Financing emergency aid to address market disruption due to COVID-19

There has been strong pressure on Commissioner Wojciechowski to get the Commission to do more to protect farmers and agricultural markets from the adverse effects of the lock-down responses to the coronavirus pandemic.

The Commissioner has argued that there is no funding available for these measures in the EU budget. In this post, I assess the funding that may be available to the Commissioner. I conclude that available funding is limited but not exhausted. It now seems time to make use of the crisis reserve that was put in place for exactly this eventuality as well as unused margins under the European Agricultural Guarantee Fund (EAGF) in the EU budget.

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U.S. farm support to explode in election year 2020

The U.S. has agreed on a $2 trillion stimulus package, the largest economic stimulus in its history, in response to the economic impacts of Covid-19. U.S. farm groups lobbied hard to be included in the package, and $23.5 billion was included in the final package for farm aid. This farm aid comes on top of the two trade aid packages of $12 billion and $16 billion introduced by the Trump Administration in 2018 and 2019, respectively, to provide relief to commodity producers hurt by the retaliatory tariffs introduced by various countries in response to tariffs on their exports to the U.S.

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External convergence debate continues to simmer

One of the many issues that will need to be resolved when Heads of State and Government get around to once again considering the Multi-annual Financial Framework (MFF) 2021-2027 is what position to take on the external convergence of CAP direct payments.

The Commission has proposed a further narrowing of the differences in the average value of direct payments per hectare between Member States in the post-2020 CAP framework. For a number of countries from Central and Eastern Europe nothing less than full equality by the end of the MFF period will be acceptable. There is equally strong push-back from another group of Member States that argue there should be no further reductions in the CAP joint pillar allocations for the purpose of redistribution among Member States.

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