Stakeholders prioritise outcomes over process

The Government has issued a response to the EFRA Committee report on its consultation document on domestic agricultural policy after Brexit: Response

The Government praises itself for the extent of its engagement with stakeholders on the trajectory of policy and certainly there is a lot of interest and concern from many different quarters on its future direction and content. Stakeholders are interested in outcomes not process and what those will be remains to be seen.

Defra states that, 'It is incorrect to say that there have been minimal discussions between Defra and the Treasury over the future funding of the new agricultural policy. We have been in regular contact with HMT at both ministerial and official level.'

Again it is not the regularity and level of contacts that matters, but the content of those contacts. We are now in a period where the end of austerity has been proclaimed alongside continued fiscal responsibility. The reality is that it is politically difficult for the Government to increases taxes, but it has pledged substantial new funding to the NHS before one even starts to think about, for example, the needs of the police and the prison service.

Spending on agriculture is likely to be squeezed over the coming years. Normally reliable sources suggest that the Treasury is happy with the direction of travel of policy towards payments justified by public goods arguments. However, they are not impressed by food security arguments, although they are interested in the possibilities of a new technological revolution.

What is still largely missing is any link between agricultural policy and health policy in relation to issues such as obesity. Healthy eating is an interest of large sections of the population, not least younger voters.

The Government's view is that 'eating healthily is ultimately a consumer choice'. This is true, but that choice can be guided and that is what Public Health England is trying to do, possibly sometimes in too hectoring a tone.

The Government argues, 'We take the view that the market remains the best way to reward the production of good-quality food. Paying farmers to produce healthy food would not necessarily result in the desired outcome of a wider contribution to public health. Farmers may be the wrong target to incentivise consumers to eat healthy food, especially where primary produce travels through the supply chain via food processors and manufacturers before it is turned into the final product that consumers purchase.'

Whilst there is something in these arguments, policy needs to go beyond a reliance on the market mechanism. For example, there is a climate change argument for eating less meat. We need to ensure that there is a good fruit and vegetable supply at an affordable price. Of course, that raises much wider questions about the roles of the state and the market.

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?

Parliament delays CAP reform process

The decision by the European Parliament’s agriculture committee (ComAgri) to delay a vote on laying out its official position on CAP reform until the beginning of next year once again brings into question whether an agreement can be made in time for the new policy to be implemented by the start of 2014. Indeed, for some time I have thought this very unlikely.

Although an official date for the vote was never set, it was generally considered that one would need to take place either this month or next in order for the Farm Council to have enough time to reach a consensus on its own reform package, and then for ‘trilogue’ talks to be held between EU institutions that will finally result in an agreement for the 2014-2020 CAP budget, reports Agra Europe.

MEPs have made it clear that they will not be pushed into approving the next CAP until the EU’s next long term budget is in place and the generally negative feedback from the Cypriot Presidency’s recent proposal to shave €7 billion off the bloc’s multiannual financial framework (MFF) for 2014-2020 is not an encouraging sign that heads of state will come to a firm agreement by the end of the crunch summit on November 22-23.

Those calling for a freeze or cut in real terms to the EU budget will have seized on the recent European Court of Auditors report, which again found that large sums of budget funds in 2011 were misspent, with rural development spending coming in for particular criticism. This is likely to increase the vulnerability of this form of expenditure to cutbacks given the importance of the single farm payments to the revenue streams of most farmers.

With austerity biting across the EU, and distrust in the institutions growing among the electorate, particularly in the UK, it must now be time for the European Commission to push through improved measures of accountability and transparency on how funds are being spent.

Completing CAP reform on time

In this week’s issue of Agra Europe, editorial director Chris Horseman, who is one of the most experienced and knowledgeable observers of the CAP, suggests that the deadline of January 1, 2014 for the new CAP could be missed unless EU leaders can conclude the Multiannual Financial Framework negotiations by the end of this year.

Horseman argues that the crux of the problem is the fact that MEPs have taken the view that they are not in a position to pass judgement on how CAP spending should be allocated in 2014-2020 if they do not know how much overall spending will be available. Therefore, the need for their Council counterparts to agree a financial framework to provide funds for the Single Farm Payment system becomes an imperative.

However keen the European Commission may be to keep the negotiations on the reform of the CAP and on the future MFF technically separate, the two issues are politically inseparable, Horseman says, before exploring the ramifications and potential scenarios instigated by the deadline for CAP reform being missed.

It has been my view for some time that the deadline would be missed and that January 2015 was a more likely date. It has also been my view that the involvement of the European Parliament would slow down the process and make reform more difficult to achieve. The requirements of a democratic process mean that it should be involved, but the effect on outcomes may be less desirable.

The crux of the issue is that when European domestic governments are practising austerity, and are likely to do for some time to come whatever the calls for a growth strategy, it becomes increasingly difficult to justify the share of the EU budget devoted to the CAP. There is a high 'opportunity cost' in terms of money that could be spent on infrastructure projects that would help employment and research and development that would enhance Europe's flagging competitiveness.

Even within the farm budget there is a strong case for spending more on applied research which would help European agriculture to meet food security challenges in a sustainable way much more than blanket subsidies.