Brussels, 17/02/2011 (Agence Europe) - In Strasbourg on Thursday 17 February, the European Parliament (EP) called for measures to be taken to curb volatility on agricultural markets and provide protection from the excesses of speculation on raw materials markets. Another priority of the joint resolution (EPP, S&D, Greens/EFA, ALDE, GUE/NGL, ECR) approved by MEPs was creating food stocks to avoid crises.
The EP stresses that a strong and sustainable agricultural sector across the EU and a thriving and sustainable rural environment, ensured by a strong CAP, “are vital components in meeting the food security challenge”. It stresses that concentration in the input sector has devastating effects on the sustainability of farming and expresses concern about low farm incomes in the EU. It also calls on the EU and developing countries to “promote land ownership as a tool for reducing poverty and guaranteeing food security”.
Reducing waste. In adopting an amendment from the Greens/EFA, the EP calls on the EU to “launch campaigns and put in place structural changes to minimise food waste”.
Transparency on markets and tackling speculation. The EP asks the Commission to establish better information flows providing timely and quality data on market developments, taking into account the issue of stock dislocation. It also wants to increase transparency on commodity markets and calls on the Commission “as a matter of urgency” to introduce “effective and robust measures to address volatility in agricultural markets”. Parliament stresses that “it is not possible to take effective action against major price fluctuations without adequate levels of intervention stocks or strategic stocks”. It considers, therefore, that the role of market intervention instruments must be a key part of the future CAP.
The EP asks the Commission to take the necessary steps to address the excesses of speculation on commodity markets. It urges the G20 to coordinate the creation of preventive mechanisms against the excessive fluctuation of prices and to work towards regulation, specifically designed to tackle food and agricultural crises, and asks for solutions to address excessive price volatility to be coordinated at international level. It condemns the abusive activities of speculators in global commodities, agricultural raw materials and energy which “accentuate the volatility of food prices and deepen the global food crisis”.
The Parliament is in favour of “bolder European action to tackle the problem of price manipulation”, including through a mandate issued to regulators and oversight bodies to restrict abusive speculation, and calls on the Commission to ensure that dealing with food commodity derivatives is “restricted as far as possible to investors directly linked to agricultural markets”.
With the adoption of the Greens' amendment, the EP advocates a targeted global system of “decentralised regional and local food stocks”. This mechanism will help facilitate world trade when price spikes occur, warding off recurring protectionism and easing the pressure on world food markets. The EP considers that these stocks should be managed by a coordination body under the aegis of the Food and Agriculture Organisation (FAO).
MEPs call on national governments, in line with FAO recommendations, not to adopt export restriction measures, since they cause greater uncertainty on the markets and disrupt world markets, potentially, therefore, driving prices up still further at global level.
As the increase in food prices hits the poorest countries and the least well-off in society hardest, Council President Janos Martonyi says that there has to be a debate on the current and future role of the CAP. First and foremost, order has to be brought to the market and assistance provided for the most vulnerable but, in the medium term, global food security has to be ensured through a sustainable agricultural policy which is not harmful to the environment and meets the needs of developing countries. On 17 March, the Council is expected to adopt conclusions on the strategic role of the common agricultural policy, with legislative proposals from the Commission in the second half of the year. Martonyi stressed the need for international cooperation to combat hunger in the world, particularly through helping the poorest countries produce enough to meet their own needs. The EU must also support every initiative that could put the brakes on rising prices. Martonyi said the role played by speculation in price volatility is not entirely clear, but this issue has been identified as a priority by the French Presidency of the G20 and the EU will work “shoulder to shoulder” with it.
European Agriculture Commissioner Dacian Cioloº said that, with soft wheat, the global situation is tense but there are no problems of market supply. Nevertheless, to ease the end of the marketing year for the European Union market, the Commission has just taken measures (see related article). Estimates for global end of marketing year stocks of soft wheat for 2010-2011 are better than in 2007. Sugar prices are reaching new records, with white sugar reaching almost €625 per tonne in mid-January. This increase in prices follows on from two years of global shortfalls due to low levels of production. According to the latest forecasts, however, the situation worldwide should be balanced for the 2010-2011 period, the commissioner said. He highlighted the link between agricultural and development policies. He said: “I am working closely with Commissioner Andris Piebalgs on these issues, to better adapt EU development policy, too, to the issue of food security”. He recommended initiatives in the following areas: - transparency in relation to stocks: he argued for fuller information, better handling of this information and for a global “forum for discussion” between the main market makers - exporters and importers - “so as not simply to realise there is a crisis when it happens”; - a “rigorous and balanced” approach to improve transparency and monitoring of agricultural commodities derivatives, with effective regulation that is in the interests of both producers and consumers; - identification of market mechanisms “which will allow us to avoid disasters” in some sectors following this temporary tension over producers' income levels and input costs (he was thinking in particular of stock farming), - the contribution global trade can make to food security: there remain things to be done in this area - trade policy must not be allowed to be an isolated policy, Cioloº said.
