Brussels, 13/07/2012 (Agence Europe) - EU agriculture ministers will meet in Brussels on Monday 16 July to continue their discussions on the reform of the common agriculture policy (CAP), in the first meeting chaired by Cypriot Minister for Agriculture Natural Resources and Environment Sofoclis Aletraris. The Cypriot Presidency of the Council of Ministers would to come to a “partial general approach” on CAP reform at November's Agriculture Council. Also on the agenda for discussion on Monday will be the situation on the milk and dairy market and cooperation with China.
Aletraris, who will on Monday present the Presidency programme for his counterparts, confirmed in a meeting of the European Parliament agriculture committee on 10 July that reform of the CAP will, of course, be his priority over the course of the second half of this year. He told journalists that he would have an “informal dialogue” with MEPs (chair of the committee and rapporteurs) in order to make progress in negotiations, at least on issues that are not related to discussions on the EU financial framework for 2014-2020.
Council discussion on the reform will consider European Commission proposals on rural development, specifically risk management instruments (mutual funds to stabilise income, insurance) and single market organisation, from the angle of exceptional crisis support measures.
Rural development. EU agriculture experts held a discussion on risk management on Monday. The Commission and a number of delegations (including those of Germany, Denmark, United Kingdom, Netherlands and Sweden) took the view that it was not for the rural development fund to provide the initial capital for mutual funds. The main danger in the Commission's view is that the rural development fund might become the “prisoner” of the mutual funds in which it has invested: if there are no crises and, therefore, no pay-outs from the funds, the money will be “frozen” and not be able to be used for other rural development initiatives. The countries which share the Commission's view argue that farmers have to be made responsible and have themselves to invest in these funds. The most radical of these countries, the so-called “liberal” countries, believe that risk management instruments in the second pillar (rural development) are superfluous: direct aid and a safety net suffice in their view. Some countries, such as Poland and Spain, are concerned at possible differences between the countries, and others, which include Portugal, Austria and Bulgaria, advocate a very limited approach as a possible way of encouraging farmers to participate in mutual funds. France and Italy wonder if public intervention would not be more effective for farmers taking part directly in mutual funds.
Private insurance intervention in income stabilisation poses a serious problem to several delegations, such as those of Germany, Sweden and United Kingdom. These countries are concerned that public funds might subsidise private insurance and wonder if these rules are in line with those of the World Trade Organisation (WTO). The Commission pointed out, moreover, that most of the companies proposing insurance in this area offer marginal compensation on the basis of lost production (which is incompatible with the WTO's “green box”) and not on loss of income. Even the countries which support possible intervention by private companies in the income stabilisation instrument (Spain, France, Portugal, Romania, Finland, Slovenia, et al) make clear that there is no question of public subsidies going to private firms, but rather to the farmers who choose private insurance.
Market measures (see EUROPE 10648). At a discussion in the Special Committee on Agriculture (SCA) on 2 July, most member states were generally satisfied with the exceptional market measures proposed by the European Commission as part of the reform (preventing market disturbance, support in the event of animal disease and loss of consumer confidence, etc.). Several, such as Spain and France, felt, however, that these provisions should apply to a greater number of sectors. The Commission said it was not keen on such an extension, in view of budgetary constraints. Conversely, others, such as Germany, Sweden, United Kingdom, Netherlands and others, took the view that, in general terms, the measures should only be seen as a safety net in the event of a serious crisis on the markets.
In the “other business” section of Monday's Council meeting, Poland and Lithuania will call for appropriate measures against the deteriorating situation on the dairy market (the Commission will deliver its assessment of the situation to the Council). Commissioner Dacian Ciolos will provide information agriculture and rural development cooperation plan which he signed in Beijing on 11 June with Chinese Agriculture Minister Han Changfu. Austria and the Netherlands will state their wish to have the current legal framework for the protection of animals during transport strengthened. Denmark will inform Council of the conclusions of the 31st conference of the directors of paying agencies of the EU, which took place in Horsens on 20-21 June. (LC/transl.rt)