Brussels, 22/02/2010 (Agence Europe) - On Monday 22 February in Brussels, the French minister for agriculture, Bruno Le Maire, proposed that the CAP (common agricultural policy) after 2013 acquire instruments that guarantee “stronger but modern market regulation”, in an effort to fight against “price volatility that is incompatible with economic balance in the agricultural markets”. He also mentioned a safeguard clause in the event of serious economic crisis, aimed at preventing prices falling too much.
He declared that “if we want to keep a strong agricultural economy in Europe, we need European market regulation”. Le Maire submitted his proposals to the Council of EU agricultural ministers and the European Commission. France has no wish to go back to outmoded mechanisms, which other countries do not want any more and neither does it want public management of product volume and prices, explained Le Maire.
France said that before discussing the question of post-2013 direct aid, the EU should reach an agreement on the implementation of new instruments.
Community mechanisms. Le Maire called for intervention instruments (public purchase of products to support prices), “which are more flexible, quicker and open to all sectors”; maintaining a private storage mechanism; the creation of a comprehensive safeguard clause (in the event of very serious crises, the Commission should have the power to propose measures to get the market back to balance, explained Le Maire. This is what occurred in previous health crises, as with the outbreak of mad cow disease and Le Maire believes that this ought also to be the case should there be an economic crisis); the development of long-term markets, which can provide security to contractual relations between producers and the approval by the subsidiary. The French minister explained that “I am aware of the specific risks involved in long term markets; we therefore need efforts made by the actors, which is being done in the financial sector”.
Agricultural sectors. France is suggesting that the supply side of agricultural trade is better organised (with regard to the Netherlands and Denmark, producers can exert pressure on prices because they have a single cooperative that manages volume and sets prices, explained Le Maire). Improving the way in which the agricultural supply side functions would be done by way of a review of European competition law, which would enable producers to organise themselves better. The review of competition law should also enable producers, via the different inter-professional intermediaries to set “price indicators”. France also supports “certain clauses” in up and down stream contracts. It is therefore proposing the creation of a European Observatory collecting production data from the different sectors in the agricultural arena, related to demand and prices (this data will be published and will also provide indications on prices and volume, as well as practical margins in each sector); opportunities for collective management of risk by creating mutual funds (putting money aside when prices are high and using it when prices fall). Private funds of this kind do exist now. Le Maire wants public participation in these funds.
“Individual responsibility” of farmers. France is calling for the development of “precautionary savings” and European aid for insurance systems in order to encourage producers to cover themselves more sufficiently.
Le Maire concluded that “everything has been studied very closely with Germany. We will work together on these regulatory instruments”. (L.C./transl.fl)