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 milk quotas. Show all posts
Showing posts with label milk quotas. 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.”
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