8/3/11

Options for EU's common agricultural policy reform in the European Union

  
Τρίτη, 08 Μαρτίου 2011 12:11
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The issue of rising food prices was on the agenda of the January 2011 Economic Forum which took place in Davos Switzerland. This issue is also currently debated in the EU as it relates to the need for reform of the Common Agricultural Policy (CAP).The CAP has evolved through the years ,. but was originally developed to boost food production and slow down the exodus of the rural population to urban areas.  By the 1980's the problem was overproduction rather than shortages. Over the last 20 years the CAP has dropped most of its price support schemes in favour of direct payment to farmers based on the size of their farms.   However , rising farm prices has meant a further change in policy emphasis and reform. The major objectives of the reform are a safe and sufficient food supply, and the sustainable development of natural resources in rural areas
The debate on EU’s future agricultural policy is taking place at a time when world food prices are high. There is no doubt that CAP must evolve in order to help EU farming meet the market's changing needs and weather the economic crisis.
In broad terms there are two current tendencies representing different interests of member states. The United Kingdom and Germany's approach emphasising environmental objectives and research on technology, contrasts with that of France , other Southern EU member states and of the 12 new member states supporting the old price-support schemes.
Every year Euro 57 billions , more than 40% of the EU budget is spent on the agricultural sector. In addition to costing billions of Euros a year, CAP distorts trade by keeping prices artificially high . It is unacceptable that at times of significant price inflation the EU continues to apply high import tariffs to many agricultural commodities. Therefore budget constraints and rising food global demand and prices make imperative a policy shift towards reducing subsidies.
The outcome of the debates is uncertain but if direct payments are maintained then it is essential that any changes should help farmers meet the challenges of global population growth and climate change A central point of the reform debate is to deal with budget constraints and to overhaul the distribution criteria for payments to farmers in order to take into account the EU's eastern enlargement. . Other options being considered is to link direct payments to environmental and food security goals, subsidies to smaller Easter European farmers and increased funding for agricultural research and development.
Consultations are under way along with the assessment of the impact of various options considered. This will feed into proposals for legislation which are expected to be adopted in   2011.
Given that budget constraints make almost certain a policy shift towards reducing subsidies, it is imperative for Greek policy makers and industry representatives to intensify participation in the reform debate to preserve as far as possible Greece's share in a reduced subsidies budget and maximise its participation in agricultural development research.

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