Franz Fischler

I name Franz Fischler as a politician I admire on one of my other blogs: Fischler

New farm boss faces confirmation battle

The European Parliament always likes to assert itself by refusing to confirm one or two nominated commissioners in its confirmation hearings and the designate new farm commissioner Dacian Ciolos could be in their sights as the youngest and least experienced of the nominations. Although nominally an independent, he has been embraced by the centre right European People's Party, but they could easily drop him if the heat is turned up.

He got the nomination despite a late push by 'old' member states to nominate Ireland's Marie Geoghegan Quinn who was acceptable to France. However, they had left it too late to get the nomination for their candidate. Finland's Olli Rehn and Slovenia's Janez Potocnik were also in the frame at one time, while the favourite for a while was Latvia's Andris Pieblags who had shadowed Franz Fischler in 2004. To many it was a surprise that Ciolos got the nomination.

There have been complaints that Ciolos is 'too French' in the sense that his postgraduate education was undertaken in France and that his family and France's Michel Barnier's family are personal friends. He also has a French wife whom he met when both of them were trainees in DG AGRI. Ciolos was in fact appointed a director in DG AGRI earlier in the year, but was not able to take up the post.

His defenders argue that he is committed to a 'modern concept' of European agricultural and rural development policy in line with Commission thinking.

The appointment of John Dalli as the new Health Commissioner is also significant for farm policy. His appointment was perhaps even more surprising than that of Ciolos. Although the 61-year old is a big name in Malta where he was the longest serving Minister of Finance, he is less well known at a EU level.

DG SANCO will now take over responsibility for GMO cultivation and pesticides which currently resides with unit D.4 in DG ENVI. It is thought that this is because Commission president Barroso is looking for a more scientific, depoliticised approach to the GM debate.

Dalli has no prior experience of the food safety and animal health issues for which he will now take responsibility.

Cross-compliance is not delivering

Cross-compliance has no clear objectives, does not reflect the 'polluter pays' principle and is not being properly enforced, and is therefore not providing concrete diversity promotion, according to a new report. Published by Birdlife International it is entitled 'Through the green smokescreen. How is CAP cross compliance delivering for biodiversity.' It can be found here: Birdlife

Birdlife highlights that some of the biggest burdens imposed by cross-compliance are perversely felt by extensive livestock producers, i.e. the production systems which are most important for biodiversity and for which subsidy levels are usually lower than more intensive farms. It advocates a complete and urgent overhaul of the whole system and the need to realign the whole CAP to the principles of Rural Development.

Scotland 'on message' on farm subsidies

Scotland is far more in tune with current thinking on farm subsidies in mainland Europe than England and Wales, claims Scotland's rural affairs minister Richard Lochhead.

Addressing farmers at a Christmas Carcass competition in Inverurie, Mr Lochhead brought them glad tidings about the deep divide in agriculture policies on the two sides of the border. 'My opinion on CAP reform is very different from DEFRA's view that all direct subsidies should be removed and we should rely on a free market. Scotland should not go down that route and our thinking is much closer to the mainstream of Europe which is that the pendulum is swinging back towards support for active agriculture.'

The minister felt that outgoing farm commissioner Mariann Fischer Boel didn't envisage that pendulum swinging too far, ruling out headage payments, but new commissioner Dacian Ciolos could bring in a new era.

There are certainly those in Brussels who think that Ciolos will favour more market support and help to smaller farms. However, others take the view that he is on message with the Commission view on reform and has been playing down his linkages with France to reassure pro-reform countries.

However, Christmas has come early for some English farmers, with over 80 per cent of farmers receiving £1.3bn in Single Farm Payments to date. That's approximately £15,116 per recipient. Not quite a banker's bonus, but welcome all the same. Organicduck tweeted from Devon, 'Hurrah and thank you RPA. Maybe off Christmas shopping or maybe pay off some overdraft.' Payments are also well advanced in Wales and Scotland.

New farm commissioner a setback for reform

The appointment of Romania's Dacian Ciolos as farm commissioner looks like a setback for reform. Romania has a bloated farm sector and has been in trouble for its management of EU funds.

