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CAP debate intensifies but uncertainties remain

11 March 2013

As shown by the numerous press releases and statements recently published by farmers’ organisations, the debate on the future of the CAP is intensifying. Substantive progress, however, is apparently being held up by budgetary uncertainties.

There is considerable debate on the future of market management measures. Copa-Cogeca, the European farmers’ organisation, notes that “extreme volatility on agriculture markets…is one of the biggest challenges facing farmers”, and sees “much stronger measures to better manage the market and to help farmers and cooperatives deal with the extreme market volatility” as vital. Similarly, French farmers’ organisations, according to The Meat Site, have expressed concern that the EC is abandoning market management as a core policy tool, and stated their opposition to the use of market management solely as a safety-net mechanism. They further maintain that “[moving] to full decoupled assistance [i.e. non-product-specific farm support payments] is not an appropriate response to price volatility.” 

Recent developments have sent contradictory signals on the future of traditional market management measures. On the one hand the EC has been steadfast in its rejection of any abandonment of the transition to a production quota-free dairy regime (see Agritrade article ‘Dairy quota abolition on track but EU farmers concerned’, 28 January 2013). On the other hand, there is an emerging consensus across EU institutions on extending production quotas in the sugar sector until 2020, as shown by the European Parliament Agriculture Committee’s vote in January in favour of extending the EU sugar regime until 2019/20.

There is also considerable controversy over the EC’s “greening” proposals. EurActiv.com reports senior officials of the current presidency of the EU council as conceding that “some of the [EC’s] most ambitious measures that link direct payments to… environmental performance are unlikely to survive because of anticipated cuts to the EU budget.” The UK National Farmers’ Union favours “making greening requirements more practical and workable”, while Copa-Cocega is calling for “more flexibility when applying greening measures”, so farmers can choose the measures most suited to their farm situation and most likely to yield environmental benefits. The Irish presidency, while acknowledging the need for “some flexibility for different countries”, has rejected a “menu” approach to environmental measures, maintaining that this would be too “cumbersome to apply evenly across the EU”.

Copa-Cogeca remains concerned over proposals to create Ecological Focus Areas (EFA), since this would mean “reducing the amount of agricultural land available for production”.  The International Federation of Organic Agricultural Movements (IFOAM) for its part has criticised what it perceives as a political watering-down of the EC greening proposals, and has called on EU leaders to ensure “a food and farming policy that delivers sustainability across both pillars” (Pillar 1 of the CAP includes direct aid payments and market management tools, while Pillar 2 covers rural development).

In December 2012, the French agriculture minister suggested that “the next CAP could be postponed for a year – to 2015”. Given delays in finalising the budget framework, EC officials are reportedly “anticipating that interim agricultural policies will be needed for 2014”.  According to press reports, it is increasingly accepted in both the EC and EU Council that the implementation of reforms is likely to be delayed until 2015.

In addition to reports on European concerns over the CAP reforms, EurActiv.com has reported that the UN Special Rapporteur on the Right to Food has called for the EC to “undertake detailed monitoring of the impacts of EU farm exports and imports on developing countries, consult developing country farmers and conduct a proper assessment of the impacts on the right to food”.

Editorial comment

Given budgetary pressures on EU member states, an extended safety-net policy may prove the most attractive option. Pressure from farmers’ organisations, however, could see a more extensive use of traditional market management tools than initially envisaged. It could also lead to greater retention of coupled support than initially conceived (e.g. for cotton).

Deferment of implementation of reforms until 2015 would see the implementation of interim measures, the external effects of which will not have been fully assessed. This gives added urgency to the call from the UN Special Rapporteur for detailed monitoring of the external effects of the deployment of EU policy tools.

The impact of ongoing CAP reforms on the global corporate strategies of EU companies in affected sectors (e.g. in the dairy sector – see Agritrade article ‘End of dairy quotas leads to greater external focus of EU dairy companies’, forthcoming, and Agritrade interview with Peter Helk, ‘ A Danish perspective on investment in African dairy sector development’, 24 February 2013) gives added importance to calls for the extension of EU policies on strengthening the functioning of food supply chains to include trade relations with developing countries. (See also Agritrade article ‘ Sustainability concerns go mainstream in Dutch fruit and vegetable sector’, 29 July 2012). 


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