Monday, October 15, 2012

Dancing towards convergence

EU Farm Commissioner Dacion Ciolos is said to be resigned to the fact that the current proposal for internal convergence of direct aid payments will need to be watered down in order for a compromise to be reached, reports Agra Europe.

'It is no longer acceptable for two hectares of hill land in the same member state with the same agronomic potential to account for differences of €100 to €600 and, in some regions, even more,' argued the Commissioner at the 2012 Congress of EU umbrella farmers union Copa-Cogeca last week. 'Over the period 2014-2020, a genuine convergence campaign is quite simply unavoidable if we want to still be credible.' One might add that there are a lot of things about the CAP are incredible, but that hasn't stopped them remaining in place.

There appear to be two groups of member states working on alternatives to the Commission’s plans for internal convergence. Some 40 per cent of a country’s Pillar One envelope would be used for flat-rate aids in 2014 under the current proposal, but critics claim this will lead to subsidies being moved away from more productive areas.

But then, of course, there has always been confusion about whether the CAP is there to boost the competitiveness of EU agriculture or act as a form of social policy for marginal farmers. In practice it is more of the latter, but a remarkably inefficient one in terms of reaching its target at minimum cost.

The losses and gains incurred by farms due to the transition should be limited, Ireland, Spain, Lithuania, Denmark, Portugal and Italy are said to have argued at the recent Management Committee meeting. Under a proposal tabled by the six, countries would be allowed to ring-fence ‘greening’ payments for individual holdings rather than on a national or regional basis – cushioning the impact for livestock farms in particular.

Meanwhile, Austria, Belgium, the Czech Republic, Hungary and Slovenia are pushing for member states to be able to apply a flat rate of national or regional subsidies in 2021, rather than 2019. Warning against what they say would be a “profound redistribution” proposed for some countries, governments would be able to choose between three alternative convergence models.

Only a handful of liberally-minded countries are understood to have defended the Commission’s proposed timetable for convergence, albeit conceding that some degree of flexibility is necessary.

The issue is likely to be a tricky one of the agenda of the Farm Council in Luxembourg later this month.

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