The smart money recently was on the appointment of Andreas Pilebags from Latvia. France was hoping for an Irish appointment, but then swung behind Ciolos who undertook his postgraduate study in France.

CAP budget report has been 'binned' - or has it?

A controversial draft report which advocated cutbacks in CAP spending after 2014 has now been ditched according to Farm Commissioner Mariann Fischer Boel. She denied having backed the report which called for agriculture to account for a lesser share of the EU budget that it does at present. Fischer Boel claimed that the paper was now a 'non paper' and was 'in the bin'.

However, the position may be a little less straightforward than it appears. It was a small group of Commission President Barosso's advisers that drafted the review with his explicit approval. With Barosso back for a second term it is quite likely that the final version of the budget review document, to the tabled in the New Year, will contain views not dissimilar to those in the draft, including linking Single Farm Payments more closely to the provision of public goods.

Budget Division sources indicated that just how much the CAP's budget will be reduced is still up for grabs, but considerable cuts are considered to be necessary to focus spending on other higher priority investment areas. These include climate change and the promotion of growth and jobs.

A new style CAP

A group of agricultural economists has launched a new attempt to reform the CAP with an emphasis on public goods provision: CAP

G-21 an anti-reform bloc?

At various times in the history of the CAP, member states have formed informal groupings to address particular issues, e.g., 'the Aachen Five' and the agri-monetary system. The G-21, in effect led by France, is a much larger grouping which constitutes a qualified majority in the Council.

It become the G-21 rather than the G-20 at a meeting in Vienna when Greece joined. This left only the four leading reform countries (UK, Denmark, Netherlands, Sweden) outside the grouping, plus Cyprus and Malta - countries that have small farm sectors and may not have thought it worth the time and effort.

It's evident that this grouping forced the Commission to climb down on the Milk Fund issue and allocate an extra €280m to dairy farmers. This decision was apparently taken by Commission President Barrosso rather than by farm commissioner Mariann Fischer Boel.

A real concern is that this grouping could constitute a basis for mobilisation against further reform of the CAP.

Budget directorate wants to cut CAP

Leaked copies of a document from the European Commission's budget directorate reveal an aspiration to substantially cut agriculture's share of the EU budget from 2013 onwards.

The paper says that it is too early to see what the future reform of the CAP will look like, but argues that it should be driven by two objectives. 'Firstly, it should resolutely pursue the modernisation of the CAP, concentrating spending where it most adds value. Second, it must stimulate a further significant reduction in the overall share of the EU budget devoted to agriculture, freeing up spending for new priorities.'

The paper argues that direct aids should be reduced and linked more strongly to the delivery of public goods. A Pillar 3 should be established dealing purely with climate change.

The full communication is expect to be published in November.

Sweet tooth

The International Centre for Trade and Sustainable Development has produced a paper on how a trade deal on sugar would affect importing and exporting countries. You can read it here: Sugar

The paper finds that a significant amount of sugar trade is conducted under preferential trade agreements which encourages sugar production where it is not competitive at the expense of low-cost sugar producing countries.

The EU sugar reforms had an adverse effect on higher cost producers in the Global South such as Fiji, Guyana and Mauritius. Full access by LDCs to the EU sugar market once the Everything But Arms Initiative is in operation should help countries like Sudan to boost their EU market share.

Sarko: the answer lies in the soil

French president Nicholas Sarkozy has unveiled a €1.65bn rescue package to help French farmers cope with lower commodity prices and shore up his support among rural voters. It forms part of a broader thrust to reaffirm French 'national identity' and also to deflect criticisms over local tax reforms and allegations of nepotism in relation to the promotion of his son's career. Mr Sarkozy is facing difficult regional elections next year and needs the support of rural voters.

In a speech in the Jura, the president claimed that 'The word "soil" has a special meaning in French and I was elected to defend French national identity'. The package of subsidies is made of €1bn in subsidised loans and €650 in cuts to land and energy taxes and social charges (which have particularly hit fruit and vegetable producers weighed down by high social charges on seasonal labour).

