EU-Moroccan agricultural trade deal running into trouble in European Parliament

In September 2010 the European Commission forwarded a draft agreement on further reciprocal liberalisation of agricultural trade with Morocco to the Council and the Parliament, and ultimately the member states, for approval. This draft agreement has nothing to do with responding to the Arab Spring, although its ratification now takes place in that context.

The agreement springs from the authorisation given by the EU Council in 2005 to open negotiations under the 2000 Euro-Mediterranean Agreement which provides that the Union and Morocco will gradually implement greater liberalisation of their reciprocal trade in agricultural products, processed agricultural products and fishery products.

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What future for the CAP financial discipline mechanism?

One issue which was not specifically addressed as part of either the Commission’s November 2010 Communication on the CAP post 2013 nor its proposal for the Multiannual Financial Framework is the future of the financial discipline mechanism for CAP Pillar 1 spending. Financial discipline is the process by which EU Farm Ministers each year determine if percentage reductions are required to keep Pillar 1 spending within the budget (in practice, by making reductions in direct payments).

Financial discipline explained

Financial discipline was introduced in the Fischler 2003 CAP reform to take effect over the period 2007-2013. The aim is to anticipate budgetary problems before they occur.

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Did the Commission have second thoughts on raiding Pillar 2 to support Pillar 1 payments?

In presenting its proposals for the 2014-2020 MFF on June 29th last, the Commission Services produced a helpful guide to the proposals in the form of a Q&A Questions and Answers memo. Intriguingly, there appear to be two versions in circulation.

For example, one version on the EUBusiness.com website (also picked up by NFU Online) contains the following paragraph on CAP Pillar 2.

The allocation of rural development funds will be revised on the basis of more objective criteria and better targeted to the objectives of the policy. This will ensure a fairer treatment of farmers performing the same activities.

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Food assistance for most deprived persons

One of the revelations in the Commission’s proposed Multiannual Financial Framework was its proposal to move funding for the programme of food assistance to the most deprived persons out of the CAP Pillar 1 budget to the European Social Fund, thus saving an estimated €3.5 billion which could then be used for other agricultural spending.

Whether the EU should be funding social programmes of this kind remains controversial in the Council of Ministers, although there is unalloyed enthusiasm for the programme in the European Parliament given that the majority of parliamentarians there favour spending of all kinds.

Origins of the programme

The scheme had its origins as an emergency measure in the exceptionally cold winter of 1986/87, when surplus stocks of agricultural produce were given to Member State charities for distribution to people in need.

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