Experts on agricultural policy are often asked why the ‘farm lobby’ has been so successful although, of course, at EU level its influence has declined over time. In part this has been because it has been losing the debate and has often shown insufficient flexibility in responding to new framings of issues.
Nevertheless, one should never underestimate the ability of producer interests to use new concerns to their advantage. In the past, for example, British farmers used concerns about the balance of payments to justify the subsidies they received. Food security concerns were significant during the formation of the CAP with recent experiences of food shortages in the minds of decision-makers. These concerns were reinforced by arguments about what might happen if the Cold War got a bit hotter.
With world supply and demand being tighter than it has been for some time, farming journalists and others have been trying to propel food security back on to the EU policy agenda. They appear to have scored at least a partial hit with farm commissioner Mariann Fischer Boel.
She said that Europe was producing enough to meet its own needs but had to keep one eye on growing demand around the world and discuss the question of ‘food security’. ‘It is obvious that the whole discussion on energy security started when suddenly the Russians cut off the pipelines. And it is obvious that we would want to think about food security. We can discuss buffer stocks just as you have for oil today.’ EU rules require countries to keep three months’ supply of oil in storage.
The analogy with energy security is an imperfect one as there is no one country with a pipeline of food on which Europe depends that it can turn off to great effect (although the moratorium on exports being operated by Russia and the Ukraine has had an impact on world prices).
Let’s hope that just when we thought that intervention buying was fading away, it won’t be rejuvenated as ‘buffer stocks’. One of the greatest weaknesses of the CAP was always the creation of a risk free market through the purchase of surpluses by government agencies.
Latest posts by Wyn Grant
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The US Senate has approved a bill that would require gasoline producers to blend 36 billion gallons of ethanol into gasoline by 2022, an increase from the current standard of 7.5 billion gallons by 2012. The House did not include such a provision in the version it passed, and it is uncertain whether any final legislation will emerge this year and what it will say about ethanol if it does.
Ethanol proponents say a new energy law is virtually inevitable at some point, and that even if it does not pass this year, lower ethanol prices will provide an incentive for refiners to blend more ethanol into expensive gasoline. A higher renewable fuels standard would force refiners and blenders to work faster to process increased amounts.
A strong energy law would also increase investment and research into ethanol production from nonfood sources, like switch grass, and persuade auto companies to make more cars that run on blends well beyond the standard low percentage ethanol mixture, ethanol proponents argue.
“This is an industry that is going to continue to grow,” said Bruce Rastetter, chief executive of Hawkeye Renewables, a private company based in nearby Ames that has two distilleries and two more under construction. “Once you see an energy bill, I think you will see the industry respond again.”
Still, he has dropped plans to build a fifth plant and take Hawkeye public.
http://www.nytimes.com/2007/09/30/business/30ethanol.html?_r=1&hp=&oref=slogin&pagewanted=print