculture had said, "This is very regrettable. We had a consultation process going which we felt was making good progress."Over the past years negotiating for a single tariff system to modify its complex web of duties and quotas for imports, the European Commission, the executive arm of the EU, had suggested EU duties of 230 Euro and then scaling them down to 187 Euro, but WTO panels had rejected the proposals arguing that those were discriminatory against Latin American (Latam) nations. Out of that deadlock emerged the figure of 176 Euro, but the conflict simmered on.
Eurostat data of the first quarter 2007 compared to the same period 2005 made it clear how Latam share compared to ACP banana growing countries is slipping down the banana ladder. The imports of the latter are climbing double as fast as their counterparts in Latin America.The EU's current banana import policy significantly differentiates access treatment as a tariff-quota volume of 775,000 tonnes is exclusively reserved for bananas of ACP origin. ACP bananas within the quota enter duty-free ( i.e., at a 176 Euro/tonne margin of preference), with unlimited ACP over-quota access authorised at a tariff of 176 Euro/tonne.
On the other hand, an "autonomous" tariff of 176 Euro/tonne (a rate more than double the previously-applicable rate of 75 Euro/tonne) applies to all other bananas.Prior to the General Affairs and External Relations Council (GAERC) May 15, 2007, Spain threatened to veto the EU-ACP commitments unless its domestic producers were better protected from an expected rise in banana imports. The fallout was immediately visible when the GAERC endorsed the commission proposal to fully open European to imports from the ACP, with phased-in access for rice and sugar but the banana sector was shelved.
Debating in early December last year in the European Parliament on the need for an assistance to EU farmers, Jean-Claude Fruteau, Member of European Parliament argued, "The assistance provided for banana producers in the EU is necessary in order to compensate for the dysfunctions within the world trade system, in particular the current gap between the social and environmental standards of European countries and those of Central and Latin American countries. To be effective, these internal regulatory measures need to be in line with external regulatory tools by increasing budget allocations as and when any decrease in the customs tariff occurs."
The MEP was pointing to the fact that money coming in through import tariffs goes in to fill the coffers of EU's Common Agriculture Policy (CAP) from where the money goes to EU farmers.Boel had said that the current system of handouts to banana farmers was hard to justify in world trade talks and that it needed to be brought in line with EU agricultural reforms in other sectors.
While bananas grown within the European bloc account for only 16 percent of the total EU supply, production is important to the Spain's Canary Islands, the French overseas departments of Martinique and Guadeloupe and Portugal's Madeira and Azores islands.Europeans eat some 4.6 million tonnes of bananas every year, making the bloc the world's biggest banana market.
Over two-thirds of the fruits consumed come from Latin America and a further 17 percent from Africa and Caribbean countries.To meet all these requests the only way out is to grant duty free quotas to all regions or countries but that seems difficult with the arrival of French President Nicolas Sarkozy for whom the big chunk of winning votes came from French farmers and traders. It may have been a coincidence that Sarkozy went for his post-victory yacht trip with Vincent Bolore whose companies are loading bananas for Europe in Ivory Coast, Ghana and Cameroun.
Written on July 9, 2007 for New Europe, the European Weekly - Issue : 737
Launching the formal step saying, "We are hopeful that this formal step will facilitate the removal of that discrimination," the US Trade Representative Susan C Schwab added, "We regret that efforts between the EU and its Latin American trading partners to negotiate a solution to the banana issue have not been successful. We share the concern of Ecuador and several other Latin American banana exporters regarding the continued existence of a discriminatory tariff rate quota in the EU's current banana regime."
The US statement pointed out that WTO ruling had said "the EU's regime discriminates against bananas originating in Latin American countries and against distributors of such bananas, including several US companies," adding "The EU was under an obligation to bring its banana regime into compliance with its WTO obligations by January 1999."
After the 1996 WTO ruling, the EU had committed to bring its tariff-quota regime for banana in compliance with the ruling no later than January 1, 2006, said the US statement, lamenting the fact that "the EU banana regime put in place on January 1, 2006 features a zero-duty tariff quota that is allocated exclusively to bananas from African, Caribbean and Pacific (ACP) countries. Bananas of Latin American origin do not have access to this duty-free tariff rate quota and are subject, instead, to a 176 Euro/ton duty."
The European Commissioner for Agriculture and Rural Development Mariann Fischer Boel introduced a personal element of surprise to a more than decade old dispute last week.
