Month: June 2011

The publication of the Commission’s proposals for the next Multiannual Financial Framework (MFF) 2014-2020 brings a little more clarity to its thinking on the likely shape of CAP reform post 2013.

Overall, the proposal represents a slight increase in the total size of the EU budget in the next programming period, by between 3.5% and 5% depending on whether one looks at commitment or payment appropriations. While a number of member states have sought a total freeze in real terms, this still represents a much more modest increase than that proposed recently by the European Parliament (which was a 5 percentage point increase in the share of the EU budget in GNI). The Commisison proposal would see the share of the EU budget in GNI shrink (in payment appropriations) from 1.06% in the current MFF to 1.00% in the next MFF.

The CAP budget

In commitment terms, the proposal allocates €281.8 billion for Pillar 1 of the CAP and €89.9 billion for Pillar 2 of the CAP (representing 76% and 24% of the total CAP budget, respectively).… Read the rest

A concern about increased price volatility facing EU farmers marks virtually every statement on the challenges facing the CAP post 2013, with the presumption that new instruments to address this challenge should be part of the CAP reform proposals. Income insurance and ‘contractualisation’ (greater use of written contracts and new collective bargaining powers for producer organisations) are the new tools most often mentioned in this context. A new report by Stefan Tangermann published by the International Centre for Trade and Sustainable Development punctures these claims and flatly concludes that intensified risk management instruments for EU agriculture are not warranted.

His argument is based around five points.

• Farmers may well face greater price volatility in the future, but there is little that can be done to dampen volatility of agricultural prices on international markets. While use of trade policy can help to limit the transmission of world price volatility into the EU market, this is always at the expense of trading partners including developing countries and so should be avoided.

… Read the rest

Much of the recent discourse around CAP reform emphasises that European agriculture has an important role to play in the future in contributing to global food security. This concern has been driven by the growing awareness of the challenge of increasing global food production in a sustainable way, which in turn was underlined by the impact of the two recent food price spikes (2007-08 and 2010-11) on global hunger.

Estimates by the U.N. Food and Agriculture Organization (FAO), the U.S. Department of Agriculture (USDA), and the World Bank concluded that between 75 million and 160 million people were thrown into hunger or poverty as a result of the 2007/08 global food crisis. One response to this finding is that it apparently contradicts the conventional wisdom that low global food prices (for example, brought about by high OECD agricultural protection) were responsible for increasing hunger and poverty in developing countries in previous years (see the paper by Jo Swinnen for a discussion of this issue).… Read the rest

This month (June 2011) sees the real start of the negotiations on the future EU budget framework for the coming years. On Thursday 9 June the Parliament will vote on the opinion prepared by its Policy Challenges Committee setting out its views on the size, structure and duration of the next multi-annual financial framework (MFF).

On 29 June the Commission will publish two legislative proposals, one on future own resources and the other on the MFF. These will be accompanied by impact analyses including of potential new own resources. This will be the first real indication of the Commission’s thinking on the future resources to be made available for the Common Agricultural Policy, although many months of hard negotiating lie ahead before an eventual agreement is reached. The current MFF runs until the end of 2013.

The Policy Challenges Committee report

A year ago, the Parliament set up a special committee on the policy challenges and budgetary resources for a sustainable European Union after 2013, also known as the SURE or Policy Challenges Committee.… Read the rest

The enterohaemorrhagic E. coli (EHEC) ‘cucumber’ crisis raises many questions. The most immediate is the public health dimension. The scale of the outbreak has been described as unprecedented by public health officials and the cause of the outbreak has yet to be localised. To date there have been 18 fatalities, all but one in Germany, and at least 499 people have haemolytic uraemic syndrome (HUS), a life-threatening kidney disease (see update from a German spokesman here). For comparison, according to the University of Edinburgh National Creutzfeldt-Jakob Disease Research & Surveillance Unit, 209 people have died in the EU (168 in the UK alone) from vCJD (‘mad cow disease’) since 1990.

The outbreak also raises questions once again about the governance of the food system – is the mixture of market incentives, public regulation, legal liability and socially-enforced moral standards of behaviour working sufficiently well to warrant consumer trust in the governance of food safety?… Read the rest