His comments were well received by MEPs, pleased to be able to discuss these matters in the day time, rather than in the night time sessions to which agricultural policy is often relegated. Agriculture policy and food policy are, indeed, indissociable, said Mairead McGuinness (Ireland), speaking for the EPP, concerned at the problems facing consumers and also those of farmers whose production costs are rising inexorably. Other EPP MEPs shared these concerns: Sergio Silvestris (Italy) called for strong income support for farmers and investment for rural development, which are both, also, in the interests of food security. Land must not be left fallow; it must be productive, argued Herbert Dorfmann (Germany) - after the debate Commissioner Cioloº gave assurances that there was no question of leaving land fallow. Gay Mitchell (Ireland) said that Europe had to show imagination in helping the poorest countries feed themselves, cooperating with countries such as Thailand, which has a rich agriculture yet which exports very little food products to the neighbouring countries, which need them.
The upward trend in agricultural and agricultural raw materials prices is “well established and will be long-lasting”, stated Stéphane Le Foll (France) for the S&D Group. He said the tension on agricultural and agricultural commodities markets had been aggravated by price volatility and “price volatility is a consequence of the financialisation of the global economy”. That was another matter that had necessarily to be addressed if the agricultural and food issues were to be resolved. In this, there were two points: “yes, there has to be transparency on stocks, but there has also to be a public policy on stocks in Europe and global management of these stocks, at UN level”. He suggested, too, that there had to be “regulation of financial markets and financial speculation”, in particular no longer allowing quantities on which there is speculation not to have any relation with actual quantities being traded on the markets. Le Foll concluded by saying that “we need to change our development policy to make sure that globally - and Europe is a player - we invest once again in agriculture because we need all forms of agriculture to feed people of the world”.
Europe and the world need a comprehensive approach, argued UK Labour MEP Michael Cashman, fulminating against the “obscenity” of the “land grab” by foreign companies for their own interests. Marc Tarabella (S&D, Belgium) did not see extreme price volatility as an inevitability. His advice was to concentrate on subsistence agriculture and regional markets, put in place a policy for managing stocks and “purely and simply, ban speculation on basic foodstuffs”.
The European agricultural model, built on cheap energy and plentiful water resources has had its day, according to ALDE spokesman, Scot George Lyon: it has to be re-thought in the light of current constraints, with the emphasis being put on sustainability. José Bové, for the Greens/EFA Group, drew attention to the plight of livestock farmers, hundreds of whom are facing bankruptcy, and put forward three definite initiatives to meet the crisis: - building up cereal stocks in countries to be made available immediately to farmers at subsidised prices; - index-linking the price of meat paid to farmers with prices of animal feeds; - a mechanism that will enable the transfer of part of the aid for cereals to livestock production.
Several UK MEPs (principally from Scotland and Northern Ireland), including James Nicholson (ECR) and Diana Dodds (non-attached), also expressed their concern for the livestock sector. GUE/NGL speakers railed, in particular, against speculation by multinational companies which do not hesitate to “extort” land from local communities, in the words of João Ferreira (Portugal). Speaking for the group, Gabriele Zimmer (Germany) wondered why it was so difficult to draw the lessons of past crises and to tackle hunger (if necessary by using new methods, which respect the “food sovereignty” of those who work the land).
Commissioner Cioloº felt that MEPs in their positions had been supportive of his intentions. “It is obvious that, if more produce is needed on the market, more investment is needed in agriculture. But, so that farmers can invest, they need, above all, stable incomes to give them the courage to do so”, he said. The debate also showed that “our common agricultural policy and the agricultural policies of the developed countries have to be in tune with the development of the agriculture of the countries of the South and that our development and cooperation policy with the countries of the South has to be in tune with the common agricultural policy”. At the same time, maybe there should be a review of the CAP instruments for “managing these extreme situations on the market”, while still letting the market play its role, Cioloº suggested. Perhaps, too, it may be necessary to “review our role in agricultural policy and in development policy and the way we deal with the issue of food in various policies: trade, development and financial”. Maybe there, too, “concerted action is needed”. (L.C./L.G./transl.rt)