Mr Sarkozy insisted that the plan, with its focus on tax cuts, would not contravene EU rules on state aid. He attacked the Commission for dragging its feet on proposals to help dairy farmers. French dairy farms are on average smaller than their competitors in other large member states.

The package signals a tougher stance by Paris as the EU prepares for the debate on scaling back CAP subsidies. Mr Sarkozy said that he wanted tighter regulation of the milk market from next year.

Mr Sarkozy has described a complete U turn from the first speech he made to farmers as president in 2007 when he told his audience they had to learn to make a living from market prices rather than subsidies. But now he needs to consolidate his traditional centre-right base and he has reverted to a more typical French stance.

Dairy sector measures do not set pulses racing

4000 dairy farmers with 900 tractors demonstrated outside an EU agricultural ministers meeting in Luxembourg yesterday calling for more aid for the sector. Inside, ministers faced a Franco-German memorandum backed by 20 member states with a series of demands for market distorting measures. In the event the concessions the Commission made are probably the least they could have got away with in the circumstances. Farmers' organisation COPA immediately condemned them as insufficient.

The main move was to make an additional €280m of public money available under the Article 186 'disturbance clause' which allows the Commission to step in at short notice when the market collapses. The milk market has hardly collapsed and this is something EU finance ministers may wish to consider when they meet to consider the approval of the move on 19 November.

What the money is to be spent on is yet to be decided, although private storage for cheese has been mentioned. No, this doesn't mean that members of the public can get a subsidy for filling their fridges with cheese, although anything is possible in the Alice Through the Looking Glass world of the CAP.

What is significant is what was in the Franco-German document that has not been acted upon: official intervention buying of chesse, additional funding for school milk schemes (funding for fruit yoghurt had already been agreed) and more targeted export assistance and subsidies for skimmed milk powder to be used in animal feed.

It was this last measure which had the greatest potential for damage. Commissioner Fischer Boel dismissed it by saying that she had not received any convincing evidence that it would increase demand. What it has done in the past is seriously distort other markets, e.g., for pigmeat.

The notion of freezing quotas had already been knocked off the agenda in September, a singularly ill thought out proposal which would have done nothing in the short run and delayed adjustment in the longer run.

It is worth noting that milk prices have been increasing, by 2 per cent in August while butter has gone up by 4 per cent in France, 8 per cent in Germany and even more in the UL. Intervention buying of skimmed milk powder has virtually come to a halt because the market price is higher that the intervention price.

Watchdog slams farm payments mess

In one of its most critical ever reports, the National Audit Office has slammed the way in which the Rural Payments Agency has administered Single Farm Payments to farmers. It accused the agency of showing 'scant regard to protecting public money'.
The agency has wasted around £700m, the capital equivalent of building thirty secondary schools.

The average amount paid to about 107,000 English farmers is about £15,300 a year. However, the watchdog found there were substantial overpayments totalling between £55m and £90m but the data was so unreliable the auditors were unable to find out the precise sum. £280m has been set aside to pay Brussels penalties for administrative errors and late payments to farmers, but a further £43m of overpayments are likely to be irrecoverable.

What the report brings out is the high transaction costs incurred even in a supposedly simplified system of subsidies. It is estimated to cost £1,743 to process each farmer's claim for cash, a rise of 20 per cent in four years.

It is argued that some of the problems arise from the payment system chose by Margaret Beckett, at one time in charge of Defra. The devolved regions opted for a simpler system based on historic payments made to farmers. In Scotland the cost of administering payments is £285 per farmer. However, one reason for choosing an area farmed system was to try to break away from the 'to him that hath shall be given' aspect of the subsidies system.

Of course, some might think that we would better off by phasing out subsidies altogether.

Nasty surprises in the green box

Governments are increasingly putting their subsidy payments into the 'green box' of the WTO, but there is evidence that these subsidies are harmful to the environment and farmers in the Global South. Read more here: Green box

Who will be next agriculture commissioner?