Answering a question from New Europe about the new WTO banana dispute with US joining others, the Commissioner wondered why at the first place the US is interested in banana sector as it is not a banana producer but then she answered her own doubts with the mention of Chiquita as the possible cause for US to intervene. The Commissioner however added that the EU will look into the matter and take appropriate steps.
Chiquita, based in Cincinnati in the US could not be contacted for their immediate reaction but European banana sector sources told New Europe that other US exporters including Del Monte and Dole are also affected adding that the European Commissioner has her facts correct that no bananas are grown in the US but in the trade circle of today's era of globalisation everyone is aware of the large farming interests of these leading world exporters globally especially in the Latin American region.
Coming back to the US request to WTO panel to review whether the EU banana import regime breaches the obligations of the international trade body, the EU this week in Geneva as a defending party may veto under WTO rules the request but the WTO will comply with the US request a month later unless the complaint is withdrawn.
The US is following the footsteps of Colombia and Panama which this year decided to follow the beaten track of Ecuador.
December 15, 2006 saw the first day of the proceedings at Geneva of revival of the "1990s banana wars" with the then-winner Ecuador coming back to haunt the European Union. Ecuador, the world's largest banana exporter, complained to the WTO against the EU's single tariff of 176 Euro that came into force on January 1, 2006, terming it "high."
Commenting on the decisions, Michael Mann, European commission spokesman for agriculture had said, "This is very regrettable. We had a consultation process going which we felt was making good progress."Over the past years negotiating for a single tariff system to modify its complex web of duties and quotas for imports, the European Commission, the executive arm of the EU, had suggested EU duties of 230 Euro and then scaling them down to 187 Euro, but WTO panels had rejected the proposals arguing that those were discriminatory against Latin American (Latam) nations. Out of that deadlock emerged the figure of 176 Euro, but the conflict simmered on.
Eurostat data of the first quarter 2007 compared to the same period 2005 made it clear how Latam share compared to ACP banana growing countries is slipping down the banana ladder. The imports of the latter are climbing double as fast as their counterparts in Latin America.The EU's current banana import policy significantly differentiates access treatment as a tariff-quota volume of 775,000 tonnes is exclusively reserved for bananas of ACP origin. ACP bananas within the quota enter duty-free ( i.e., at a 176 Euro/tonne margin of preference), with unlimited ACP over-quota access authorised at a tariff of 176 Euro/tonne.
On the other hand, an "autonomous" tariff of 176 Euro/tonne (a rate more than double the previously-applicable rate of 75 Euro/tonne) applies to all other bananas.Prior to the General Affairs and External Relations Council (GAERC) May 15, 2007, Spain threatened to veto the EU-ACP commitments unless its domestic producers were better protected from an expected rise in banana imports. The fallout was immediately visible when the GAERC endorsed the commission proposal to fully open European to imports from the ACP, with phased-in access for rice and sugar but the banana sector was shelved.
Debating in early December last year in the European Parliament on the need for an assistance to EU farmers, Jean-Claude Fruteau, Member of European Parliament argued, "The assistance provided for banana producers in the EU is necessary in order to compensate for the dysfunctions within the world trade system, in particular the current gap between the social and environmental standards of European countries and those of Central and Latin American countries. To be effective, these internal regulatory measures need to be in line with external regulatory tools by increasing budget allocations as and when any decrease in the customs tariff occurs."
The MEP was pointing to the fact that money coming in through import tariffs goes in to fill the coffers of EU's Common Agriculture Policy (CAP) from where the money goes to EU farmers.Boel had said that the current system of handouts to banana farmers was hard to justify in world trade talks and that it needed to be brought in line with EU agricultural reforms in other sectors.
While bananas grown within the European bloc account for only 16 percent of the total EU supply, production is important to the Spain's Canary Islands, the French overseas departments of Martinique and Guadeloupe and Portugal's Madeira and Azores islands.Europeans eat some 4.6 million tonnes of bananas every year, making the bloc the world's biggest banana market.
Over two-thirds of the fruits consumed come from Latin America and a further 17 percent from Africa and Caribbean countries.To meet all these requests the only way out is to grant duty free quotas to all regions or countries but that seems difficult with the arrival of French President Nicolas Sarkozy for whom the big chunk of winning votes came from French farmers and traders. It may have been a coincidence that Sarkozy went for his post-victory yacht trip with Vincent Bolore whose companies are loading bananas for Europe in Ivory Coast, Ghana and Cameroun.
