Brussels, 26/07/2002 (Agence Europe) - EU Member State representatives met at the beginning of the week for the Special Agriculture Committee (SAC) for an initial examination of the mid-term amendment proposals for the Common Agricultural Policy (CAP). Several delegations, Spain and Italy (with certain subtle differences), Austria, Finland and Greece have denounced the harmful effects that the decoupling of direct aid could have in the beef sector, such as stimulating rather than putting a brake on intensive production. France, Ireland and Belgium have again, just as they did in the Council public debate, judged it unacceptable that the Commission has proposed a decoupling system without having a mandate from Heads of State and Governments. In the other direction, Sweden, Germany, the United Kingdom, Netherlands and Denmark considered the sectoral proposals rather good, as well as the direct aid philosophy as expressed by the European Commission. Here is a summary of the discussions on the different sectors examined by the Commission during this updating exercise (EUROPE will return to the reactions on the general strategy on the simplification of the direct aid system and the rural development programme).
Decoupling of aid in the beef sector: the French delegation with the support of the Italians (who are suggesting a kind of decoupling linked to production, EUROPE 17 July p 9) and Spain, mounted strong opposition to the incoherence of the decoupling proposals. According to the French delegation, the different food related crises have demonstrated that current instruments have worked rather well. Austria suggested that the Commission comes up with a rise in the bonuses for extensification rather than a decoupling. This view is also shared by Ireland, which said that it would have preferred to fine-tune current market instruments rather than get rid of them. The Austrian delegation drew attention to the risks for farmers of becoming dependent on aid and requested the Commission to explain how it intended to calculate the traditional rights that determined how the amount of aid would be calculated according to income per farm. Spain was worried by the logic that would result in this common market organisation disappearing rather than it being improved. The Greek delegation spoke of the proposal being unsound, whilst Portugal outlined the risks of over-production. Sweden was positive but the proposals in the sense of the greater market orientated production. According to this delegation, which was followed by Germany, decoupling would definitely have the effect sought by the Commission (putting a brake on the trend to intensive production and re-establishing balance on the markets). The Netherlands, Germany and United Kingdom (which believe that intervention instruments in the beef sector are outmoded) especially welcomed the aim to simplify the system by getting rid of aid per head of cattle.
Finland also considered that decoupling could result in confirming aid granted to grain production, which it considered unfair (it would mean getting stuck with what already exists, the delegation claimed). Ireland was of the opinion that decoupling would result in a fall in production and income.
The proposed strengthening of inspections, determining the granting of live animal export subsidies was well received by the British delegation, while the Netherlands, Germany, Sweden and Austria wanted an end to these refunds.
Grain and oilseed: France, Spain, Luxembourg and Austria were opposed to the 5% drop in grain intervention prices, contrary to Germany, Netherlands and Sweden (who wanted a greater reduction) and Denmark which accepts it. Italy and Spain indicated that they had experienced a reduction in land given over to cultivation of oil seed and they therefore did not see why the Commission did not propose appropriate measures for these crops. Austria also joined in the protests of these countries, whereas the Netherlands, Sweden and Germany supported the Commission. In accordance with Agenda 2000, prices have gradually been aligned with those of grain (at the same time that the specific aid system was disappearing).
Rye: Finland thought that production in this connection was causing it problems as it had a damaging effect on quality production (especially in making bread). Austria declared that it would be better to encourage quality production especially in the regions which could not produce anything else. Spain considered that getting rid of intervention prices was no a good decision. Germany indicated that it was necessary to find a permanent solution for improved sales of this product and also suggested the introduction of compensatory aid (which is what was proposed for durum wheat).
Durum wheat: Greece called on the Commission to revise its calculations that Greece considered it had made for a 1997 report and 1999-assessment study. Italy and Spain requested the Commission to back their figures up because there had been excessive compensation for durum wheat producers (as the Court of Auditors indicated).
Austria believes the Commission's strategy for durum wheat is justified and understandable. Portugal would have preferred research into potential "relocation" of durum wheat farming as a result of the proposals, while France simply said that the "contractualisation" (the special subsidy sold to industry as part of a contract setting qualification criteria) was the appropriate way forward. The UK supported the Commission's proposal.
Rice. Greece, Italy, Spain and Portugal made it clear to the Commission that they were not at all happy with the proposals. Spain called for greater compensation for the 50% rice intervention price cut; Portugal suggested introducing a transition period for the reform which was felt to be too drastic; while France asked the Commission whether it had assessed the impact of the measures on the ultra-peripheral areas of the EU (on French Guyana in particular). Germany wanted stricter measures taking account of an increase in intervention stocks around 2009/2010 because of the Everything But Arms initiative. The UK approved of the Commission's plans to introduce greater liberalisation, but found it difficult to understand why aid still existed for rice production.
Nuts. Spanish, Greek, Portuguese and Italian experts protested about the proposed annual set-rate payment of EUR 100 per hectare, expressing strong reservations about the introduction of co-funding which they see as creating a dangerous precedent. Italy and Portugal asked how the 800,000 hectare guaranteed maximum surface area eligible for aid would be shared out. Belgium and France were concerned about the proposed measures which they saw as falling between the two CAP pillars (the market and rural development). Sweden and Germany expressed surprise at the Commission's desire to continue supporting nut production, since Fischler seemed determined not to concede anything.