Heads you win, tails I lose

Wyn Grant, Professor at Warwick University and an expert on the CAP, blogs on the subject over at commonagpolicy.blogspot.com. In a blog post this week on ‘The subsidies dilemma’, he notes:

I was recently talking to a journalist from an esteemed weekly who has written on the CAP. He commented that when prices were low, the French (as the main defenders of the CAP) said that subsidies were needed to boost farm incomes. When prices were high or volatile, they were needed to ensure food security. He once asked a French minister if there were then any conceivable market circumstances in which an argument could not be produced in favour of subsidies.

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Doha round agreement would leave EU farm subsidies untouched

According to the EU’s recent notification of farm subsidies to the WTO for the marketing year 2007/08, the EU’s trade distorting farm subsidies fell to a record low of 12.3 billion euros.

As the ICTSD reports,

“For the first time ever, the recent figures would put the EU’s overall trade-distorting support below the proposed new ceiling of 22 billion euros that would be established by a Doha Round accord under the terms currently being considered at the WTO. The Doha deal would create a new subsidy cap that limits the total amount of amber, blue and de minimis support that countries are allowed to provide.”

In other words, on the basis of the notification for 2007/08 (the most up to date that the EU has made), a Doha deal would not require the EU to change any of its farm subsidy policies.

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Ciolos hearing at the House of Commons

On 13 January, Dacian Ciolos gave testimony to the UK Environment, Food and Rural Affairs Committee on CAP reform.

Emphasis on international competition as a justification for income support

I don’t see how our agriculture can, at the same time, be competitive in the international market and have higher level of standards than farmers in other parts of the world.

But if we don’t have this minimum support for income and compensatory payments, the risk is that a lot of farmers who can be competitive without the crosscompliance rules that we have in Europe but not in other parts of the world-who in normal situations can be competitive-will not be competitive.

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Food for thought against food security concerns

World food prices are on the rise again. In December 2010, they exceeded the dramatic peak they had reached during the global food crisis in 2007/08. Add to this threatening megatrends, such as population growth and climate change, and think of recent news about the severe drought in Russia or the once-in-a-century flooding in Australia, both major staple food exporters. Who wouldn’t get an uneasy feeling that the specter of famine might come to haunt Europe again?

The European Commission has concluded in its communication on the post-2013 CAP that the CAP must preserve the EU’s food production potential, ‘so as to guarantee long-term food security for European citizens’.

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Commission's home truths on the CAP

While the Commission’s Communication on the future of the CAP after 2013 is less remarkable for what it says than what it leaves out, one of the accompanying documents is a fascinating read, and reveals much about how the Commission regards the future of the EU’s €55 billion-a-year farm policy.
Despite its unpromising title, the Consultation Document for Impact Assessment shows there are at least some people in the DG Agri bunker who are engaging their brains on the future of the CAP. What’s more, the document hints we might expect something altogether more radical and ambitious when the Commission’s legislative proposals are made later this year.

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Commission’s home truths on the CAP

While the Commission’s Communication on the future of the CAP after 2013 is less remarkable for what it says than what it leaves out, one of the accompanying documents is a fascinating read, and reveals much about how the Commission regards the future of the EU’s €55 billion-a-year farm policy.

Despite its unpromising title, the Consultation Document for Impact Assessment shows there are at least some people in the DG Agri bunker who are engaging their brains on the future of the CAP. What’s more, the document hints we might expect something altogether more radical and ambitious when the Commission’s legislative proposals are made later this year.

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EU budget debate advances

The likely size of the EU budget in the next financial perspective period (the length of which still remains to be decided, whether 2013-2000 or 2013-2024) became a little clearer last month with the publication of a letter to the President of the European Commission signed by five Member States including France, Germany and the UK as well as the Netherlands and Finland.

This called for an increase in payment appropriations over the 2013 by no more than the rate of inflation, thus maintaining the size of the EU budget constant in real terms. The letter called for commitment appropriations to increase by less than the rate of inflation.

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