Written on July 9, 2007 for New Europe, the European Weekly - Issue : 737
Monday, October 15, 2007
Another dilemma: EU money for high-tech or food innovation
Another dilemma: EU money for high-tech or food innovation
Galileo, the satellite navigation system and the European Institute of Technology EIT, two of the dream projects of European leaders got the financial backing of the European commission, the executive arm of the European Union.
The Commission last week decided to overlook the welfare of the European citizens with proposals to finance the extra 2.4 billion Euro for Galileo and yet another 309 million Euro for the European Institute of Technology (EIT) through a smart revision of the Financial Framework 2007-2013. The proposal will enable the commission to transfer 2.189 billion Euro from the agriculture budget within the margin available in 2007 and 2008 under heading “Preservation and Management of Natural Resources.”
According to common knowledge, the “Preservation & management of natural resources” programme is intended to assist European farmers in the EU citizens’ demand for safe, quality food, produced without unnecessary waste, and a healthy environment. In 2003-4 the reforms of the Common Agricultural Policy (CAP) were ending to a large extent the unhealthy link between subsidies and production. Farmers are since then free to produce what consumers want in a truly competitive market, while ensuring higher standards of environmental protection, food quality and animal welfare.
Moreover, the commission had announced proposals to increase spending on Rural Development to boost growth and create jobs in rural areas - in line with the Lisbon Strategy. Thus the money was set for use not only for innovation and diversification but also for more agricultural activities.
In its quest to quench the thirst of scientific programmes, the Commission announced that these funds which were meant for the benefit of the European citizens won’t be needed, thus leaving a staggering margin of two billion Euro under the ceiling in 2008. To a layperson, this can not be explained as price tags on food shelves are renewed upward everyday and coming after a long period of relative price stability in the food sector. This is more than obvious to every person. Prices of milk and dairy products, vegetables oils have climbed up and the latest flour and bread price hikes have made headlines in all media outlets with Italians deciding to go without pasta one day recently.
The wave of demand that is sweeping across the Continents is also helped by panic buying on the Asian and South American areas as food shortage looms. Although harvest failures, crop mismanagement and other causes can not be ruled out, there is a clear cut case of high subsidies in the European Union for valuable fields being set-a-side and as high subsidies are pushing for the production of energy raw materials.
According to media reports, this year in Germany alone two million hectares out of the 12 million hectares arable land or about 17 percent of the total is dedicated for energy crops. The obvious fallout is on the areas for cultivation land for food and feeds.
On the heels of this turmoil came the tug-of-war between French President Nicolas Sarkozy and European commissioner for Agriculture and Rural Development, Mariann Fischer Boel. With Sarkozy throwing his weight behind communitarian preference, the commissioner, during the informal meeting of agriculture ministers in Portugal, rejected that the future CAP will be based on the principle of communitarian preference that favours the domestic agricultural productions.
The spokesman for Commissioner Boel declared that “It is not in our interest to turn the communitarian preference as a strength of European agriculture,” since the EU has become a net agricultural product exporter. We see opportunities to export our foods of quality in markets like China and India,” and added that the communitarian preference can only be used “in relation to our international obligations within the framework of the World Trade Organization.”
Stressing the need for an European protectionism policy while talking in the negotiations in the WTO, Sarkozy declared that “the developing nations want the rights of the big nations, but they must also accept the obligations, consider that they have only rights and have no obligations in a system of multilateral commerce” and emphasised this to India, China, Argentina and Brazil.
The French president added that “We cannot impose rules to our producers” and at the same time allow imports from other countries that impose the “environmental, social, fiscal and monetary dumping.” Sarkozy stirred not only strong reaction from commissioner Boel but also from trade commissioner, Peter Mandelson, who declared that accusations of the social dumping cannot be made because that would mean that the developed countries are not prepared to accept the comparative advantage that grant the low labour costs of third countries.
With this war of words going on at the top level, the farmers have nothing to gain except to miss out on a European tool to produce what consumers want in a truly competitive market, while ensuring higher standards of environmental protection, food quality and animal welfare. Last, but not least, it is incomprehensible for ordinary European citizens to fid that the Commission on one hand, reiterates at every possible opportunity strong interest in innovative farming and the creation of jobs in rural areas - in line with the Lisbon Strategy while on the other hand it is ready to siphon money out of agricultural sector to pump into high tech satellite applications. Only time can tell which one of the two can generate more jobs: Satellite industry or applied agricultural innovations.
