Farm policy at crossroads

Date: 12/09/1996

By Michael Mann

AGRICULTURE Commissioner Franz Fischler is coming under increasing pressure to give a clear direction to future EU farm policy.

The growing clamour for the Commissioner to put flesh on the bones of the strategy paper he presented to the Madrid summit last December comes as officials consider a new report by leading agricultural economists which rejects both the status quo and radical reform, suggesting instead a deepening of the approach adopted in the 1992 'MacSharry reforms'.

At the same time, a think-tank within Directorate-General VI (agriculture) has put together separate papers examining the problems facing each individual farm sector and suggesting possible solutions.

All this is quite distinct from preparatory work ahead of the much-vaunted conference on the future of rural policy to be held in the Irish city of Cork on 7-9 November.

Fischler clearly faces a dilemma in deciding how to flag up his plans for a policy everyone accepts has to be reformed if the Union is to face the triple challenge of eastward enlargement, the next round of world trade talks and liberalisation by its main competitor, the US.

But so far, the Commissioner has proved adept at introducing potentially controversial ideas into the debate with the minimum of uproar, in what is a highly emotive sector.

“Most people believe that Fischler wants to change things seriously, but he is a master of feeding his public incrementally. What no one knows is whether Cork will just see another step or Fischler presenting his grand plan,” said one lobbyist.

Uncertainty remains over whether reform should come, as it did last time, in a single package of measures, or be carried out on a sector-by-sector basis.

To a certain extent, the latter approach has already been forced upon the Commission by the BSE crisis, which has led it to propose changes to the beef sector and cuts in aid payments to arable farmers. Reforms to the dairy quota system are also in the pipeline.

One idea which seems certain to make a reappearance is that of 'modulation', limiting the amount of financial support an individual farmer can receive.

Originally proposed by former Agriculture Commissioner Ray MacSharry, modulation for cereal farmers was left out of the reform package following British resistance.

Pointing to his original proposals, MacSharry said this week: “There should never be over-compensation ... I do not see the need for a major reform of the reform. The mechanisms are there and are sufficient to adjust the market whenever necessary.”

Fischler has consistently stressed the idea of moving away from a simple farmer-related CAP based on support on a product-by-product basis to a “integrated rural policy”. It is not clear, however, how far he will go in developing these ideas in Cork.

While sympathetic to the idea in principle, policy experts are still uncertain what form such integration would take.

Many have pointed to an extension of the concept contained in the 'agri-environmental' schemes included in the CAP reform, under which farmers receive payments for fulfilling set environmental objectives - an idea known as 'cross-compliance'.

Latterly, however, the Commission has become noticeably cooler towards the idea, believing it to be administratively cumbersome and difficult in practical terms.

“If the aim is to reduce internal prices and the CAP element of rural policy to a minimum, what do you cross-comply with? If farmers are not going to get payments, how can you demand things of them?” asks one expert.

Whatever the decision, the Commission must ensure that future aid to farmers is presented in a politically palatable manner.