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EP own-initiative report on the post-2013 CAP

The Rapporteur of the Committee on Agriculture and Rural Development (ComAgri), George Lyon, has presented his take on the post-2013 CAP. Once the document has been discussed and amended by ComAgri, it will be voted upon first in ComAgri (June) and then in the EP plenary (July).

The starting point of the draft already chills expectations: “The Common Agricultural Policy has been largely successful in fulfilling the objectives it was set out to accomplish so far.”

Three groups of objectives are identified. 1) Supporting economic needs – including an EU agriculture competitive on world markets, EU food security in an unstable world context, and the valuable contribution EU agriculture and the downstream agri-food sector make to EU growth and employment.

2) Responding to social concerns – to enhance farmers’ incomes that are lower than the EU average in most member States and that decreased in 2009; to support the sustainable, dynamic and balanced socio-economic development of European rural communities; to attract younger generations to rural areas and activities; and to tackle rural unemployment.

3) Delivering benefits in terms of public goods – with a focus on the positive externalities of agriculture, justifying ‘a strong and well-supported CAP’.

From these objectives, the draft moves to an outline of future CAP measures and structures. The basic tenet is: keep things roughly as they are. Maintain some market measures as a safety net, continue with the Single Farm and the Less-Favored Area Payments, and uphold flexible spending entitlements that are fully community-financed (roughly corresponding to Art. 68). The current budget should also be kept, and co-financing limited to the sort of measures that currently fall under co-financing.

At some point, the report asks for the “maximisation of the delivery of environmental goods”. But this is misleading rhetoric. You can spend any Euro only once. If you want to serve many objectives and finance many measures that have nothing to be with environmental goods, you are leaving little for the environment.

For this draft, any argument is good enough if it results in payments to farmers. In the category “Supporting economic needs”, one objective is “corrections to market failures such as exposure to natural disasters, high risk and price volatility, lack of demand elasticity, farmers’ position as ‘price takers’ in the food chain, etc.” Since when are natural disasters a market failure? Or high risks, or a lack of demand elasticity? These are market conditions that determine how profitable a given sector is and who should be in this sector (according to how successful individual economic actors are in coping with these conditions). They can, in particular circumstances, give rise to market failures, and these market failures can, again in particular circumstances, justify efficient state action (which is unlikely to take the form of round-about income support or market intervention to support prices). But considering all these phenomena enumerated above as ‘market failures’ that somehow warrant the Single Farm Payment or price intervention is untenable.

What is most upsetting is that this draft comes from George Lyon, who happens to be a Liberal Democrat from the UK. These are the best reform credentials one could wish for. Once MEPs from other party groups and member states have introduced their amendments, the outcome will likely be worse.

But why would a Liberal Democrat from the UK write such a draft? Have a look at his homepage. Mr. Lyon was brought up in a seventh-generation tenant-farming family, occupied different positions within the National Farmers’ Union (NFU) starting in 1989, and had a stint as President of NFU Scotland in 1998-1999. He is hardly a special case. ComAgri MEPs frequently have close farming ties, which helps to explain why they overwhelmingly support a CAP that serves farmers first. If the EP wants to be worthy of its new powers in agriculture, it must intervene early and forcefully in the work of ComAgri.

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