Budget structure proposals upset farm lobby

It may seem a very technical matter, but proposed changes to the EU budget structure have upset farm lobby COPA/COGECA.   They have sent an open letter to the Commission president, reminding her of the large scale farm protests in 2024.

They state: 'In an era of geopolitical instability, economic uncertainty, and mounting societal challenges, a strong and resilient agricultural sector is not just strategic; it is the keystone that supports the EU’s entire security architecture. Copa-Cogeca and its members representing European farmers and agri-cooperatives are steadfast in our commitment to ensuring food security, sustainability, as well as economic and social stability for 450 million citizens of Europe and beyond.

The pan-European agricultural protests of 2024, though driven by different causes, all revealed the vulnerability of our communities, exposed to the cumulative and conflicting effects of policies in an increasingly complex market environment.

The recent European Commission’s Vision for EU Agriculture and Food rightly acknowledges the sector’s strategic importance. Likewise, the Council’s EU Strategic Agenda and the Commission’s political guidelines for the 2024-2029 mandate recognise the indispensable contribution of farmers and rural communities to Europe’s economic and social fabric.

The farming community is still grappling with numerous challenges, such as geopolitical instability, high energy prices, legal uncertainties, and stricter environmental regulations. While farmers have made significant progress in improving productivity and reducing emissions, they still face rising costs and unfair competition, which is eroding their income and making it harder to remain competitive.

As you, President von der Leyen, rightly emphasised: we are entering a new era of rearmament in which Europe must assume greater responsibility for its own security. In this spirit, we firmly believe that there is no security without food security — and no strategic autonomy without food autonomy.

This is why we are profoundly alarmed by recent discussions on reallocating EU funding into a Single Fund effectively eliminating the EAGF and EAFRD – the pillars of the Common Agricultural Policy (CAP). Such a shift represents a fundamental change to the governance of the next Multiannual Financial Framework (MFF) and would severely undermine the CAP, which remains the cornerstone of Europe’s competitiveness and food sovereignty.

Dismantling the two-pillar CAP structure based on the EAGF and EAFRD alongside using a single national programming approach per Member State will lead to a further loss of commonality in European policies. Besides further weakening the Single Market, this will have far-reaching consequences for food production and security and the maintenance of vibrant and populated rural areas in the EU. There is a clear added value in European expenditure when it comes to policies such as the CAP and this must be recognised and kept.

We are not the only ones who think so. Alongside 28 other key EU agri-food organisations, we have already conveyed a simple but crucial message to you and EU leadership: a dedicated increased CAP budget is not merely a matter of financial support, but a strategic investment in Europe’s future resilience and security.     [Good luck with that call given the other demands on EU funds and the still disproportionate share of EU finding that goes on the CAP.]

It was also one of the key conclusions of the Strategic Dialogue that were delivered to you last September: the multiple transitions required for European agriculture can and will only be achieved 

Agri-food may stand in way of new EU trade deals

Professor Alan Matthews provides an authoritative and informative analysis of Trump tariffs and the EU agro-food sector.  Although originally published in February, it largely stands the test of time, other than for the ease of imposing tariffs on US spirit exports: http://capreform.eu/trump-ii-tariffs-and-the-eu-agri-food-sector/

As the EU seeks to expand and diversify its trade deals, it is evident that concerns about agriculture are a potential obstacle to its scope of action.   Discussions with Australia collapsed in 2023 over beef exports, although they could be revived after its general election next month.

Notwithstanding von der Leyen’s ambitions to secure new deals, the recent history of EU trade talks underscores how difficult it will be to consummate meaningful alliances.  Brussels has struggled to clinch agreements in recent years because of sensitivities in its 27 member states over agricultural products. 

Although the bloc has a €63bn trade surplus in agri-food, it does not want to allow more chicken, beef and sugar in after huge protests by farmers over the past two years. France and several other countries, for example, have yet to ratify a deal with Canada signed in 2016 because it would allow more beef imports. 

Paris, Vienna and The Hague have yet to back the Mercosur accord, saying they need greater protection for farmers, although it contains a mechanism to choke off imports if there is market disruption.

EU budget format changes and their implications for the CAP

Proposals for changes to the EU budget format that could affect the CAP are discussed in depth by Professor Alan Matthews: http://capreform.eu/fitting-the-cap-into-the-next-mff-long-term-budget/

Both the Budget and the CAP are very complex and technical issues so considering them alongside each other is almost mind blowing, even for those with some expertise in the area.

However, the take home message from Professor Matthews is: 'there is limited scope to improve the effectiveness of CAP spending by redesigning the MFF, which reinforces the need for a greater focus on the CAP regulations themselves.'

The underlying issues are very familiar and have been around for decades.   Nevertheless, they require fresh consideration.