'Could do better' is end of term report

As 2012 draws to a close and the Cypriot EU Presidency concludes, agriculture ministers and MEPs across the 27 member states took time this week to reflect on how CAP reform negotiations have gone over the past six months.

Agra Europe reports that there was a general feeling of satisfaction that significant progress has been made but also the admission that much work still needs to be done in the coming six months under the Irish Presidency.

On Tuesday, ComAgri announced that from the near 8 000 amendments to the European Commission’s CAP reform proposals sought by member states, the total has now been whittled down to just 100 compromise agreements, which will be voted on in January. A final vote will only take place once the EU’s next long-term budget has been agreed (likely to be early February, 2013).

The outgoing Cypriot Presidency released its progress report on its six months in charge of CAP reform, praising the 'positive spirit' of the negotiations over the period, but observers would still probably come away with a nagging feeling of ‘must try harder’.

As Irish farm minister Simon Coveney reiterated, 'nothing is agreed until everything is agreed,' admitting it would be a 'big ask' to get a CAP deal by June, which is widely seen as the deadline if parts of the new policy will be ready for 2014.

Many ministers were openly frustrated at the lack of progress on the EU’s 2014-2020 budget, which is undoubtedly the major hurdle for the reform of the CAP. Of course, the amount spend on the CAP is a hurdle in the way of a budget agreement in the eyes of some member states, not least the UK. Beyond that there are still obviously problems to be ironed out with the ‘greening’ element of the proposals as well as questions about the plan for the internal convergence of direct payments. What that means is that some get more, but perhaps not as much as they hoped for, and others get less. That's never an easy balance to draw.

France determined to defend CAP budget

The EU budget for 2013 was finally signed off this week after the European Parliament approved a compromise agreement between member states that will give the CAP slightly less next year than was originally proposed by the European Commission, reports Agra Europe

CAP payments for 2013 will total €56.44 billion, a marginal increase from the current year but €350 million lower than what the Commission asked for. This leaves the Pillar One direct aid and market-related payment kitty at €43.93bn, up 0.13 per cent from this year, with the Pillar Two rural development budget set at €12.5bn - 3.38 per cent greater than in 2012.

On the subject of the next long term budget, France set out its stall against any cuts to the CAP budget for 2014-2020 and called for greater reductions from elsewhere in order to appease countries such as Sweden and the UK, who are fighting for greater reductions than are currently on the table. If the CAP is left inviolate, this would mean quite substantial cuts elsewhere, in particular in programmes that might do more to stimulate the growth of the European economy than the CAP.

As the biggest recipient of CAP funding within the EU, France is determined to pull back further funds into the agricultural budget after European Council President Herman Van Rompuy proposed a less drastic reduction of €17bn at the EU budget talks, softening on the €25bn he had earlier proposed.

But 'several billion' euros will still need to be restored to the budget if it is to satisfy France, the country’s European Affairs minister Bernard Cazeneuve told journalists at a European Parliament plenary session this week. But no specific amount to be recovered for the CAP is being aimed for, a spokesperson for the French Agriculture Ministry told Agra Europe.

Top official admits CAP deal will be delayed

A senior European Commission official let slip this week that the Brussels establishment is now preparing for the likelihood that reform of CAP Pillar One will be delayed until 2015, as time is running out on reaching a political agreement in time for the start of 2014, reports Agra Europe.

Gwilyn Jones, a member of EU Agriculture Commissioner Dacian Ciolos’ cabinet, is perhaps the first official to publicly say what many analysts have been thinking for a while now – that positions on this particular part of the CAP are too far apart for an agreement to be reached in the near term.

With the fairly radical overhaul of the Pillar One direct payment scheme proposed by the Commission and the subsequent debate on issues such as the convergence of payments and ‘greening’, it was always likely that this particular part of the CAP would divide member states.

However, the crux of the matter is still almost certainly the failure to conclude talks on the EU’s next long term budget – the multiannual financial framework (MFF) for 2014-2020. MEPs have made it clear they are not prepared to make any decisions on the CAP until they know how much money they have to work with.

Now that a MFF agreement is not likely to happen until late January at the earliest – when the talks will resume – it puts added pressure on efforts to reach a compromise deal and put the relevant measures in place in time for January 1, 2014.

Agra Europe's Chris Horseman believes that an agreement on CAP reform was not likely to happen before next summer at the earliest - but it would appear that even this deadline will now not be met.

So what now? Ciolos has made clear that he is still aiming for an agreement to be made in time for 2014 but has also mooted the idea of a “transitional year” taking us to 2015.

It is unlikely, however, that Pillar One in this transitional year will look any different to how it does now. The exact same structure for CAP direct payments would have to remain, provisionally, in place. The only difference is that if in the meantime agreement is reached on an MFF deal that will see the CAP budget trimmed, there will be less money available from 2014.

The assumption would be that the existing single farm payment scheme would ‘roll forward’ but with a cut in the budget of the order of 2-3% - and under the Financial Discipline Mechanism rules that would translate automatically into a proportional cut in each farmer’s direct aid payment cheque in 2014. This is a scenario which is unlikely to satisfy anyone, but such an outcome is all too familiar with the CAP.

There is more optimism that a common position on Pillar Two – rural development – can be reached in time for 2014, as was expressed at the recent Farm Council. How this could sit with a Pillar One framework that maintains the status quo will be something for MEPs and domestic ministers to ponder as they enter the Christmas and New Year break.

Progress towards a European food model?

This paper reports on an Austrian workshop that sought to review progress towards a European food model: Food model

The construction of such a model has been an aspiration of the EU since the Fischler reforms of the Common Agricultural Policy. It sought to replace an earlier crude productionist model that emphasised the quantity of production with one that put the consumer at the centre of the model with an emphasis on quality rather than quantity. Implicit in this approach was a contrast with an American model which still adhered to a more Fordist model of homogeneous mass production. The interests of the farmer were still served because high value added production offered the prospect of better margins per unit of production.

The flaw in this model was that, although niche production had flourished as consumers had become wealthier and more discerning, a lot of European agriculture was still dependent on price-sensitive commodity production. An era of austerity has reinforced consumer behaviour in which price is the dominant consideration.

The Austrian paper takes sustainability as an unifying principle and considers the relationship between a number of dimensions such as food safety, food quality, regionality, diversity and value and appreciation of food.

From a British perspective there is an interesting absence of any reference to animal welfare. Indeed, it is claimed that conservation is promoted by 'bringing rare species and endangered animal breeds back on the table of consumers.' In other words, one eats that which is conserved.

Nevertheless, this paper is an interesting contribution to a continuing debate: what, if anything, is distinctive about European agriculture and how can the CAP best serve it?