Europe's farm chief yesterday (2 June) asked EU ministers to decide whether future agricultural subsidies should be used to provide 'public goods' or bolster incomes, particularly at times of financial strain.
"Public goods", an imprecise term used at the informal meeting of EU farm ministers, potentially refers to both foodstuffs and environmental stewardship.
EU Agriculture Commissioner Mariann Fischer Boel said the concept should certainly be explored while debating reform of the EU Common Agricultural Policy (CAP) in future, but first needed to be properly defined.
At a time of volatile commodity prices, Europe requires the right support for its farmers so crises do not lead to disaster for Europe's agricultural production base, she said, especially when the world needs to produce more food to guarantee supply.
Fischer Boel told ministers that countries held differing views about the purpose of farm payments, whose role and definition would anyway have to change after 2013, when the Common Agricultural Policy (CAP) would be reformed for the EU's next seven-year budget period.
"I am convinced that in the future CAP we should go on keeping a common system of direct payment which provides an income safety-net for farmers," she told the farm ministers.
Earlier this week, she told reporters that food security was another reason to maintain a certain level of farm payments, otherwise land could be abandoned in regions with poor soil quality.
After the meeting, French Agriculture Minister Michel Barnier said that CAP "has to preserve food security of supply, high-quality food and economic activity in rural areas, which has to do with agriculture".
"Farming is an economic activity that has particular requirements, it is not just about direct support. But we need to have the means to intervene, especially when we have a crisis as we do now in the milk sector," Barnier added.
Ironing out the huge farm payment disparities between EU countries after 2013, a major concern for "newer" member states that mostly do worse in this than the old EU-15, was also a priority, the ministers decided at their meeting. Average levels of EU direct farm payments vary widely: Greek farmers, for example, receive some €600 euros a hectare of arable land, whereas Latvia's farmers get under €100.
Czech Agriculture Minister Jakub Sebesta told the press that "there are differences in direct payments between countries and regions. If that continues after 2013, it would make the system difficult to defend".
Where payment levels should be set was still a very open issue, Fischer Boel said, as well as whether and how subsidies should be linked to payments to deliver "basic public goods".
A system where payments were linked to the delivery of public goods had to sustain farming in large areas of Europe and avoid more intensification of farming that could cause serious environmental, economic and social consequences, she added.
If the EU's future payment system were to phase out income support for farmers, "we would have to consider whether some other income support would be needed to replace the current income safety-net that direct payments provide," she said.
Fischer Boel plans to issue a menu of general reform options in the second half of 2010, followed by formal legal proposals for discussion and negotiation by EU ministers in mid-2011.
Sweden pushes for reform
Sweden's Agriculture Minister Eskil Erlandsson told the press that "further reforms of the CAP are needed". Sweden will take over the EU's rotating presidency from the Czech Republic on 1 July, for a six-month period.
"This should be guided by market orientation, consumer demand, environmental concerns, deregulation and lower expenditure. I also want to see an increased focus on rural development," Erlandsson added.
(EurActiv with Reuters.)
Copa-Cogeca, the EU farming lobby, notes that European farmers cannot maintain their competitive position when faced with an EU policy of opening markets up to imports, and at the same time meet high EU sustainability standards if their direct payments are constantly being cut.
It notes that meeting these high standards means higher production costs for EU farmers compared with most of their competitors, and that the CAP payments enable EU farmers "to cover the costs of sustainable farming in the face of fierce international competition without going out of business".
The European Landowners Organisation (ELO), a federation representing the interests of landowners, land managers and rural entrepreneurs, is actively promoting the concept and awareness of public goods generated by private businesses: farmers produce food that they sell, but at the same time they contribute to protecting resources, biodiversity and the cultural landscape, for example.
ELO cited as another example a beekeeper who produces honey for his/her own commercial purposes, but whose activity at the same time contributes to pollination and thus biodiversity.
"If markets don't remunerate producers of public environmental services, we must find other way to support these services," said Corrado Pirzio-Biroli, ELO's EU adviser and ex-head of cabinet of former Agriculture Commissioner Franz Fischler.
If private business is not economically viable, then the whole system of private businesses delivering both private and public goods will be unsustainable, ELO argues.
The International Federation of Organic Agriculture Movements (IFOAM) EU noted that while the EU farm ministers have effectively identified the challenges that agricultural policy is facing - guaranteeing food availability while halting biodiversity loss, climate change, water scarcity, energy supply and price volatility - "serious steps to tackle these challenges must follow in order to make the 2013 reform of the CAP a real success".
"In all the last [CAP] reforms, the steps to make agriculture more sustainable have been nothing but small. Ministers need now to make a serious effort if they want to make the new CAP in 2013 a success," said Thomas Dosch, IFOAM EU's vice-president.
- Second half of 2010: Commission to issue a menu of general CAP reform options.
- Mid-2011: Commission to submit formal legal proposals on detailed CAP reform for negotiation by EU ministers.