Old divisions rear their head

Those who like to emphasise the way in which 'discourse' or ideas can shape policy have been able to trace significant changes in the debate about the Common Agricultural Policy, but this has not been reflected in real reform. Indeed, older discourses have been revived with the debate about food security. Last week's Farm Council saw a revival of the old debate between advocates of a more market oriented policy and those who want more subsidy and intervention.

There was some progress on CAP reform with most EU governments backing an overhaul of the CAP's 'less favoured areas' (LFA) scheme, but there was division over how best to deal with market shocks in future.

Most governments agreed that the overhaul of the LFA scheme should be based on new 'biophysical' factors but added that the backing would be dependent on them getting considerable flexibility to adapt the criteria and parameters to their territories, with French farm minister Stéphane Le Foll, whose country has been resistant to the overhaul, particularly vocal on this point.

A majority also agreed that member states needing more time to make the transition should be allowed to extend their deadline to December 2015, from the original January 2014, but German agriculture minister Ilse Aigner, backed by Poland and Austria, questioned the plan and claimed that more than just 'fine tuning' based on a common EU framework would be needed.

A clearer dividing line was found over how the EU should deal with agricultural market volatility, with Greece and Ireland backing calls for a “political stance” on volatility, while the UK and Netherlands insisted that farmers' decisions should be based purely on the market conditions.

Ministers were discussing the European Commission's plans to update the CAP's traditional market management tools under the 'Single CMO' Regulation - namely public intervention, private storage and export refunds. The plans for 2014 onwards include the introduction of automatic tendering for public intervention for skimmed milk powder and butter as well as an accelerated procedure for private storage aid.

While many member states consider the Commission's plans to be sufficient, several called for market intervention to go further than the proposals and involve automatic updates to reference prices for public intervention. The divisions on this point were largely along the traditional lines of those who favour the ‘free market’ approach and more ‘interventionist’ supporters.

Changes proposed for LFA payments

The European Commission has unveiled proposals to make changes in the way in which Less Favoured Area (LFA) payments are made. A policy review was set in train following criticism by the European Court of Auditors in 2003 (these things take time) that some countries were abusing the definition of 'less favoured'. This particularly applied to so-called 'intermediate' areas.

In its Communication the Commission suggests that payments should be made in future on the basis of 'biophysical' rather than socio-economic criteria. The Commission's view is that future payments should be based on soils, drainage, climate and terrain rather than socio-economic disadvantage to satisfy the public that the money is being well spent.

The proposals have caused alarm in Scotland where 83 per cent of the land area is deemed intermediate LFA and attracts funding of about £61m a year into livestock farming into this areas. Wales also has 80 per cent of its land area designated as LFA.