Leaked documents - European CAP reform a whitewash

[Gerrard Winstanley]

Leaked documents suggest European CAP reform just a whitewash
>From Wikileaks
http://wikileaks.org/wiki/Leaked_documents_suggest_European_CAP_reform_just_a_whitewash

Big farms get taken care of, dairy farmers unhappy

TEGINDER SINGH (New Europe, Issue 782)
Monday May 18, 2008

Source document: EU Common Agricultural Policy proposals - "CAP Health
Check" (2008)
http://wikileaks.org/wiki/EU_Common_Agricultural_Policy_proposals_-_%22CAP_Health_Check%22_%282008%29

European Union agriculture ministers meeting this week in Brussels are
set to rubber stamp a middle path of not antagonising major
beneficiaries like Germany and France while keeping the hopes of free
market advocates like United Kingdom alive with cosmetic reform
proposals to the EU’s Common Agricultural Policy (CAP). The alarm for
urgent need for CAP modification was sounded earlier last week when
Joaquin Almunia, European Commissioner for Economic and Monetary
Affairs said prior to a meeting of Eurozone finance ministers: “For
the weakest sector of our society, inflation is the main problem. They
are suffering a loss of purchasing power, and must pay more for food
and other necessary goods.”

Among the measures that governments can take to help their poorest
citizens is an improvement to “the functioning of our common
agricultural policy (CAP),” he told journalists, adding that the EU
should also promote measures aimed at tackling “tension” on the
international commodity markets. The CAP, one of the most
hotly-debated policies in the EU, is going to pay out nearly 43
billion Euro in 2009, which amounts to more than one-third of all
payments going out of EU coffers. Although there was a CAP reform in
2003 to slash subsidies, but with food prices in the 15-member
Eurozone now rising at an annual rate of six percent, market analysts
predict dire straits ahead.

According to leaked documents ready for presentation at the “Health
Check” of CAP on May 20, “First indications from the assessment of the
2003 reform are in general positive, and indicate that a fundamental
reform of the CAP for the remaining horizon of the present financial
perspectives (until 2013) is neither necessary nor desirable.” Another
two major areas of concern directly affecting farmers are “set-aside
obligation” and “milk quotas.” The document states: “Removal of the
set-aside obligation would likely bring back into production an area
corresponding to roughly half the area currently under mandatory
set-aside. It has been suggested that the environmental benefits of
set aside could be retained by introducing a fixed percentage of total
area as an “environmental compensation/priority” area, containing
certain landscape features.

According to a reliable source who wanted to remain anonymous, there
is allegedly a compromise on the ceiling of individual farmers earning
more than 300,000 Euro where the beneficiary stands to lose 70 percent
of the subsidies while those earning lower amounts will lose far less.
The earlier proposal was to drastically cut the subsidies to big farms
but the pressure from lobby groups seems to have paid off, the source
pointed out. On the subject of milk quotas, the document is more
critical saying, “Milk quotas hold back the sector from achieving the
objectives of CAP reform since they still reflect concerns of two
decades back, instead of responding to present opportunities.” “In
terms of agricultural markets, the phasing out of milk quotas and
removal of set-aside will allow the farmers to better respond to
market situations.”

The milk farmers claim that they will lose up to 300 million Euro from
these cuts and they want the system to continue, but there is also
friction between old 15 and new 10 farmer lobbies and that is
affecting the proposals. Moreover, on the subject of disposal of
pesticides to farmers, the European farmers are facing tough
challenges as the number of active substances is going down with the
new REACH regulations coming in whereby companies are reluctant to do
the necessary tests for all pesticides as its cost and time consuming.
The agriculture insiders predicted that even with compromises already
agreed, the ministers are set to have a bitter political battle as
each side tries to prove that the food crisis makes its preferred
policy the only safe one to adopt. The two divergent view point were
crystal clear as the British Finance Minister Alistair Darling wrote
to EU counterparts saying it is “unacceptable that, at a time of
significant food price inflation, the EU continues to apply very high
import tariffs to many agricultural commodities,” while Germany’s
Agriculture Minister, Horst Seehofer, argued that “we have to make
sure that we can provide this continent with food sustainability.

This cannot be done by taking away subsidies from European farmers.”
The CAP, a complex and expensive system of subsidies designed to
protect European farmers’ interests, has often been blamed for keeping
European food prices artificially high. With world markets booming, it
is time for Europe to remove quota system and go for liberalisation of
the European markets which in turn will help bring down the prices but
the documents said, “The continuation of present CAP policies shows
that the current policy framework, as reformed in 2003, contributes
positively to fulfilling the principal CAP objectives.”

First appeared as: http://www.neurope.eu/articles/86833.php