Food crisis set to weigh on CAP reform

"There are some who say that high prices can constitute an opportunity for farmers since high prices should encourage increased production and yield greater profit for them. On the other hand, high prices are a serious problem for net importing countries, especially developing countries," commented Slovenian Agriculture Minister Iztok Jarc after the meeting. 

UK Agriculture Minister Hillary Benn argued that maintaining or raising support schemes for agricultural production "would be a mistake". And UK finance minister Alistair Darling recently called for an end to "all elements of the CAP that are designed to keep EU agriculture prices above world market levels," saying it was "unacceptable that at a time of significant food price inflation, the EU continues to apply very high import tariffs to many agricultural commodities". 

But France rejected the idea that liberalising trade was the solution and said Europe must instead become self-sufficient in food. "The solution to the crisis is not, first of all, through free trade," said French Agriculture Minister Michel Barnier. 

He insisted that the food crisis highlighted the persistent need for the CAP, which he said represents the "cornerstone of the continent's food security". "If you remove the tools for regulating and stabilising markets, as the Commission is proposing to a certain extent, and if you dismantle all agricultural aids, we will no longer have a Common Agricultural Policy," he cautioned. 

He instead suggested exporting the European model to promote food security to other parts of the world, including developing areas like North Africa, where neighbouring countries could help each other in the same way as EU countries do (EurActiv 29/04/08). 

Speaking to ministers at the Council, EU Agriculture Commissioner Mariann Fischer Boel sought to ally concerns about the rising food prices, saying they would not last in the long run. "Prices are likely to fluctuate in the medium term around a level that is higher than what we have seen in recent decades," she said. "But we do not think that the record levels reached in recent months are likely to persist." 

She further dismissed French ideas to increase protection for European food production. "I am not interested in a protectionistic approach to the agricultural production in Europe - a Fortress Europe, if that is the idea. It might be beneficial in the short run, but extremely dangerous in the long term. And it would contrast completely with the negotiations we have at the World Trade Organisation, the WTO. It's about more open markets, more competition," she said in an interview with Danish daily Politiken on 19 May. 

She nevertheless insisted that "the CAP is still the right tool to provide the right level of support to farmers in times of crisis and to sectors with special problems, such as farmers producing milk in disadvantaged regions". 

But she noted that "regardless of what protection we offer to farmers, it is paramount to me that the measures act like a safety net and not a comfortable chair". 

Copa-Cogeca, the EU farmers’ professional organisation, warned that it would be "precipitous" to make any major changes to the EU’s agricultural policies amid the current "changing global environment". 

"There are indications that the era of abundant supplies of agricultural commodities is changing and we are moving into a period of not only rapidly increasing food demand, but also much greater market volatility for agricultural commodities," it warned, adding that this means that "the CAP of the future may need to place more emphasis than in recent years on ensuring that Europe's agricultural production capacity is optimised so that its 500 million citizens are ensured stable and secure supplies of food, produced to the highest standards of safety and sustainability, and that the EU plays its role in meeting world demand." 

In a document issued on 19 May, it therefore argues against full decoupling of farm payments from production and called for price intervention mechanisms for cereals to be maintained as "an important safety net at times of serious disruption on the world market".