Think tank Farm Europe set out its vision in Brussels late in the afternoon of Tuesday 7 February for the common agricultural policy (CAP) after 2020, a vision centred on risk management, the food supply chain, competition rules and international trade against a backdrop of Brexit.
At an event in the European Parliament, under the patronage of MEPS Michel Dantin (EPP, France) and Giovanni La Via (EPP, Italy), Farm Europe laid out its proposals for the post-2020 CAP, as part of the public consultation launched on this issue by the European Commission (see EUROPE 11717).
European Agriculture Commissioner Phil Hogan, who took part in the presentation, stressed the need to strengthen the resilience of farms, particularly by means of risk management tools. “We must modernise the CAP, giving it a toolkit to react quickly and effectively in the event of future price shocks”, he said.
Climatic insurance to manage risk. Building on the conclusions of a forum held in Italy in October 2016 (see EUROPE 11650), the Farm Europe recommendations on the CAP after 2020 call first and foremost for a “risk management toolbox” tailor-made for the situation of the farmer and with climatic insurance as its centrepiece. This instrument, which would be triggered when losses reach 20% of turnover (rather than 30% as at present), would cost the EU agriculture budget €4 billion per year in the (unlikely) event that all farmers have to turn to it.
Farm Europe also recommends farmers’ income stabilisation tools, including mutual funds protecting margins and turnover. Such mutual funds could deliver practical answers for strategic sectors, such as the dairy industry. Farm Europe further proposes a precautionary savings mechanism, backed by the CAP, that would allow cash reserves to be built up and income tax to be stabilised. These tools would supplement direct payments “whose legitimacy remains untouched”.
Competition rules and the food chain. The second part of the Farm Europe proposals is a “new deal” within the food supply chain. The EU should, in the first place, reaffirm that the CAP takes priority over general competition rules. To this end, the CAP should be considered the appropriate geographical level in the chapter of the 2013 regulation on the common organisation of the market (CMO) that deals with competition (Article 207).
At the same time, transparency should be improved, the use of contracts made compulsory at the request of farmers, the provisions of the “diary package” extended beyond 30 June 2020, producer organisations (beef and veal notably) authorised to negotiate collectively with buyers and interbranch organisations allowed to negotiate agreements on “value sharing clauses”. Lastly, to tackle unfair practices in the food chain, a set of banned practices with clear and dissuasive sanctions should be established at European level, fully securing the identity of complainants.
Environmental and economic sustainability. To ensure the environmental sustainability of the sector, Farm Europe recommends a shift to a results-based policy that is complementary with the current greening criteria and based on the will of the farmers themselves. It suggests encouraging the use of high-tech practices that will make it possible to meet the challenges posed by the commitments made in the Paris climate agreement –practices which could be seen as equivalent to greening when they meet the criteria – involving “massive” CAP investment in innovation. Smart agricultural practices is to be the focus of the Farm Europe forum in 2017.
The think tank highlights the problem of “fragile and intermediate areas” for which coupled payments and specific aid will remain “relevant”. For these areas, it proposes a “chain approach”, or even the development of production such as biofuels but also reflection on the trend towards specialisation and says “the question of farm expansion via intensification or extensification in order to generate economies of scale” should not be avoided or hindered “for ideological reasons”.
Science-based legislation. To encourage a “harmonious relationship” between diet and health, Farm Europe says a number of obstacles have to be overcome. Food supply chain players (agriculture, industry and trade) must, it argues, define a “clear and joint strategy”, the “credibility” of EFSA has to be “strengthened”, scientific consensus needs to be improved “to avoid confusion” among consumers and legislation should be “based on real and credible scientific evidence, not assumptions”.
Brexit and trade. Farm Europe acknowledges that Brexit will mean “a serious hit for the overall EU budget”. The clear commitment of the British government to make the UK “the biggest open economy in the world” will make it difficult to achieve a full free-trade agreement between the EU and the UK “without any safeguards”, the think tank warns.
Brexit should also provide the opportunity to review the way that mandates for negotiations with third countries are given to the European Commission, Farm Europe goes on to say, stating that the “best response” to more competition from other countries is to improve the position of the European agri-food sector, that is to say, its competitiveness, in share of world markets and its resilience to external shocks. (Original version in French by Lionel Changeur)