European Commission split over biofuels

The European Commission is experiencing a bitter three-way split over biofuels policy, with no real sign of who will prevail. Chief among the biofuels boosters is DG Energy & Transport, which sees a rapid expansion of biofuel production and consumption as a core part of meeting high-level commitments to green energy and reducing dependency on fossil fuel imports from unstable regions like the Middle East or unreliable countries like Russia. DG Energy is in a bitter disagreement with DG Environment on the question of whether biofuels are part of the solution to climate change or part of the problem.

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Productionists unite under food security banner

A number of producer interests would like to revive food security as a major driver of agricultural policy. Organisations like the Commercial Farmers Group (CFG) in the UK, a small grouping of leading producers, argue that new threats are present in the form of population growth, pandemic diseases, climate change, terrorist actions and increased demand for renewable fuels. They want to change the balance between the environmental and food safety concerns that have been driving agricultural policy in recent years and return to more traditional productionist priorities.

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UK data on distribution of farm payments

The UK Department for Environment, Food and Rural Affairs (DEFRA) Agricultural Change and Environment Observatory recently published a statistical analysis of the breakdown of the Single Farm Payment (SFP) in England, one of the four regions for the purposes of administering the SFP scheme in the UK. The report analyses 2005 payments, with some historical comparison with the distibution of payments in previous years. One of the findings is that average payment rates per hectare are related more to farm type than to farm size. Apart from the very smallest farm size group (holdings with between 0 and 0.5 Standard Labour Requirements), the average payment per hectare for all remaining farm sizes varies minimally between £187 and £197/hectare.

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Sad news

secondoIt is with great sadness that I report to readers of CAP Health Check the sudden and unexpected death of Secondo Tarditi, one of the agricultural policy experts contributing their thoughts to this blog. A fuller appreciation of Secondo’s life and his contribution to European agricultural economics will follow. In the mean time we express our sadness and extend our sympathies to Secondo’s family and friends who are mourning the loss of a talented, vivacious and charming man.

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CAP policy instruments and policy goals: cause or effect?

Fellow blogger Wyn Grant presented a paper in Paris last month which presents a wide-ranging overview of the changes in CAP policy instruments since its inception to the present day. His basic thesis is that over time the instruments have changed much more than the objectives and that this does reflect a shift in the content of the CAP and its ultimate goals. He concludes that it is changes in CAP policy which have led to changes in policy instruments, although he does cite some examples where the introduction of new instruments, possibly by creating obvious anomalies, can spark off wider policy debates (trading SFP entitlements, voluntary modulation).

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UK Conservatives endorse the CAP

John Gummer MP, the former UK Agriculture Minister who is currently advising Conservative Party leader David Cameron on farm policy, has taken a swipe those in his party who call for a repatriation of the EU’s common agricultural policy:

“There is no doubt at all that unless we get a kind of common deal in the EU farmers will get no money at all. No British government of any kind is prepared to foot the bill. Anybody who dares to talk about repatriation doesn’t care about farming because you won’t have it.”

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Are biofuels to blame for agflation?

The UK’s consumer prices index showed annual food price inflation of 6 per cent in April, the highest level in almost six years and well ahead of overall inflation of 2.8 per cent. In the US, prices have risen by 6.7 per cent, seasonally adjusted, since the beginning of the year, compared to 2.1 per cent for all of 2006. There are some proximate factors driving food prices. Florida promises the smallest orange crop in 17 years. Swine fever in China has pushed up local pork prices. Coffee prices have been pushed up by adverse weather affecting production in Vietnam and Brazil, the two largest producers.

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