Tell the truth. The events of last week in Madrid at the Latin America Summit confirm the necessity of further reflection of European and international agricultural policies (see this section in yesterday's edition of Europe). In the background to the official declarations and papers prepared in advance, Southern and Central American countries (not including Chile and Mexico) were unable to conceal their dissatisfaction, indeed, their disappointment with the EU's refusal to give them more assurances or do more than make promises about their agricultural products gaining access to European markets. This is not the end of the matter. As long as Europe fails to grasp the political nettle and tell the truth, the situation will get worse, namely, that it is unable to totally open its borders to these products, and other fields for co-operation should be targeted instead, where Europe could do far more. The behaviour of some senior European representatives is tainted with a cowardice that is totally unacceptable, they have made promises in the past that they have been unable to keep and the subsequent rhetoric and demagogy is prolonged.
Reality is clear. Not only is the EU unable to commit itself to agricultural free trade, it is even incapable of making a few modest concessions, such as the additional quota the European Commission proposed for importing quality meat from Argentina, as a token of good will to this country in its difficult times. The same Member States which refuse to make this gesture (they admit that it would be just a one off measure), previously approved the free-trade zone with Mercosur and continue to make declarations about the principle of opening up the agricultural markets. We find the same hypocrisy in the behaviour of the European Parliament, which changes its position depending on what discussion it is having: protection of European agriculture and promises to small farmers if agriculture is on the agenda, opening up of the markets and promises to third countries (whether they are Latin American, Mediterranean or from elsewhere) if the subject is external relations. Compared to this, I prefer the brutal frankness and occasional arrogance of US politicians and senators. I have detected similar attitudes in University circles. Lecturers on both sides of the Atlantic exchange compliments and invitations to seminars and other academic events but my voice clashes and is badly received in this genteel milieu.
The unexpected compromise. Something is, however, afoot. I have even witnessed within the Community institutions themselves, a better understanding of the agricultural situation. Franz Fischler recognised in informal discussions that there would be no more rice produced in the EU if the "Everything but Arms" initiative is carried out in full (see our bulletin on 30 April page 8), which I've been saying for a long time. But the example of the change in tone which I would like to underline today is the Recommendation of the European Economic and social Committee (ESC) on the future of the Common Agricultural Policy (CAP), based on the report of German adviser, Lutz Ribbe, with the Recommendation being elaborated at the request of the European Parliament while awaiting the revision by the Commission of the CAP's progress half way through its course. Whilst awaiting the European Parliament's own recommendation (which will be made next week with votes on the Fiori and Rodriguez Ramos reports), this ESC Recommendation represents the only "institutional" recommendation that has so far been made. It was adopted with almost total unanimity (some abstentions, no vote against), which means that a compromise had been reached in the often divergent interests of farmers, processing industries and consumers. This is no mean achievement and is particularly revealing of current developments.
Conclusions on trade. What is contained in the Ribbe Recommendation? Here are some of the extracts on trade aspects. "External protection safeguarding Community preference on sensitive European agricultural products is one of the cornerstones of CAP. Ending this arrangement, either by a decision of the WTO or the setting up of free-trade zone would threaten certain fundamental aspects of CAP and the multi-functional nature of European agriculture… International negotiations must not simply focus on the suppression of trade barriers but must also create the conditions for fair trade and compel all WTO Member States to respect minimum standards of environmental and social protection. Liberalisation must distinguish between situations and demands of different production sectors. The so-called non-trade fields must also be negotiated in order to guarantee the multi-functionality of agriculture… Firm European provisions in genetics or animal welfare, for example, must not be bypassed with imports from less stringent third countries…The ESC hopes that the Commission will rest coherent as the cultures and countryside that stem from the European agricultural model are not merchandise but part of society's heritage that policies should aim to protect." The EU must simultaneously "reduce as much as possible all subsidies for exports…it should open up its quality markets (without supporting exports) and not the mass markets (for example, cut-price cereals for China with export subsidies)".
The analysis. We can see it that this Recommendation does not systematically gel with the thinking of some farmers: "refunds" for exports, which have enabled some large producers and traders to develop strong positions due to enormous subsidies from the EU budget, have been condemned. Some of the conclusions mentioned on the Ribbe recommendation result from a detailed analysis of the situation, some elements of which I will explore:
- The 1992 reform has already eliminated a large part of the previous CAP problems like the butter mountains, milk powder and cereals or the destruction of fruit and vegetables. The hitherto excessive expenditure given over to "interventions" (withdrawal of products from the market) and subsidies for exports have been radically reduced;
- Production is more oriented to the market and consumer. Farmers no longer produce directly for the warehouses or for destruction;
- The multi-functional role (and not simply the productive role) of agriculture is now recognised by the public and farmers should be compensated for additional tasks that cost them money without bringing them anything (at the beginning at least);
- World prices do not take into account benefits resulting from multi-functionality and are lowered by "modes of production that are opposed to European values" (absence of standards on animal welfare and environmental protection, expanding areas of production banned by the EU).
What remains to be done. These principles are, nonetheless still not definitively accepted and reform is far from finished. The Ribbe Recommendation indicates that there is still a lot to be done. "The most important job that we face in the future is finding a way of making the concept of agricultural multi-functionality sustainable". We can thus "get society to accept a financial transfer to support agricultural sustainability". The ESC's interpretation of multi-functionality is very large; agriculture must: produce a sufficient quantity of foodstuffs that are safe and of good quality (namely, in setting up a "vegetable protein" plan), protecting the environment, stopping the haemorrhage from rural areas, saving jobs, respecting animal welfare, breeding animals without using anti-biotics and hormones, conserving our genetic heritage (bio-diversity, giving due appreciation of the countryside. Objectives to attain include: winning back parts f the internal market, particularly cereals in animal feed; further integration of environmental objectives in CAP regulation; achieving a better balance between the distribution of EAGGF subsidies by taking into account regional needs and farming circumstances (perhaps by introducing "ceilings for direct aid for farms"), developing cross compliance - the link between direct payments and environmental protection provisions; encouraging more extensive farming; specific aid for cultivating fodder and grazing fields; combating the excessive standardisation of products (demanded by the monopolies of large distributors) because this destroys the diversity that previously existed in European agriculture; massive strengthening for supporting "integral development" in rural areas.
In the long term The ESC is calling for the possibility of radically simplifying the Aid system with a single premium for each surface area that practises agricultural multi-functionality, independent of the crop grown and even a basic premium for non-productive or limited or unprofitable land areas (essential for Scandinavian countries, which in my opinion would never have accepted a limit on the length of time for specific aid to their farmers).
It should be emphasised that this policy is not protectionist, as the EU is and will remain the largest importer of agricultural produce: its population is 6% of that of the rest of the world and its imports represent 20% of total world imports (not including internal EU trade). OECD statistics that place the USA at the top of importer countries are ridiculous because they are divided into 15 separate markets, as opposed to the European single market. The EU must reject these statistics that even deny the existence of the Union.
Ferdinando Riccardi