Fischler sets timetable for CAP reforms

Date: 30/01/1997

By Michael Mann

THE battle to prepare the Common Agricultural Policy for the challenges of the next century is becoming increasingly complex and multi-layered.

Smarting from his failure to gain EU governments' backing for his Cork Declaration on future 'rural policy', Agriculture Commissioner Franz Fischler is now preparing a three-pronged approach.

This will eventually tie together reforms of the major commodity sectors with his pet concept of an all-embracing rural policy and a follow-up to the White Paper presented to the December 1995 Madrid summit.

Fischler's experts are now preparing background studies on the key beef, milk and cereals markets, which could be released as early as March. These will be followed shortly afterwards by an analysis of the likely future problems in each sector.

But a single policy paper setting out options for reform will not see the light of day until the autumn. This will appear either as a complement to, or an integral part of, the 'Santer I' financing package for the first five years of the next century.

Even before joining battle with EU agriculture ministers to defend whatever reform ideas he puts forward, Fischler will have to wage a tough fight within the European Commission to convince his colleagues of the need to keep agriculture's share of the budget near to current levels.

But he will face competition for scarce resources from other Commissioners at a time when farm spending is already under pressure following the decision by finance ministers to peg 1997 spending at 1996 levels.

The rationale behind further reform, however, goes beyond simple financial arguments.

The Commission has its eyes on the subsidy limits imposed under the Uruguay Round world trade deal, which are now biting increasingly deeply. Changes must also prepare the EU for inevitably tighter restrictions resulting from the next round, beginning in 1999.

Finally, the Union faces the headache of how to adjust its policies to take in up to ten applicant countries from central and eastern Europe.

Fischler has been particularly upset by the Franco-German resistance to his rural blueprint drawn up in Cork. The two member states around which farm policy revolves fear that moves away from direct farmer support towards general support for a range of rural industries would reduce the amount of money received by their agricultural industries.

Privately, senior Commission officials think they have missed the point. Certain farm supports - with no effect on production and so-called 'green box' payments in EU jargon - will remain exempt from attack in the next trade round. The direct compensation payments introduced in 1992 - 'blue box' payments - will not.

“The rural policy idea is a way to hold on to the money and get it into country areas under green box measures, making it safe from future attack. Only in that way can we justify keeping an increasing amount of money - and not just to prop up food mountains,” said an official.

Fischler's ideal scenario seems to involve all rural payments coming out of a single 'rural fund'.

As a long-term goal, he believes farmers should receive aid on a per hectare basis rather than linked to how many animals they keep or how many tonnes of a commodity they produce.

Ideally, such payments should be pegged at an upper limit per farm and be based upon the fulfilment of certain environmental or social obligations. Even advisers to the German farm ministry - the most conservative of institutions - have suggested a single cheque paid per hectare, independent of which commodity a farmer produces.

But a Commission official admitted: “Such a thing is simple to imagine, but would be impossible to get through Council.”

In the meantime, Fischler must scramble through measures to save the beef sector from the impact of the BSE crisis and to modify milk quota arrangements which expire in 2000. He must also curb spending on cereals, which currently accounts for 16 billion ecu of the EU budget.

As to longer-term policies, the pressure for radical change may simply not be strong enough yet. “Fischler is moving too early,” said one analyst.