Brussels, 07/11/2014 (Agence Europe) - The sensitive dossier of the funding of the common agriculture policy (CAP) in 2015, particularly the risk that the crisis reserve will be used up early, is on the agenda of the meeting of the agriculture ministers of the EU, to be held in Brussels on Monday 10 November.
The Agriculture Council will also debate an application from Cyprus for the authorisation of state aid and there will be several points under 'any other business': organic production (declaration of the Visegrad group: see EUROPE 11191), Russian ban on EU peaches and nectarines (by request of Greece), maize rootworm (by request of Austria and Hungary) and a follow-up to an international conference on bee-keeping (by request of Slovenia).
It will be a baptism of fire for Phil Hogan in the post of European Commissioner for Agriculture. At the meeting, the ministers will discuss the funding of the CAP and, in particular, the amending letter to the draft Community budget for 2015. This letter, which was presented in mid-October, provides for additional revenue of the CAP budget, of €448 million, to be used not to support products hit by the Russian ban on agri-food products from the EU, but to pay for other priority programmes, such as fighting Ebola. Consequently, the market measures set in place following the ban are to be funded using the agricultural crisis reserve in place for 2015 (€433 million obtained by cutting direct payments by 1.3%), which will use up most of it.
The Council's debates are likely to be tough, as the agriculture ministers, particularly those from the member states observing the greatest budgetary rigour (United Kingdom, the Netherlands, Sweden and Germany), are generally obliged to give their finance counterparts the final say over dossiers of this kind.
The funding of the CAP was on the agenda of the committee on agriculture of the European Parliament on Thursday 6 November, where the members felt that it was unacceptable to use the 2015 agricultural crisis reserve to pay for support measures to mitigate the Russian ban (EUROPE 11192).
Agricultural organisations write to Jean-Claude Juncker. The Presidents of the agricultural organisations and cooperatives of the EU (Copa-Cogeca), Albert Jan Maat and Christian Pèes, followed the lead of the members of the committee on agriculture of the EP (see EUROPE 11189) on 31 October, when they wrote to Jean-Claude Juncker, President of the European Commission, to decry the use of CAP funding for other areas, at a time when “farmers are hit by an extra cut in income of 409 million euros, due to the dairy super-levy for the period 2013-2014”. They argue that the impact of the ban set in place by the Russian authorities is only just beginning and that the pinch will really be felt in 2015. “The impact will be particularly harsh in sectors such as fruit and vegetables, pig and beef meat as well as in the dairy sector, with their total annual exposure to the Russian market of 5.1 billion euros”, Albert Jan Maat et Christian Pèes write. “It is also worth noting that some of the member states which are neighbours of Russia, such as the Baltic States, Finland, Poland and others, have been hit harder and are suffering the most serious economic consequences”. Copa-Cogeca feels that it is “vital that the emergency measures are paid for with resources outside the CAP”, including “all of the additional market management measures required “.
Cypriot state aid. The ministers will be presented with a request from Cyprus, which is seeking the approval of the Council to keep in place the tax exemption it has applied since it joined the Union in 2004, in the form of a zero rate of tax on fuels for agricultural purposes. The country reportedly never notified this scheme to the Commission. Derogations of this kind are no longer possible under the 2014-2020 guidelines on state aid in the agricultural sector, but were still permissible, subject to certain conditions, up to the end of June of this year.
The Commission has suggested to Nicosia that it use the 'de minimis' aid regime instead, or set in place a scheme which does not use a zero rate, as this requires in-depth justifications. Cyprus, which stresses that its farmers are in a very difficult situation (economic crisis, drought, Russian ban on agri-food products from the EU), is therefore seeking the backing of the other member states to be able to continue to grant this aid, in the form of a Council decision which must be taken unanimously, as allowed for by article 108 of the European Treaty. When a preparatory decision was made at the level of the experts of the Special Committee on Agriculture (SCA) on Monday 3 November, many delegations entered scrutiny reservations, leaving the decision up to the ministers. Several countries (Sweden, Germany, Denmark, Lithuania, Slovakia, Belgium and Poland, amongst others) had grave misgivings about using article 108 and called on Nicosia to explore other options with the Commission. (LC)