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Return of the butter mountain

It was the recession of the 1930s that ushered in agricultural protectionism and subsidies, not least in the United States. Now the European Union has reverted to two of its old favourite policy instruments: intervention buying and export subsidies in the dairy sector just when we thought we had seen the last of them. Stocks of butter disappeared completely in 2007.

Faced with a drastic drop in dairy prices, the EU is to buy 30,000 tons of butter at a guaranteed price. Over three times as much skimmed milk powder is to be purchased – 109,000 tons. In addition, export subsidies will be given to skimmed milk powder, butter, butter oil and cheese.… Read the rest

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Prospects for GMO products in the EU

After the forceful and successful management of the agricultural dossier by the French Presidency in the second half of 2008, it was inevitable that the agenda for the Czech Presidency would be a light one, and this is also reflected in the activity level for this blog since the beginning of this year.

Nonetheless, even in a context where most attention is focused on dealing with the financial crisis and the strengthening recession hitting Europe, Europe’s agricultural and food industries continue to be required to address regulatory issues affecting the governance of the sector. One of these issues concerns the regulatory environment for genetically modified products (GMPs), and I am indebted to EurActiv for drawing my attention to the outcome of a meeting of the Environmental Council in early December which gave a series of political directions to the Commission on this issue.… Read the rest

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Budget pressure on CAP

With the Health Check out of the way, it looks as if the medium-term future of the CAP is going to be strongly influenced by discussions of how the EU budget should be spent. This always raises the awkward question of the opportunity cost of spending large sums of money on subsidising farmers.

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More on Irish pigmeat compensation

The European Council at its last meeting under the French Presidency on 11-12 December had a weighty agenda, discussing the EU energy and climate change package, the European economic recovery plan and agreeing with the Irish government an approach which might allow the Lisbon Treaty to enter into force before the end of 2009. The Council also welcomed the political agreement on the CAP Health Check and, in a move surely made with one eye on the upcoming second referendum in Ireland on the Lisbon Treaty, it “expressed its support for Ireland’s effort to deal with the situation relating to pigmeat and its prompt precautionary action.… Read the rest

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Food safety rules as protection or protectionism?

SPS (sanitary and phytosanitary standards) barriers figured prominently in the final Agricultural Council of 2008 under the French Presidency. Agricultural Ministers agreed Council Conclusions on the safety of imported agricultural and agri-food products and compliance with Community rules. At the same meeting, EU Farm Ministers rejected a Commission proposal to allow the use of antimicrobial substances to treat poultry carcasses, which would have re-opened the Community market to US imports. Is there a danger that food safety protection becomes an excuse for protectionism?

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Dairy quota row highlights industry divisions

Commissioner Mariann Fischer Boel’s proposal for five annual dairy quota increases of 1 per cent each, adopted unchanged by farm ministers, is under attack from two sides. The Commission believes that this is a sure sign that it has negotiated a fair middle path through a morass of conflicting objectives. A less charitable interpretation would be that the needs of an internationally competitive industry have been partially sacrificed to those of marginal farmers with political clout.

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The Estonian vision

A charming young Estonian woman greeted me at the European Parliament yesterday when I went to give evidence to the Agriculture and Rural Development Committee (of which more in due course). Of broader significance Estonia is probably the only new member state with a clear concept of how the CAP should evolve. This is outlined in an Agra Focus interview with farm minister Helir-Valdor Seeder.

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Court of Auditors' report on cross compliance is damning

It’s no wonder that the Commission suppressed the Court of Auditors report on cross compliance for as long as it could – the report is damning and undermines the Commission’s case for the legitimacy of EU farm subsidies.
Speaking in 2005, Agriculture Commissioner Mariann Fischer Boel explained how she sees cross compliance in relation nearly 40 billion euros of public expenditure on payments to farmers:

“I would emphasise that decoupled payments are not “money for nothing”. To get the cheque in the post, a farmer has to respect a demanding range of standards related to the environment and animal welfare. We call this system “cross-compliance”.”

… Read the rest