French Minister for Agriculture Herve Gaymard expressed his satisfaction at heading off the initial Commission proposals to completely cut the link between farm subsidies and production levels. He said: "Taking account of the diversity of the interests at stake, taking account of the harshness of the Commission's initial proposals... I think very honestly that this compromise can legitimately give us satisfaction."
British Minister for Agriculture Margaret Beckett said that the agreement "delivers what we wanted: real change." "It shows what we can achieve in Europe, working constructively with colleagues," said Ms Beckett. She told reporters that the compromise would set benchmarks for the September WTO talks in Cancun, Mexico. "This is a challenge to others who have to come to those talks. It's a challenge to them now to move, because the EU has moved substantially."
Head of the World Trade Organization, Supachai Panitchpakdi, welcomed the EU's decision to reform the CAP. He expressed his expectation that the EU's agreement would revive stalled WTO talks on agriculture.
US Trade Representative Robert Zoellick and Secretary of Agriculture Ann Veneman gave a cautious welcome to the EU's compromise. "We hope that the compromises that altered the original Commission proposal do not limit the EU's ability to contribute to global reform in agriculture," they underlined in a joint statement. They urged Brussels to submit its negotiating proposals for the three core areas of WTO agriculture negotiations: reducing domestic support, eliminating export subsidies and cutting tariffs.
The Organization for Economic Cooperation and Development (OECD) stated that the reforms could reduce European food prices in the long term but would not offer relief to farmers in Africa and Latin America who cannot compete with Europe's subsidized exports. Luis Portugal, an agriculture expert at the OECD, said: "This is a step in the right direction, but it's a very small step."
COPA-COGECA, the largest farmers' association in the EU, lamented the compromise deal. "This is the most dramatic reform we have ever had and it undermines the CAP and the future of agriculture. The competitiveness of European agriculture is in danger," the Presidents of COPA and COGECA, Peter Gaemelke and Marcus H. Borgstrý said in a joint statement. They said that the reform would create "uncertainty and distortions of competition between farmers, between sectors and within sectors, between regions and Member States." COPA-COGECA warned that the reform could increase production costs above market value and force farmers to stop production. It urged the EU to "make it clear in the WTO negotiations in Cancun in September later this year that this is a final offer."
The European Farmers Coordination (CPE) called the deal a "scandal" and a "swindle", arguing that the decoupling would accelerate the disappearance of family farmers. "The small and middle farms will not resist the price falls and decoupling will have perverse effects of agricultural abandonment in the disadvantaged areas, where there will be no economical interest anymore to produce for farm prices below the production costs. Then Decoupling is clearly an anti-rural development measure," said CPE in a statement.
Head of the French farmers union FNSEA, Jean-Michel Lemetayer, accused the EU of "abandoning assurance of farmers' incomes."
German farm union DBV leader Gerd Sonnleitner stated that the new compromise will mean income losses of between 1.2 billion and 2 billion euros for German farmers. According to Mr Sonnleitner, it will also fail to stop the production of surpluses and it will discourage further investments.
British charity group Oxfam criticised the deal. Oxfam argued that farmers in the developing countries would still have to compete against heavily subsidised European exports to their home markets. Sam Barratt, a researcher at Oxfam, stated: "Farmers will continue to produce more than we need and will continue to dump it on the developing world."
The European Environmental Bureau (EEB) expressed disappointment over the weakening of the Commission's original proposals for CAP reform, deploring the lost opportunity for structural change towards sustainable agriculture. "The first proposal in July 2002 gave us hope that a real move was taking place towards sustainable agriculture. The legislative proposal in January this year was already disappointing, having lost the teeth of the first proposal. Now, the result of the negotiations of the council is even more disappointing. What is left are bits and pieces of a reform package, making it more complicated and hardly effective", said John Hontelez, Secretary General of the EEB.
International environmental organisation WWF called the reform deal "half-hearted" and accused the EU of "lack of commitment for an environmentally sustainable European agricultural policy." While recognising that some gains for the environment have been secured, WWF laments that progress is "painfully slow".
BEUC, the leading European consumer organisation, said the the farm ministers' decision on CAP reform was "a bad outcome for consumers and the EU as a whole." According to BEUC, "European consumers will continue to have to pay to dump food surplus on the world market; agricultural policy will continue to be dominated by the interests of a few, rather than serve the interests of the community as a whole; rural development will not be granted the support it needs; global negotiation will be much more difficult with the EU trying to defend the indefensible."
Consumers International, which represents 250 consumers organisations in 115 counties worldwide, expressed its "deep disappointment at the so-called reform" of the CAP . Consumers International Director General Julian Edwards said: "This deal is another magician's trick, a real sleight of hand, by EU agricultural negotiators. It has nothing of substance to offer consumers in the developing world, in the European Union or the accession countries. Without a greater commitment to EU reform, there are no incentives for other countries, including the USA, to tackle tariff barriers and subsidies at the WTO Ministerial. This deal is anti-development, anti-trade and anti-consumer."
Food Policy International (FPI) called the deal "but a pale shadow of the rigorous blueprint for change, first launched by EU Agriculture Commissioners Franz Fischler in mid 2002." FPI Editorial Director Brian Gardner argues that the deal will prevent the development of a free internal agricultural market because farmers will still be heavily influenced in their production decisions by subsidy decisions rather than by market forces. FPI warns that the implications of the deal are serious for both the EU itself and international trade. "Production of commodities currently in surplus such as beef, butter and wheat will continue unabated. Because much of the domestic support apparatus is now to be retained, the EU will have to maintain high import tariffs and export subsidies," according to Mr Gardner. He adds that this will prevent the EU from making concessions on the main focus of the WTO negotiation: import tariffs and export subsidies.
BirdLife International, an international nature conservation organisation, said that the outlook for Europe's biodiversity "still looks grim" under the agreed CAP reform.
CAOBISCO, the Association of the Chocolate, Biscuit and Confectionery Industries of the EU, stated that the CAP reform deal "showed little progress on the commitment to create competition within European agriculture." David Zimmer, director general of CAOBISCO, said: "The spirit of reform is gone. For too long we have supported European agriculture at the expense of European manufacturing, European consumers and fair access to our markets by farmers from the poorest countries of the world. Partial reform removes jobs from the European Union and will mean we are all paying more for our foods."
The Confederation of the food and drink industries of the EU (CIAA) hailed the agreement as a "major breakthrough for the agri-food sector". CIAA is convinced that the deal will improve the EU's position in WTO negotiations. "The agreement reached yesterday is in line with the long term objective of the EU food and drink industry to promote a competitive, efficient and more sustainable agriculture in Europe", said Jean Martin, President of CIAA.
According to the Organisation for Economic Co-operation and Development (OECD), food prices in the EU are 44 per cent higher because of the CAP than they would be under normal market rules. Agricultural measures consume 45 billion euro or half of the EU budget annually.