Brussels, 15/07/2008 (Agence Europe) - The French Presidency is planning to submit a compromise to the EU Council of Ministers in December 2008 on the common agricultural policy (CAP) “healthcheck” but this will be a tall order. At a meeting in Brussels on Tuesday 15 July 2008, many EU member state fishing ministers criticised the initial proposals of EU Agriculture Commissioner Mariann Fischer Boel to increase the modulation of direct aid (reducing premiums and spending, and using the savings to fund rural development programmes) and the gradual scrapping of most market management mechanisms (intervention, private storage, etc). The Commission's soft landing approach to dairy quotas is expected to win the day as long as changes are made to regions that do not want to abandon dairy farming.
At their previous meeting on 23-24 June 2008, the ministers discussed two other important areas of the “healthcheck”, namely continuing the process of decoupling aid and measures that can be funded under the new Article 68 (see EUROPE 9689).
Modulation. Currently, all farmers receiving more than €5,000 in direct aid have their payments reduced by 5% and the money is transferred into the Rural Development budget. The Commission proposes to increase this rate to 13% by 2012. Additional cuts would be made for bigger farms, known as “gradual modulation” (an extra 3% for farms receiving more than €100,000 a year, 6% for those receiving more than €200,000 and 9% for those receiving more than €300,000). The funding obtained this way could be used by member states to reinforce programmes in the fields of climate change, renewable energy, water management and biodiversity.
Only the farm ministers of the UK, Sweden, Denmark, Malta and Estonia backed the European Commission's modulation plans. All others opposed it for a variety of reasons. Keeping a strong first pillar in the CAP (direct aid and market spending) was demanded by several ministers (Italy, France, Spain, Belgium, Luxembourg, the Netherlands, Bulgaria and Romania). Several delegations (Germany, the UK, the Czech Republic and Romania) criticised the idea of gradual modulation which would penalise large-scale farms.
Market management. Most member states oppose the Commission's ideas on scrapping most market management mechanisms. The Spanish and Italian ministers and others called for intervention to be retained for rice and durum wheat (the Commission wants to scrap this from 1 September 2009 onwards). A dozen delegations oppose the idea of introducing an adjudication mechanism to set the intervention price and amounts for common wheat. Jaime Silva, Portugal's agriculture minister, called for limited, temporary intervention tools to be retained to respond to market needs. Keeping the current private storage system for some types of cheese was demanded by several ministers, particularly the Italian and Romanian ministers.
Among countries favouring a phasing out of market management tools are the United Kingdom (quotas, intervention and storage systems have to be dismantled, said Jonathan Shaw, British parliamentary secretary); Estonia (which even called for an end to intervention for common wheat), Germany (which backs abolition of intervention for rice, durum wheat and pork) and the Netherlands (which wants to keep aid for the private storage of butter, however).
Dairy quotas. Nobody challenges the political reality any more, explained Luxembourg's agriculture minister, Fernand Boden, talking about the end of dairy quotas in the 2014/2015 marketing year. Countries, however, are divided over the measures to be taken before then. The Commission is suggesting a 1% a year rise in dairy quotas from 2009 to 2013 before they are scrapped in 2014/2015, along with accompanying measures for farmers in less advanced areas. Most countries back this approach, with nuances. The United Kingdom wants dairy quotas to rise by 2% a year until quotas are scrapped. Branka Tome, Slovenian Secretary of State for Agriculture, suggested that along with accompanying measures for less advanced areas, there should be EU co-funding for milk transport costs. Many delegations (including Portugal, Germany, Finland, Poland and Austria) called for sufficient instruments and resources for vulnerable production zones. Luxembourg called for a fall in the super-levy (fines for overshooting quotas), a compensation mechanism for deliveries and changing corrections to fat levels. Belgium recommended a reduction in the co-efficient used to calculate the fat correction mechanism and Latvia called for a scrapping of the super-levy. Some countries (France, Germany and Austria) called on the Commission to be cautious about a 1% rise in quotas. Others, however, want a much greater rise. Latvia recommends a 5% rise until quotas are scrapped, and Gerda Verburg, the Dutch agriculture minister, suggested at least a 2% to 3% rise each year to enable dairy producing countries to keep up with demand (otherwise shares of the market would be taken by Australia and New Zealand). The Italian agriculture minister, Luca Zaia, has serious problems because Italy's dairy quota only covers 58% of its milk requirements. He said he wanted more quotas immediately.
Cross-compliance. Virtually all the ministers felt that the Commission had not simplified the aid cross-compliance rules enough (aid payments being determined by meeting environment, animal welfare and food quality requirements). Above all, they criticise the addition of new requirements (some already covered by certain EU directives) to improve water management and preserve the environmental advantages of set-aside. (L.C./transl.fl)