Brussels, 02/06/2016 (Agence Europe) - On Monday 6 June, the European Parliament's agriculture committee will discuss the draft own initiative report by Angélique Delahaye (EPP, France) on common agricultural policy (CAP) tools for reducing price volatility on agricultural markets.
The rapporteur takes as her starting point that the EU's competitors provide substantial support from the public purse to shield their farmers from the effects of price volatility and that decoupled direct aid under the current CAP is “unsuited to situations of price volatility”. Delahaye considers that the risk management tools in Pillar II (rural development) of the current CAP are manifestly unsuited to the task of reducing the impact of price volatility on farmers' incomes.
Sectoral organisation and contractual systems. Delahaye recommends strengthening the organisational capability of the weakest links in the various agricultural sectors and strengthening contractual systems. Her draft report calls on the Commission to facilitate the introduction of contractual systems by adapting competition law to meet the needs of the agricultural industry within the framework of the CAP's basic rules, so as to permit commercial cooperation at the stage when produce is first placed on the market, irrespective of the type of producer organisation involved.
Risk management tools. The draft report recommends that the tools for risk management, particularly the various types of insurance and mutual funds, be developed. The rapporteur considers that mutual funds, established at the initiative of working farmers, and through which farmers' incomes can be stabilised to some extent as the profit margins on their produce fluctuate, “may offer an effective way to limit the effects of price volatility”.
Price observatories. Delahaye considers that agricultural markets must be transparent and that information about prices must be accessible and useful to all those involved. She emphasises that being aware of price movements in the various market segments is an advantage for farmers, in their negotiations with other stakeholders in the food chain. The draft report recommends that European agricultural price observatories be established for the various sectors of the industry, thereby allowing relevant data and forecasts to be made available at regular intervals.
The rapporteur decided not to broach the issue of counter-cyclical aid schemes which can be seen as crisis management measures (even though this was raised by France in its document on the CAP after 2020, see EUROPE 11563). Similarly, the matter of pricing and the setting of price levels is, in her view, a separate subject. Numerous amendments to the draft report are to be expected, however, addressing these sensitive issues. (Original version in French by Lionel Changeur)