Over four centuries ago, Michel Montaigne wrote: " In my time I have seen a hundred artisans and plowmen wiser and happier than rectors of universities". According to the Montaigne Institute, he wouldn't be able to write that these days, because the world of agriculture in Europe is experiencing a crisis of identity, which has been caused by certain aspects of the common agricultural policy, and it doubts its own future. The study "Ambition for agriculture, freedom for farmers" (our translation), which was written for this Institute by a working group with Joachim Bitterlich as its president and Amélie Castera as its rapporteur, goes further than to make a diagnosis (see this column yesterday); it also suggests a few remedies. It is not the only one to suggest reforms. The former European Commissioner Edgar Pisani had already anticipated the move in favour of agricultural prices, corresponding more to the reality of costs, and the reaffirmation of the "Community preference" in agriculture has resurfaced, at least in France. I chose the Montaigne Institute's study due to the new ideas it brings to the table, for the clarity of its presentation and because it provides an effective summary of the multitude of visions which have already appeared. I cannot say everything I would like in my summary of the summary; anybody who wants to know more can get hold of a copy of the short volume edited by the Institute itself (at a cost of just €10). I have drawn a few fundamental conclusions from it, which represent an indivisible whole; they are only of any value if all elements are brought together, and particularly if the external plank is implemented at the same time as the internal one, and with the same efficiency. Here, then, is the main overview.
1. Keeping in place a certain level of price guarantee. The full liberalisation of the markets, which is often called for, "would be a mistake: there are solid economic justifications for lower-priced limits", which are related to market failings and exchange rate instabilities. This guarantee allows the average prices for consumption to be brought down compared to a situation of total price fluctuation, given that the system should not guarantee prices to farmers which are in every case higher than world prices.
2. Simplifying and rationalising current mechanisms for aid and subsidies. Today, red tape weighs too heavily, with national controls (some of which are very nit-picking) duplicating the work of European controls. The restrictions are excessive and provide a disincentive to enterprise. The spirit of initiative must once again be awoken among farmers. The value of "non-commercial" functions (preservation of the environment, protection of biodiversity, maintenance of the countryside, safeguarding the territorial equilibrium, etc) must be clarified, for instance using a "points" system, with the holders of enough points being entitled to state aid on a sliding scale. The study refers to mechanisms of this kind which have been applied in the German Land of Baden-Württemberg. It's not a question of rewarding farmers for simply respecting environmental legislation, but of payingfor a genuine service with real added value. Total aid would, therefore, be a simple fixed plank, depending upon respect for good agricultural practice, and "points" to reward the provision of specific services. Symmetrically, practices which are harmful to the environment would be hit by stricter penalties, including criminal sanctions.
3. Redressing the "balance of power" between the farmers on the one hand, and the distribution and processing industries on the other. Here, legislative action is essential.
4. Helping to conquer new outlets. These outlets no longer represent the illusions of visionaries, they are now realities which are opening up "genuine prospects of economic development (to agriculture), whilst contributing towards the preservation of the environment and natural resources", particularly (but not exclusively) in the field of bio-fuel. Taxation and research have an essential role to play in this field, involving both the national and the European authorities.
5. Fulfilling the conditions for fairer international competition. The EU needs to confirm its willingness to phase out aid to export, as long as the WTO takes a commitment at the same time to the harmonisation of social and environmental standards and a fair division of effort in favour of the least developed countries. The EU must ensure that the American "marketing loan" is removed or, by default, adopt this mechanism itself. The Montaigne Institute feels that the EU should also renegotiate the Blair House agreement with the United States, in order to regain its freedom in the production of oleaginous fruits, by giving its farmers back the option of choosing their production freely.
What is the fatal flaw of these orientations? That the British will never agree to them. So, what next? I will explore a few elements in answer to this next week. (F.R.)