Brussels, 02/03/2005 (Agence Europe) - As per its undertaking at the reform of the Common Agriculture Policy (CAP) in June 2003, the European Commission is to adopt a communication on 9 March on “risk and crisis management in agriculture”. According to the services of Mariann Fischer Boel, the Commission is to present three options erring on the side of caution: co-financing of insurance premiums, support for creation of mutual savings banks and national aid to compensate for losses in revenue. In any case, the provisions decided on must be compatible with the WTO “green box”, the Commission warns in the document.
The Commission is opposed to the idea of extending a “safety net” clause to all common market organisations (CMOs) like the one in place for crisis management in the beef meat sector since 1974. According to the Commission, safety net provisions exist in several sectors covered by the reform of the CAP of June 2003 and there is no reason to bring in this kind of mechanism to other sectors, such as that of fruits and vegetables, wine, pork and poultry. Furthermore, the new payment system, which is decoupled from production, helps to guarantee stable income levels for farmers, the Commission believes.
The Commission also raised the possibility of a Member State being able to put a percentage point of “modulation of agricultural aid” towards risk and crisis management. Modulation was brought in with the reform of June 2003 (transfer of 3%, 4% and 5% respectively of direct aid to rural development in 2005, 2006 then 2007 to 2012). Whilst not ruling out this possibility, it reiterates the principle of the annuity of the funds in question (the Member States are not allowed to hold funds over to subsequent years) and the obligations to respect the criteria of the WTO's “green box” for all additional measures under the rural development heading.
Three new options to explore
The document calls on the other Community institutions to debate three new options:
natural disaster insurance: the idea would consist of the EU and the Member State paying a maximum of 50% (under the heading of rural development) of the insurance premium held by the producer to cover against natural disasters, extreme climatic conditions or epidemics. To qualify, regimes must respect Community rules on national agricultural aid and the requirements of the WTO “green box”.
the creation of mutual savings banks: The Community could look into granting “temporary and degressive” community support for the development of mutual savings banks to face up to losses of revenue in times of crisis;
the possibility of granting certain national aid: the Commission also plans to authorise certain national aid, but under very specific conditions. For example, liquidity help may be possible for farmers if their income derived from agriculture in a specific year is less than 70% of the average over the previous three years.
When the CAP was reformed in June 2003, the Agriculture Council obtained the Commission's commitment “to look into specific measures to help face risks, crises and national disasters in agriculture”. The Commission was called upon to “present a report to the Council, by the end of 2004, along with appropriate proposals”. The Commission's declaration also indicated two specific issues to be examined: the funding of these measures by using a percentage point of the modulation directly redistributed to the Member States and including, in each CMO, an article allowing the Commission to act in case of Community-level crisis, according to the lines established for such situation in the CMO for bovine meat. In December 2003, the Agriculture Council adopted extremely cautious conclusions on risk management (EUROPE of 18 December 2003).