CAP reform: ‘decision time’ for Member States, June 2003

Ministers at the Agriculture and Fisheries Council in Luxembourg on 11-12 June will be trying to reach agreement on reforming the Common Agricultural Policy. CAP reform is the main agenda item and a deal must be reached; the meeting could be extended for another day or even longer in order for negotiations to be completed.

The meeting will be chaired by the Greek Minister for Agriculture, Georgios Drys, who will be presenting compromise proposals based on discussions since the European Commission issued its midterm review of the CAP in July 2002.

Although progress is reported to have been made on some issues, the Greek Presidency has stated that 'the thorniest political issues (decoupling modulation, degressivity, and reform of the cereals and milk sector) still remain to be solved at ministerial level.'

The Commissioner responsible for agriculture, Franz Fischler has said it 'decision time' for the EU:

'Our agricultural policy needs reform, and we need it now. We do not want reform for reform's sake. It is not an end in itself. What we want is a long-term, modern and sustainable aid policy, in the interests of farmers, consumers and taxpayers alike.'

The compromise proposals 'face derailment by an informal deal reached between France and Germany' says the Financial Times:

'France, the largest beneficiary of the CAP, is keen to preserve the privileges of its farming community and has long been the most vocal opponent of the Commission reform package, tabled almost a year ago.

Germany is the biggest contributor to the CAP. If it backed the French, it would be extremely difficult for the Commission and the pro-reform countries to pull off a deal without diluting the plans severely.'

However the FT also reported that 'French officials have been giving tantalising signals recently of being ready to adopt a more flexible attitude'.

The BBC added Spain - one of the 'main beneficiaries of the current system' - to the countries likely to oppose reforms.

The main elements of the CAP reform proposals are:

• cutting the link between production and direct payments (decoupling)

• linking those payments to environmental, food safety, animal welfare, health and occupational safety standards (cross-compliance)

• increasing EU support for rural development by a modulation of direct payments (from which small farmers would be exempted)

• introducing a new farm advisory system

• covering the costs of the farm advisory system and boosting quality production, food safety and animal welfare through new rural development measures

• revising the market policy of the CAP, including arable crops, milk and rice

The debate in the EU comes just months before agriculture is discussed again by the World Trade Organisation. The September meeting of the WTO in Cancún, Mexico, will try to reach agreement on the Doha Round of world trade talks. Ministers are thus under pressure to reach an agreement which will be acceptable to the WTO; otherwise any internal EU deal might have to be re-worked to meet WTO demands.

Even though a deal must be reached, it might not meet the Commission's objectives. According to the BBC:

'The nightmare scenario ... is a fudged compromise which could emerge in this week's talks, leaving some production subsidies in place while still creating the new farm payments.

If this happens, farmers could face an even more complex system, the EU would still be in trouble with the rest of the world, and environmental groups would accuse ministers of missing the opportunity for genuine reform.'

Links:

Greek Presidency of the EU:
	Agriculture and Fisheries Council, Luxembourg, 11-12 June 2003
European Commission:
	10.06.03:	Fischler on farm reform: no lame compromises [IP/03/814]
	10.06.03:	Preparation Agriculture/Fisheries Council of June 2003 [MEMO/03/127]
	10.06.03:	The Commission's CAP reform proposals: Questions and Answers MEMO/03/128
BBC News Online:
	11.06.03:	Crucial talks on EU farm reforms
	11.06.03:	Q&A: EU farm reform
	10.06.03:	EU faces farming reform challenge
European Sources Online: In Focus
	23.11.01:	World Trade Organisation Fourth Ministerial Conference, Doha, Qatar, 9-13 November 2001
	12.07.02:	2002 Mid Term Review of the Common Agricultural Policy, July 2002
	28.01.03:	Reform of the Common Agricultural Policy: New proposals following opposition to Mid-Term Review, January 2003

Eric Davies
Researcher
Compiled: Thursday, 12 June 2003

Negotiations on the reform of the Common Agricultural Policy got underway at the Agriculture and Fisheries Council in Luxembourg on 11-12 June 2003. Keywords: Reform of the CAP