The next agricultural commissioner will have the chance to shape the future development of the CAP. So who will it be?

We can eliminate three sets of member states. By convention the post cannot go to a large member state, ruling out the UK, France, Germany, Italy and Spain (and presumably Poland).

Former Romanian farm minister Dacian Ciolos is the name formally mentioned, but indications are that a candidate from a member state with such a large agricultural population, and possible problems with the use of its EU funding, would not be acceptable. Indeed, one can rule out the new member states altogether as the only two other possible candidates - former Slovenian farm minister Iztok Jarc and his Cezch counterpart Petr Gandalovic - have now left office and are unlikely to get support from their governments.

We can also rule out member states who have appointed non-agricultural commissioners: Belgium, Finland, Luxembourg and Portugal. While it would be interesting to have someone without an agricultural background in the post, it is unlikely to happen in practice. Sweden is also thought not to want the dossier.

Given the recent election in Greece, the unstable political situation in Ireland, and no agricultural expert being discussed from those countries, they are unlikely to provide a viable nomination - although Ireland could spring someone out of the hat at the last minute: remember that Fischer Boel was a late and unexpected appointment. An Irish nominee would certainly be welcome in Paris.

We are really left with Denmark, the Netherlands and Austria. A second Danish appointment seems unlikely. If climate minister Connie Hedegaard is the Danish nominee, she could occupy a similar portfolio at the European level. Farm minister Eva Kjer Hansen is also in the frame but could get a food safety/SANCO dossier if she comes to Brussels.

The Netherlands has perhaps the best qualified candidates in the form of current agricultural minister Gerda Verburg or former minister Cees Veerman.

But the smart money is on another Austrian, former farm minister Wilhelm Molterer, even though Vienna would prefer him to have the budget portfolio. It's certainly not a done deal and there could be a last minute surprise.

Back to butter mountains?

It's a familar scenario: the milk price falls; farmers come out to the street; and the Commission starts to panic.

Following a 'milk strike' across Europe, an emergency meeting is to be held by farm ministers on October 5th. Nineteen member states have signalled support for a Franco-German initiative for an aid package for dairy farmers. However, farm commissioner Mariann Fischer Boel, insists that there is no prospect of reversing the decision to abandon dairy quotas as part of the CAP reform process.

Global prices surged in 2007, but this led to more production which came on to the market as the recession ended.

The simple fact is that there are too many inefficient dairy farmers in Europe. A slimmed down dairy sector would be more globally competitive. However, despite the opposition of Britain and Denmark, one suspects that a policy fudge is on the way.

Fischer Boel steps down

Mariann Fischer Boel has confirmed that she is to step down as farm commissioner, citing her age (66) and the wish to spend more time with her family. An assessment of her time as commissioner can be found here: Boel

The race is now on to succeed her. Ireland has already thrown its hat into the ring, although no name has yet emerged. A successful Irish candidacy would not assist reform.

Will Fischer Boel stay or go?

Agra Focus is still 60 - 70 per cent positive that farm commissioner Mariann Fischer Boel will step down. At 66, the attractions of retirement from a demanding role might seem clear. Manuel Barosso, the Commission president, would like her to stay as he thinks she is a skilled negotiator. The Danish prime minister, Anders Rasmussen, would also like her to stay to give the Danes a key portfolio.

If she does go, there will be more uncertainty about the future direction of policy. Romania is reported to be pushing for the agriculture portfolio and is receiving backing from France and Poland on the basis that a Romanian commissioner would be more resistant to a genuine reform of the CAP. Moreover, the favoured candidate, former Romanian farm minister Dacian Ciolos studied in France, has a French wife and is a personal friend of former French farm minister Michel Barnier.

However, would a candidate from a new member state with a large and inefficient agricultural sector really be favoured when CAP reform is on the agenda? Nearly 30 per cent of the Romanian population is employed in agriculture, more than five times the EU average. Another problem is tha at some stage the Commission will have to start investigating how Romania and Bulgaria have been implementing CAP aid schemes since they joined the EU in 2007. Their record in relation to the SAPARD scheme for pre-enlargement funds was none too good.

