Brdo, 27/05/2008 (Agence Europe) - On Tuesday 27 May in Brdo (near the Slovenian capital of Ljubljana), EU member state agricultural ministers examined common agricultural policy (CAP) health review proposals. The most difficult debates focused on milk quotas and aid modulation. The mainstay of several countries' arguments (France, Spain, Greece, Portugal, Hungary, Czech Republic and Romania) with a few nuanced differences, argued that the European Commission's proposals only partially responded to the new context of food challenges. In November 2007, Iztoc Jarc, the Slovenian minister chairing the informal agriculture ministers meeting stated: “I really get the feeling that the delegations are prepared to make compromises in an effort to obtain an agreement (on the health review) in the given time frame”. , the European commissioner for agriculture, said that she felt “confident” after this first exchange of views from countries on this dossier (proposals date from 20 May) “I have quite a good feeling about it”, she added, speaking of her experience in carrying out difficult reforms (sugar, wine, fruit and vegetables). Among the sensitive points, she cited: - the milk sector: some delegations are still calling for a 1% rise per year on milk quotas, while others consider the project is already too ambitious (“we therefore reached a balance in our proposal”, the commissioner noted); - aid modulation (transfer of direct aid and market spending to rural development): everyone, however, agrees that more money is needed to meet the challenges and that one should “pursue modulation decided in 2003”. The Commission, moreover, suggests marketing standards in particular should be simplified in the fruit and vegetable sector (from 38 to 10 standards), which causes criticism to be expressed by several member states (Italy, Spain, France and Hungary). According to the Italian minister, Luca Zaia, dismantling the system of norms could entail a fall in quality and create import dumping. But member states wish to keep all these norms, Mariann Fischer Boel said in protest. “Why have standards about the size of cucumbers. When one wants to simplify, we can simplify”, the commissioner said.
Michel Barnier, the French minister, who is to take on the presidency of the Agriculture Council as of 1 July, said the work on adjustment and evaluation of the CAP (to make it a “lasting and more balanced policy in the breakdown of aid, as well as more responsible and safer”) comes in an environment of which account should be taken. Depending on whether one reaches a good or bad agreement at the WTO, what happens for the CAP will be “reinforced or overturned or sometimes brought into question” - so one remains extremely vigilant on this question.
Food challenge. There is also this “food challenge”, Mr Barnier pointed out. Several roads are mentioned so that Europe is “in the lead of international solidarity” by supporting “structural actions” in the least developed countries. The French minister defended the idea of making a financial contribution to regional agricultural projects “so that we can export and feed ourselves”. In this context, Ms Fischer Boel spoke again of her proposaal consisting of making available the funds not used in the EU farm budget to finance microcredits in poor countries of the world to allow them to buy fertilisers and seed. What have you done to resolve the high food price crisis? “We have found solutions”, the commissioner maintained. She cited the 2% rise in dairy quotas for the current marketing year (2008/2009) and the elimination of the compulsory rate of set aside (which should allow 12-15 tonnes more cereals to be produced this year). “We must produce more to reduce the tension on the market” (the demand for cereals is far greater than the supply), Michel Barnier commented. When more is produced, the risk of instability is increased, that is why it is necessary to maintain certain instruments for the management of climate and health risks, the French minister said.
“I have doubts about making the CAP responsible for the rise in food prices”, said Iztoc Jarc, for whom the CAP has always been able to respond to adjust demand to supply. “We have carried out structural adjustments in the light of the new situation on the market”, the Slovenian minister said.
Dairy quotas. “The decision to do away with dairy quotas in 2015 was taken in 2003 by the Council. We are therefore not taking a new rabbit out of our hat”, said Mariann Fischer Boel. She went on to specify that the main milk producers in Poland, Ireland, Denmark, the Netherlands and Italy want to be able to gain a foothold in new markets such as India or China. These countries therefore want a rise in quotas above 1% per year. The Austrian minister, Josef Pröllöll, was the only one to defend keeping quotas in place after 2015, or “accompanying measures” to safeguard milk production, with an EU fund to finance it all. France and Germany are among the other countries that expressed reserve about the rise in quotas and their suppression in 2015. The British delegation is in favour of an end to dairy quotas (and the gradual phasing out of market measures).
Modulation. Ministers hostile to the Commission's proposals on compulsory modulation (bring the rate of aid reduction from the current 5% to 13% in 2012) were notably from Greece, Spain, France, Ireland, Luxembourg, Belgium and Hungary. The gradual modulation proposed (reduction in aid for large farms) poses problems for Germany, Romania and also the Czech Republic (36,000 farms affected in this country).
Decoupling. The United Kingdom, Sweden, the Netherlands and Denmark supported the Commission's aim to continue aid decoupling. The keeping of coupled aid (premiums linked to production) in the tobacco sector was requested by the Italian, Greek and Spanish ministers. France called for coupled aid to be continued for “fragile territories”.
During the meeting, Mariann Fischer Boel stressed that “fundamental reform” of the CAP by the end of the current financial period (ending 2013) is “neither necessary nor desirable”. The context of the current higher price level should not be used as a cover to start micro-managing European farm production, she said. Neither is it time to abolish CAP, the commissioner warned. She considers that, in her proposals, account was taken of stakeholders' ideas and concerns. “In that sense, the current proposal can already be considered as a first compromise”, she said, adding that she had already made concessions. (LC.).