Cross compliance for labour laws?

The Global Mail reports on a shocking case of alleged abuses of migrant workers in the Spanish horticulture industry, concentrated in the southern Spanish region of Almería along a 200km strip of hothouses known as el mar de plásticos. This is where much of Europe’s salad vegetable crop is grown.

Allegations range from payment below the minimum wage, employment of illegal migrants, intimidation and, in the most recent case, murder. The UK’s Guardian newspaper’s special correspondent Felicity Lawrence wrote a startling report into labour abuses in €2 billion a year hothouse industry. She found:

Migrant workers from Africa living in shacks made of old boxes and plastic sheeting, without sanitation or access to drinking water.

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How the CAP contributes to world market food price volatility

The contribution of export bans to the world food price spike in 2008 is now well-established, particularly for commodities such as rice (for example, see Abbott, 2012 and Sharma, 2011). Martin and Anderson (2012) have calculated that over the 2005-2008 period more than 45 per cent of the explained change in the international price of rice was due to changes in border restrictions that countries used in an attempt to insulate themselves from the initial increases in price.

Countries resort to export bans in an attempt to keep down the price of food to domestic consumers. When undertaken by countries whose level of trade is big enough to influence the world market price, then an export ban also has ramifications for other countries.

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What is rural development about?

On 1 January 2011, 41% of EU-27 population lived in urban regions, 35% in intermediate regions and only 23% in rural regions, as suggested by the latest release of Eurostat. What is more, the population of urban regions grew by 5.2 per 1000 inhabitants, that of intermediate regions by 2.2‰, while rural regions decreased by 0.8‰ in 2010. These figures are based on a revised urban/rural typology, developed by the European Commission, and are valid for NUTS3 regions. Regions are classified as rural, intermediate or urban based on population density and total population.

However, as expected, individual member states differ significantly regarding the share of their rural population.

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Latest EU AMS notification confirms declining trend in WTO amber box support

The EU has just submitted its domestic support notification to the WTO for the year 2008/09 (hat tip to LB) and this year there are no surprises. Total support (using the WTO definition) was a shade over €80 billion, but the value of its trade-distorting support (the so-called ‘amber box’, given by its current total Aggregate Measure of Support) fell to its lowest level ever, at just under €12 billion.

In that year, the EU used just over 16% of its Total AMS commitment (its bound ceiling) of €72.2 billion. In other words, the EU could have reduced its AMS commitment by over 80% in that year and would still have fulfilled its WTO amber box obligation.

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End the use of export subsidies in the 2013 CAP review

A rather specific feature of the EU’s agricultural policy has been its use of export subsidies to maintain market prices on its domestic market in the past. While the EU was not the only country to make use of this policy mechanism, it accounted for around 90% of global expenditure on formal export subsidies (while arguing that other countries provide export support through more indirect means, such as through state monopoly marketing boards or through food aid).

EU use of export subsidies has fallen dramatically although they still have not disappeared. Total expenditure on export refunds fell from €3.8 billion in 2003 to a projected €139 million set aside in the EU’s draft 2012 budget (at their peak in the late 1980s and early 1990s, they amounted to €10 billion per year).

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The cost of flat-rate agri-environmental measures

The Commission’s proposals to require shallow, one-size-fits-all, green measures across the EU as a whole in return for a green payment in Pillar 1 have been widely criticised as overly prescriptive, yielding limited environmental benefits (‘greenwash’), administratively complicated for member states and unnecessarily costly in terms of the trade-off with food production.

I reviewed these criticisms in a recent note for the European Parliament’s COMAGRI (link to appear when the note is published shortly). In the note I favoured a continuation of the past CAP reform trajectory in which a larger share of the CAP budget would be shifted to Pillar 2 in order to allow more ambitious and targeted agri-environmental measures (AEM).

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On the complexity of defining active farmers

According to the latest proposals of the European Commission, applicants whose CAP direct payments equal less than 5% of their total receipts obtained from non-agricultural income or failing to provide the minimum land cultivation will be excluded from the provision of direct payments.

This might appear a good definition at first sight but the devil, as always, lies in detail. First of all, it is pretty sure that such a proposal would increase bureaucracy, which is totally against the ‘cutting the red-tape’ principle of the Commission. Just imagine how this system would be implemented for each and every farm in Europe.

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Evolving alliance for saving the status quo

France has played an extremely active role during the past few weeks to create a strong alliance aiming to save the status quo in the future of the CAP. Bruno Le Maire, the French Farm Minister has proved himself to be successful in persuading his German, Spanish and Italian colleague to help France maintaining the CAP as it is.
Starting on 30 January, Mr. Le Maire met Mario Catania, the Italian Farm Minister to discuss the future of the CAP. Both ministers declared the existence of a ‘strong convergence’ between French and Italian opinions in the debate and asserted that the two countries will safeguard each other’s interests in the main issues like fund distribution or the ‘milk package’ in the future.

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The green menu system: an idea worth considering

The recently published analysis of Groupe de Bruges (GDB) starts with demonstrating the challenges agriculture faces in the 21st century and points out that one of the biggest challenges will be to increase the production of sufficient, nutritious and high quality food for a growing world population while massively improving land use and management performance. In this context, the analysis criticises Commission proposals as they lack many important issues such as urgency, systems approach and integrated perspectives.

As to the lack of urgency, the analysis states that the Commission does not seem to realise that the European Union is in its biggest crisis ever and therefore does not provide any plans for acute natural/food security crisis.

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