One of the revelations in the Commission’s proposed Multiannual Financial Framework was its proposal to move funding for the programme of food assistance to the most deprived persons out of the CAP Pillar 1 budget to the European Social Fund, thus saving an estimated €3.5 billion which could then be used for other agricultural spending.
Whether the EU should be funding social programmes of this kind remains controversial in the Council of Ministers, although there is unalloyed enthusiasm for the programme in the European Parliament given that the majority of parliamentarians there favour spending of all kinds.
Origins of the programme
The scheme had its origins as an emergency measure in the exceptionally cold winter of 1986/87, when surplus stocks of agricultural produce were given to Member State charities for distribution to people in need. The measure was subsequently formalised and based on intervention stocks. As agricultural surpluses reduced, the programme has been supported by a direct financial contribution, and the scheme was amended in the mid-1990s to make it possible to supplement intervention stocks with market purchases in certain circumstances.
In 2008, with surplus stocks almost non-existent and unlikely to increase in the foreseeable future, and with food prices rising, the Commission proposed that the budget for the scheme should be increased and that it should be allowed to make market purchases on a permanent basis, to complement remaining intervention stocks. But it was extremely difficult to find a Treaty basis for this expenditure, and even more so to justify Community action as a value added measure under the subsidiarity criterion.
In 2010 the Commission presented an amended proposal to revise the scheme, to overcome the impasse in the Council and to help in reaching a sufficient majority. According to this proposal, food would be sourced either from intervention stocks or from the market and would no longer be based solely on products eligible for intervention. The annual financial contribution of the EU would be capped at €500 million, with co-financing by member states up to 25%.
Failing the subsidiarity test
When the scheme was primarily a means of disposing of intervention stocks, it was justified as a measure under Article 33 (1) (c) of the Treaty which sets out the CAP objective “to stabilise markets”. It was now to be justified by Article 33 (1) (e) “to ensure that supplies reach consumers at reasonable prices”.
The attempt to justify the scheme under the necessity test was even more tortuous and self-pleading.
The CAP objective of ensuring food for all EU citizens requires a targeted and subsidiary action. As shown in 3.1, the basis for action exists in Article 33 of the Treaty. The question that remains concerns the form that action at EU level should take, taking into account programmes that already exist in the Member States in the overall context of their social welfare policies.
It is worth recalling that, traditionally, Member States have put in place support systems to address housing, health, employment, education, training and retraining. But very few have specifically addressed the question of food poverty, which since the end of the 19th century has been left to charities to resolve……
.. EU food aid action should complement actions that exist in the Member States and offer a clear value added to MS actions. Factors that can be taken into account when assessing the value added are whether the scale of the intervention is appropriate, what level of administrative capacity is required and any learning processes that may result from EU action…
There follows a table which purports to demonstrate how these factors are addressed by the programme and which includes such gems as “creating civil society attitude” and “EU labelling of food distributed”. These factors have nothing to do with the necessity test as laid down in the Treaty (Article 5 of the Treaty of European Union) and which is worth repeating:
Under the principle of subsidiarity, in areas which do not fall within its exclusive competence, the Union shall act only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States, either at central level or at regional and local level, but can rather, by reason of the scale or effects of the proposed action, be better achieved at Union level.
There are no obvious impediments either in terms of diseconomies of scale or the existence of regional spillovers which make it more difficult for member states to administer a scheme of this kind.
Despite the enthusiastic support of the European Parliament, the Commission’s proposal has been held up by a blocking minority in the Council. The matter came to a head in April when the Court of Justice issued its decision upholding a complaint by Germany that the programme as it now operates cannot be justified as part of the common agricultural policy and thus has no basis in community law. As a result, the budget for the programme in 2012 has been cut from €480 million in 2011 to €134 million in 2012. This is undoubtedly a disaster for the charities which have been accustomed to receiving this aid.
At the Agricultural Council on June 28th last, Italy put the matter on the agenda and, supported by other member states (France, Poland, Estonia, Spain, Latvia, Bulgaria, Lithuania, Hungary, Malta, Portugal, Romania, Slovenia and Slovakia and some others), requested the Commission to submit proposals to amend the current system to ensure its future continuity.
The Council minutes include the following response from the Commission:
The Commission presented a proposal on this subject to the Council in September 2010 but some delegations expressed reservations on this text, as was the case for the first proposal presented by the Commission in 2008, as regards the legal basis, which in their view should be drawn from social policy rather than agricultural policy. The Commission indicated its willingness to discuss on the basis of its revised proposal tabled in 2010 as soon as possible in order to limit the impact of the judicial decision on this programme.
We can now see, from the proposed MFF 2014-2020, that the Commission has decided to alter its strategy and, indeed, to make this part of the European Social Fund in future.
It is hard to argue against food distribution to the needy. Not surprisingly, the internet-based public consultation on extending the food distribution programme attracted a large response, with replies expressing overwhelming support for the continuation of the Union food distribution programme.
Food poverty, and poverty in general, is indeed an important issue in Europe and member states should be encouraged to give it a higher priority. Sharing of best practice in terms of what works and what doesn’t is a useful value added role for the Union. For example, one issue which should be considered is whether addressing food poverty is best done by distributing bulk commodities through charities, by the use of food vouchers or through raising child benefit or minimum social welfare rates.
But as I have argued previously with respect to the school fruit and vegetables scheme, public support for the European construction will be better achieved in the long-run if we don’t blur the distinctions between what the Union and the member states should do. This is one area where money could be saved in the budget negotiations.