Galileo, the satellite navigation system and the European Institute of Technology EIT, two of the dream projects of European leaders got the financial backing of the European commission, the executive arm of the European Union.
The Commission last week decided to overlook the welfare of the European citizens with proposals to finance the extra 2.4 billion Euro for Galileo and yet another 309 million Euro for the European Institute of Technology (EIT) through a smart revision of the Financial Framework 2007-2013. The proposal will enable the commission to transfer 2.189 billion Euro from the agriculture budget within the margin available in 2007 and 2008 under heading “Preservation and Management of Natural Resources.”
According to common knowledge, the “Preservation & management of natural resources” programme is intended to assist European farmers in the EU citizens’ demand for safe, quality food, produced without unnecessary waste, and a healthy environment. In 2003-4 the reforms of the Common Agricultural Policy (CAP) were ending to a large extent the unhealthy link between subsidies and production. Farmers are since then free to produce what consumers want in a truly competitive market, while ensuring higher standards of environmental protection, food quality and animal welfare.
Moreover, the commission had announced proposals to increase spending on Rural Development to boost growth and create jobs in rural areas - in line with the Lisbon Strategy. Thus the money was set for use not only for innovation and diversification but also for more agricultural activities.
In its quest to quench the thirst of scientific programmes, the Commission announced that these funds which were meant for the benefit of the European citizens won’t be needed, thus leaving a staggering margin of two billion Euro under the ceiling in 2008. To a layperson, this can not be explained as price tags on food shelves are renewed upward everyday and coming after a long period of relative price stability in the food sector. This is more than obvious to every person. Prices of milk and dairy products, vegetables oils have climbed up and the latest flour and bread price hikes have made headlines in all media outlets with Italians deciding to go without pasta one day recently.
The wave of demand that is sweeping across the Continents is also helped by panic buying on the Asian and South American areas as food shortage looms. Although harvest failures, crop mismanagement and other causes can not be ruled out, there is a clear cut case of high subsidies in the European Union for valuable fields being set-a-side and as high subsidies are pushing for the production of energy raw materials.
According to media reports, this year in Germany alone two million hectares out of the 12 million hectares arable land or about 17 percent of the total is dedicated for energy crops. The obvious fallout is on the areas for cultivation land for food and feeds.
On the heels of this turmoil came the tug-of-war between French President Nicolas Sarkozy and European commissioner for Agriculture and Rural Development, Mariann Fischer Boel. With Sarkozy throwing his weight behind communitarian preference, the commissioner, during the informal meeting of agriculture ministers in Portugal, rejected that the future CAP will be based on the principle of communitarian preference that favours the domestic agricultural productions.
The spokesman for Commissioner Boel declared that “It is not in our interest to turn the communitarian preference as a strength of European agriculture,” since the EU has become a net agricultural product exporter. We see opportunities to export our foods of quality in markets like China and India,” and added that the communitarian preference can only be used “in relation to our international obligations within the framework of the World Trade Organization.”
Stressing the need for an European protectionism policy while talking in the negotiations in the WTO, Sarkozy declared that “the developing nations want the rights of the big nations, but they must also accept the obligations, consider that they have only rights and have no obligations in a system of multilateral commerce” and emphasised this to India, China, Argentina and Brazil.
The French president added that “We cannot impose rules to our producers” and at the same time allow imports from other countries that impose the “environmental, social, fiscal and monetary dumping.” Sarkozy stirred not only strong reaction from commissioner Boel but also from trade commissioner, Peter Mandelson, who declared that accusations of the social dumping cannot be made because that would mean that the developed countries are not prepared to accept the comparative advantage that grant the low labour costs of third countries.
With this war of words going on at the top level, the farmers have nothing to gain except to miss out on a European tool to produce what consumers want in a truly competitive market, while ensuring higher standards of environmental protection, food quality and animal welfare. Last, but not least, it is incomprehensible for ordinary European citizens to fid that the Commission on one hand, reiterates at every possible opportunity strong interest in innovative farming and the creation of jobs in rural areas - in line with the Lisbon Strategy while on the other hand it is ready to siphon money out of agricultural sector to pump into high tech satellite applications. Only time can tell which one of the two can generate more jobs: Satellite industry or applied agricultural innovations.
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