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News Updates on the CAP “Health Check”
The European Commission (EC) issued a press release yesterday which noted that, “The European Commission today proposed to further modernise, simplify and streamline the Common Agricultural Policy and remove remaining restrictions on farmers to help them respond to growing demand for food. The so-called CAP Health Check will further break the link between direct payments and production and thus allow farmers to follow market signals to the greatest possible extent. Among a range of measures, the proposals call for the abolition of arable set-aside and a gradual increase in milk quotas before they are abolished in 2015, and a reduction in market intervention. These changes will free farmers from unnecessary restrictions and let them maximise their production potential. The Commission also proposes an increase in modulation, whereby direct payments to farmers are reduced and the money is transferred to the Rural Development Fund. This will allow a better response to the new challenges and opportunities faced by European agriculture, including climate change, the need for better water management, and the protection of biodiversity.”
And with respect to food prices, a separate EC press release from yesterday stated that, “The European Commission today adopted a Communication setting out potential policy responses to mitigate the effects of rising global food prices. The document will be discussed at the European Council on 19-20 June. The Communication analyses structural and cyclical factors and proposes a three-pronged policy response, including short-term measures in the context of the Health Check of the Common Agricultural Policy (see IP/08/762) and in the monitoring of the retail sector; initiatives to enhance agricultural supply and ensure food security including the promotion of sustainable future generations of biofuels; and initiatives to contribute to the global effort to tackle the effects of price rises on poor populations.”
In an update posted yesterday at her blog, EU Commissioner for Agriculture and Rural Development Mariann Fischer Boel stated that, “Among a wide range of initiatives that aim to make the CAP simpler, better and more efficient, I am also putting forward proposals that can help farmers react even better to price signals, thus ensuring that supply meets the rise in demand.
“In a world like that of today, we cannot defend artificial restrictions that hold back farmers from responding energetically to booming global demand. The greatest enemy of high prices are high prices that encourage farmers to produce more. But this presupposes that our agricultural policy does not distort price signals or keep the farmer from responding to them. This is the rationale behind my proposal to phase out the milk quotas and abolish the set-aside scheme, which has left up to ten percent of agricultural land fallow.
“Some people have been concerned that I have a secret plan in the drawer to fully unleash market forces at the expense of the environment and those farmers that are not in a position to embrace new market opportunities. The Health Check proposals are proof that nothing could be further from the truth.”
Commissioner Fischer Boel also noted that, “Likewise, abolishing the set-aside scheme does not mean that we give farmers the green light to plough up sensitive areas with no regard for biodiversity and other environmental aspects. That is why I have proposed to link the abolition of the set-aside scheme with new demands for buffer strips along watercourses. That would be the stick. But there is also a carrot as I will boost the financial support to agri-environmental projects under the rural development policy.”
An audio replay of a press briefing Commissioner Fischer Boel held yesterday on the Health Check proposals has been posted here.
In addition, an audio summary covering recent CAP developments was presented yesterday on the BBC’s “Europe Today” Radio program with Audrey Carville.
An excerpt of the program is available here (MP3)- the clip features analysis from Jack Thurston of the CAP Health Check Blog.
James Kanter reported in today’s New York Times that, “The European Commission proposed on Tuesday an overhaul of farm spending that fell far short of the liberal farm policy favored by countries like Britain but sharpened a debate with France, which has sought to preserve generous support for agriculture.
“The proposals, which would cover the period to 2013, are broadly aimed at moving Europe’s Common Agricultural Policy farther away from market-distorting systems like quotas, which keep prices artificially high, and payments to farmers linked to the amount they produce.
“The European agriculture commissioner, Mariann Fischer Boel, said the new measures were ‘all about freeing our farmers to meet growing demand and respond quickly to what the market is telling them.’”
An editorial posted at The Wall Street Journal Europe Online today stated that, “Yesterday’s proposed changes to European farm subsidies are billed as a salve for soaring food prices world-wide. Alas, Brussels’ plan is too little, too late to help people in Manila or Port-au-Prince. But the reforms are a teeny step in the right direction – which, on Planet Europe, is better than nothing.
“The EU spends more than €40 billion a year on agricultural subsidies, not to mention various import quotas and tariffs that keep this huge consumer market closed off to farm trade. European farmers soak consumers twice: first by taking tax revenues and then by using their subsidies to price foreign competitors out of EU markets.
“These trade distortions are one reason global food markets don’t work as well as they might, exacerbating today’s problem of rising commodities prices. Europe isn’t alone; the U.S. and other rich nations have similarly harmful farm policies. Now poorer nations are showing that they’ve learned the protectionist lesson: In recent weeks, several developing countries have slapped export duties on key crops to keep food within their borders.”
The Journal editorial added that, “Fixing the CAP – Common Agricultural Policy – would begin to undo the global harm done by Europe’s agricultural policies even if it won’t soon ease the food crisis itself. Yesterday’s proposal by EU Agriculture Commissioner Mariann Fischer Boel came well after the planting season and must still be approved by member states. While the package of changes may still be watered down or rejected, the best-case scenario is agreement in November, with France leading the charge against reform. Any impact on production wouldn’t be felt in markets until next year’s harvest at the earliest.”
And Andrew Bounds reported yesterday at the Financial Times Online that, “Europe’s unspent agricultural subsidies could be given to farmers in poor countries to boost production and alleviate hunger under a plan being considered by the European Commission.
“High crop prices have left hundreds of millions of euros earmarked to buy unsold stocks from European farmers unspent while millions cannot afford to eat in poor countries. Mariann Fischer Boel, the farm commissioner, proposed on Tuesday that they be given to developing world farmers to buy seeds and fertiliser.”
The FT article added that, “‘Emergency food aid is fine in the short term but the developing world needs to grow more. We need to teach them how to fish, not just give them a fish,’ she told the Financial Times, adding that for two decades agriculture had been ignored by rich country donors.
“The United Nations Food and Agriculture Organisation asked last December for $1.7bn to help 37 countries with acute food shortages to boost domestic production. The Commission agreed to examine providing a significant chunk but not all of this money, officials said.”
Keith Good
