If the CAP fits, the EU will grow

Michel Barnier, the French farm minister, thinks the Common Agricultural Policy can help make the EU more competitive. Simon Taylor reports.

When France takes over the presidency of the EU in the second half of 2008, Michel Barnier, the farm minister, will be steering a major review of EU farm policy as well as launching a debate on the future and the financing of the Common Agricultural Policy (CAP) after 2013. Barnier, who was European commissioner for regional policy from 1999 to March 2004 when he became France’s foreign minister, says that the CAP is a "strategic asset" which should be defended, rather than scaled back.

"Agricultural production allows us to export, to create jobs," he says. There is a widespread view that the €40 billion that the EU spends on supporting farmers should be switched to programmes to boost growth and jobs under the EU’s Lisbon Strategy for competitiveness, but Barnier says: "We need [the CAP] to make Lisbon a success."

The French farm minister is not convinced that traditional market-support mechanisms of the CAP should be cut back even though strong global demand for food products is driving prices to record levels.

Current high prices may not last, he warns. "We have to pay attention to the volatility of prices…Who can say that prices won’t go down if Oceania starts producing massively?" Mechanisms like set-aside, which pays farmers not to cultivate arable land, should be kept so that they can be reactivated if needed, he says.

He links the ability to maintain production incentives to the need for stricter import controls to keep out unsafe products. Listing the outbreaks of global diseases within the EU like avian flu and chikungunya in Italy, Barnier says that the EU should not drop its guard against importing animal diseases and should resist attempts to ease controls.

"Food imports come into Europe about which we are uncertain. We will reinforce these controls and make sure they respect the same standards as European foodstuffs," he says. He defends the approach, denying that it is hidden protectionism and saying that the US shares a concern about the risks of fully liberalised trade. "We have to protect ourselves. It’s not protectionism. I’m concerned by a very liberal ideology which is even contested in Washington, as you can see during the presidential campaign, which says let’s open all the door and windows," he says.

"Food is not televisions or cars," Barnier adds. Referring to the effects that strong demand from countries like China and India has had on cereal prices and on animal production, Barnier says: "You can’t leave all that to the laws of the market."

He points out that one "weakness" of the Commission’s communication on farm reform, or the farm health check, presented last year, "is the absence of a proposal on crisis management".

He calls for more protection for farmers through new insurance schemes and a fund to help farmers hit by outbreaks of animal diseases.

Barnier is also opposed to the Commission’s wish to switch funding from market-related support and direct aids (Pillar I of the CAP) to rural development (Pillar II). "Agricultural policy is not rural development policy, it’s an economic and food policy," he says. He admits that part of his opposition stems from the fact that measures under Pillar II have to be part-financed by national finance ministries whereas Pillar I measures are entirely paid for out of the EU budget.

Barnier says that at a time of high prices for some products he is open to a redistribution of aid towards those sectors that are not faring so well, such as sheep and dairy farmers, and fruit and vegetable growers. "Otherwise farmers could change production and grow cereals but we still need meat and milk," Barnier says.

Like French President Nicolas Sarkozy, Barnier often refers to the importance of "community preference", ie, favouring domestic EU products over imports. But he rejects suggestions that this strikes many in the EU as nostalgia for a bygone era of the CAP when the aim was to ensure self-sufficiency. "European preference is not an insult," Barnier says.

"We are opening a debate on the future of the CAP without nostalgia," he says.

Barnier stresses that member states must conclude their reflection on the future of the CAP before they decide the EU budget post-2013, in talks likely to start under the French presidency in the second half of the year.

Michel Barnier, the French farm minister, thinks the Common Agricultural Policy can help make the EU more competitive. Simon Taylor reports.