EU farm ministers seen split on food chain rules

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An ideological split over European Union regulation of agricultural markets could prevent farm ministers from agreeing on measures to boost the power of producers in the food chain at a meeting in Brussels on Monday (29 March).

EU nations that favour strong intervention by Brussels – led by France – want to give producers more power to negotiate favourable prices for their goods with suppliers and retailers, who they regard as having too much influence over farm prices.

Options floated by the EU executive and backed by these countries include possible changes to EU competition rules to allow producers to jointly agree prices for their produce, or the mandatory use of standard contracts in the food supply chain. But opposition from a handful of more liberally-minded countries – led by Britain and Sweden – is expected to block agreement on the plans.

Thanks to the split a resolution on the issue, due to be adopted on Monday, will contain few concrete proposals, a draft seen by Reuters shows, and may not get the support of Britain and others.

The European Commission would then have to decide whether to table legislative proposals implementing its plans, despite the lack of consensus among EU governments.

Jobs and growth

The role of the EU farm and food sector in boosting European growth and job creation will feature in a debate on the Europe 2020 strategy (see EURACTIV LinksDossier).

The strategy aims to define how Europe will improve its global competitiveness over the next decade while tackling climate change.

It also sets the stage for negotiations on how to allocate hundreds of billions of euros in the EU's next long-term budget for 2014-2021.

Some governments, politicians and farm lobbies keen to defend the common agricultural policy's (CAP) current 40% share of the budget have complained that farming is not mentioned in the strategy, and hope to change that before it is finalised.

EU presidency holder Spain has asked ministers to discuss "the need to ensure that the strategy does not interfere with or call into question the funding of Union policies such as the CAP," which could expose rifts with countries that want to cut EU farm spending.

Ministers will get a report from the Commission on the current situation in the EU dairy market, following last year's crisis in the sector.

The EU executive is expected to deliver an upbeat assessment, with latest official figures showing average producer prices have risen to about €0.28 per litre, close to the long-term seasonal average.

EU financial aid for dairy farmers of €300 million ($399.6 million) agreed in October is expected to be paid out in the coming weeks.

(EURACTIV with Reuters.)

With food prices hitting exceptional highs in 2008, the European Commission decided in May that year to open an investigation into the causes of such sharp increases. The EU executive decided to better monitor developments in agricultural commodity prices, analyse the impact of speculation on prices and investigate the functioning of the food supply chain.

After a year-long inquiry into the food supply chain, a Commission report published in October 2009 concluded that there were "significant imbalances" in contractual relations between actors in the food supply chain. Tensions stem from differences in bargaining power, which may lead to unfair trading practices, it said (EURACTIV 29/10/09).

EU-27 farm ministers agreed in January to push for measures that would ensure all actors in the food supply chain, and particularly farmers, receive fair compensation for their work (EURACTIV 19/01/10).

  • Late summer/early autumn 2010: Commission expected to issue menu of CAP reform options.
  • Mid-2011: Commission expected to submit formal legal proposals on detailed CAP reform for negotiation by EU ministers.

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