So perhaps the choice could again fall on a smaller northern member state like the Netherlands?

Consumer aversion to GM declining

Consumers are less averse to GM crops and foods than they used to be, according to results from a quarterly tracking survey carried out on behalf of the UK Food Standards Agency. See FSA

Worries about food safety in general continued a general downward trend, from 64 to 61 per cent in this quarter. The top concerns were food poisoning (47 per cent) and the amount of fat, salt, sugar and saturated fat in food (responses in the 36 to 41 per cent range). Food prices and the conditions in which animals were raised were both mentioned by a third of respondents.

GM foods ranked 22nd out of 24 concern categories with only 2-4 per cent expressing spontaneous concern, rising to 21 per cent when prompted. In the previous survey conducted in the spring thse figures were 6 per cent and 26 per cent respectively.

The news comes at a time when livestock feed supplies in the UK are under increasing threat. UK livestock farmers are dependent on soya feed imports from Argentina and Brazil. These two countries supply about 90 per cent of UK imports. But they are increasingly switching to GM production and a joint Defra/FSA report suggests that livestock feed costs could soar by 300 per cent if Europe maintains strict import rules.

Admittedly this entails a worst case scenario in which there were no imports from the two Latin American countries. Should that happen, it is forecast that there would be a 24-29 per cent reduction in UK pig production and a 10 to 68 per cent reduction in poultry production.

The report argues that the risk to food supplies could be avoided if the EU allowed a low-level preesnce of some non-EU approved GM material rather than operating a strict zero tolerance policy as at preesnt.

The situation is complicated by poor harvests in South America last season, active purchasing there by China and the halting of imports from the US after the discovery of traces of unapproved GM maize in a shipment.

Consumers may at some point have to make a choice between lower food prices and an insistence on strict GM-free standards for animal feed. This particular problem is symptomatic of more general debates about the role of technology in ensuring food supplies.

Four legs good, two legs bad

A leading scientist is the latest person to warn that the bickering over whether conventional or organic farming is environmentally superior is getting no one anywhere in mitigating climate change. In an interview with Farmers Weekly Ian Crute, shortly to become chief scientist at the Agricultural and Horticultural development board, said it was vital to reduce greenhouse gas emissions from all types of agriculture. The former director of Rothamsted Research commented, 'The notion that this is a case of organic farming, conventional farming bad, doesn't get us anywhere.'

More investment in scientific research was needed to uncover beter ways that agriculture could help in the mitigation of climate change. 'There is no good data which would say that the emissions of nitrous oxide from organic systems compared to systems which are using synthetic fertiliser are necessary any worse or any better. I could argue very strongly that efficient pest, disease and weed control using pestcides was a far greener system in terms of the efficiency with which nitrogen us used than an inefficient system using far more land and inputs inefficiently.'

NFU policy director Martin Haworth endorsed Professor Crute's comments. More money needed to be spent on research and development to address 'market failure' issues. He commented, 'We need to reduce greenhouse gas emissions from all systems and science is key.'

The comments came after a study by the Institute of Grocery Distribution (IGD) found that four out of five shoppers are turning their backs on organic produce in favour of cheaper, conventionally-produced food. They found that 10 per cent of shoppers have found alternative products offering the same perceived benefits as organic food at a lower price.

A further 8 per cent are focusing their organic spend on fewer products where they think it really makes a difference, while another 8 per cent say they are not sure what organic stands for anymore. More than 40 per cent of shoppers say they have never been interested in organic.

The hard core of dedicated organic shoppers make up nearly one in five of the UK population. They tend to be younger and more affluent. However, some of them are looking for their ethical values in products that meet high animal welfare standards, local foods and Fairtrade. Nine per cent of shoppers will buy more organic food when they have more money.

Soil Association director Patrick Holden admitted that many people saw organic as a lifestyle choice rather than a sustainable farming system. 'We need to work at changing these perceptions,' he said.