Fischler’s mission to change the face of the countryside

Date: 22/05/1997

LAST year's 'mad cow' crisis offered Austria's first European Commissioner Franz Fischler a public profile rarely enjoyed by his predecessors in the agriculture hot seat.

Unfortunately for Fischler, the brief honeymoon seems to be over as the policy battles which will shape the Common Agricultural Policy in the 21st century get under way.

A man used to going his own way, Fischler may find friends a very useful commodity as he battles to persuade sceptical EU governments of the need to upset their farming lobbies by making significant changes to the CAP.

Round one of the battle may have been lost already. Amid much fanfare last November, Fischler unveiled his vision for the future.

The Cork Declaration envisaged a 'rural policy' where financial assistance would not be limited to farmers, but would extend over a whole range of economic activities based in the countryside.

The outright rejection of the idea by Germany and France, among others, was a big enough blow.

But Fischler's plans also fell on deaf ears within the European Commission, apparently dismissed out of hand by both Regional Policy Commissioner Monika Wulf-Mathies and Employment Commissioner Pádraig Flynn at the recent 'cohesion forum' on the future of the EU's structural funds.

Fischler's critics believe a change of style is needed if he is to achieve his ultimate aim of preparing the EU's farm policy for the rigours of the next century.

“Fischler's trouble is that he tries to do everything from above, instead of consulting from the grass roots with those his policies will affect most,” says a Brussels-based farm lobbyist of many years experience.

But there is also the school of thought which believes nothing will be achieved unless somebody takes the bull by the horns and makes suggestions which are certain to prove unpopular with the ultra-conservative farming lobby.

Fischler's favoured technique is to float ideas one by one through his numerous speaking engagements, only electing to pursue them if the cacophony of protest does not grow too deafening.

The trouble is that very little in the way of change is acceptable to Fischler's 'constituents'.

Since the December 1995 Madrid summit, the Commission's preferred option has been clear: 'no' to revolutionary reforms; 'no' to the status quo; and 'yes' to a deepening of the approach pushed through in 1992 by former Farm Commissioner Ray MacSharry.

Since then, efforts to take things any further have been hamstrung by the political need to conclude the review of the Maastricht Treaty and to give Commission President Jacques Santer time to work out how much money the Union will have available to spend on its farmers.

Plans for long-term beef reforms were shelved in favour of a series of 'market situation reports', with full-scale reorganisation options to follow this autumn. “Fischler has been told to keep his mouth shut until well after the Intergovernmental Conference,” said one lobbyist bluntly.

Although intended as a bland description of the state of the EU markets, the overall report and the two sector-specific studies - on beef and milk - which have emerged so far do not require a genius to read between the lines.

The milk industry will come under scrutiny when ministers meet informally this weekend (25-27 May) in the Dutch province of Zeeland.

Unless things change, argues Fischler, the EU could face a return to the bad old days of grain, beef and butter mountains. His hope is that the threat of 60 million tonnes of excess cereals, 1.5 million tonnes of unsellable beef and hefty subsidy payments for the disposal of unwanted milk will make the opponents of reform accept that there is no alternative.

His arguments have been given added credence by outside studies, not least by the Organisation for Economic Cooperation and Development (OECD).

In its annual report on world commodity trade, the OECD issued a thinly veiled warning to the Union that its policies would lead it to lose out on a growing global market.

“This is the price EU farmers have to pay for support that continues to keep domestic prices for many products above those on world markets,” it warned.

Valid arguments are one thing, but EU governments are quite another. Although finance ministers are increasingly seeking to rein in farm spending, their agricultural colleagues are sticking resolutely to the siege mentality of the past.

With the exception of the UK and Sweden, and to a lesser extent Denmark, most ministers give short shrift to anything which smacks of weakening the web of supports erected for the Union's farmers.

Perhaps the clearest recent example of this is the Commission's so-far wholly unsuccessful attempt to cut compensation payments to grain farmers introduced under the 1992 CAP reform.

Fischler claimed that cereals producers had not suffered the price decreases foreseen at the time of the reform, and could quite easily live with reduced aid payments, particularly given the pressing need to free-up money to pay for the beef market collapse.

Ministers disagreed and were able to fall back on the Commission's commonly used trick of suddenly finding a spare 1 billion ecu kicking around in the farm budget.

But Fischler has not given up. The planned aid cuts remain on the table, and he hopes to be able to use a recent report by the UK agriculture ministry as ammunition in his campaign of attrition against the Agriculture Council.

The paper alleges payment of 'over-compensation' totalling between 14 and 17 billion ecu in the four years between 1993 and 1997.

The scale of the mountain Fischler has to climb was highlighted again earlier this year, when - facing an apparent funding crisis - he sought to make marginal cuts in guaranteed farm prices, the safety net underpinning Europe's farmers.

His plans did not even get past his Commission colleagues. Again, 1 billion ecu was mysteriously dug up. For once, the EU had the US to thank for something, when favourable movements in the dollar were said to have reduced the projected cost of CAP spending.

Considering that the ultimate aim of the approach accepted in Madrid was to bring EU prices closer to world market levels, the rejection of even minor changes in a crisis situation did not bode well for the future.

Next month's meeting of farm ministers could be Fischler's last opportunity to force through his proposed arable aid cuts, at least until a major reform package has been cobbled together some time after the completion of the Intergovernmental Conference.

It is then that his problems will really begin. The Commissioner appears to feel his main priorities are changes in the beef and cereals sectors, while there is a growing impression that he is backing away from revamping the milk market, fearing that starting a debate on quotas will open up a can of worms he will not be able to close.

In the face of the expected barrage of protest, Fischler will have to propose tough measures and hope to muscle through a compromise which goes at least some way towards aligning Europe's protected markets with the rest of the world.

In spite of the Cork débâcle, Fischler still clings to his hopes for a broader rural policy. He will try to persuade the doubters that this will not steal support from farmers and is the only way to filter money into the countryside in an era when taxpayers are no longer prepared

to give large sums of money directly to farmers. But he may need to adapt his style and sweet-talk those who continue to resist the realities of agricultural markets in the late 20th century.

The US has stolen a march on the Union with its deregulatory 'freedom to farm act', and threatens to wipe the floor with the EU at the next world trade round.

Enlargement simply cannot go ahead in the current circumstances. Increasingly, EU governments and the more confident European Parliament are unwilling to pay for farm subsidies. Fischler has the arguments on his side. He now needs the guile to make them stick.