The European Parliament’s Agriculture Committee wrote a letter to the Commission on Friday (17 April), calling on the EU executive to intervene on the market so that farmers avoid further losses as a result of the coronavirus pandemic. However, as money is scarce, the Commission is hesitating. EURACTIV Germany reports.
MEPs sitting on the Committee on Agriculture and Rural Development (AGRI) wrote a letter to the European Commissioner for Agriculture, Janusz Wojciechowski, asking the EU executive to activate emergency clauses and directly intervene on the agricultural market.
While the measures taken so far are undoubtedly helpful, they are “clearly not enough”, according to the letter, seen by EURACTIV.
In the missive, the AGRI committee calls on the Commission to use the emergency instruments in the common market organisation (CMO) “as soon as possible”. This would enable the Commission to intervene on the market by buying products to prevent a fall in prices, to allow private storage of goods in parallel and to reallocate funds within agricultural sectors.
In addition, MEPs are calling on the EU executive to tap into a previously unused emergency reserve for farmers, which currently amounts to €478 million and is typically disbursed through direct payments. Those direct payments should be made to farmers who have been particularly hard hit by the pandemic, the MEPs said.
Agriculture suffers from a missing catering industry
Because gastronomy has currently come to a standstill and supply and transport chains are disrupted, many agricultural sectors are suffering massive income losses. The flower sector is particularly hard hit, according to the agricultural lobby association Copa-Cogeca. The sector employs around 760,000 people across the EU and has lost up to 80% of its turnover, it said.
But the fruit and vegetable sector, as well as beef producers are also feeling the effects of the catering industry’s collapse, while milk prices are falling at the same time.
In order to help farmers, the Commission had proposed a broad package of measures on 2 April, which includes the possibility of granting farmers favourable loans, increasing advance payments for direct EU subsidies and extending deadlines for payments and administrative reports to EU authorities.
Little money left in the EU’s budget
On Wednesday (15 April), Wojciechowski attended a meeting of the Parliament’s Agricultural Committee and discussed with MEPs possibilities for further action.
It was a tense discussion. On several occasions, Wojciechowski stressed that the Commission was looking into all possibilities to make additional money available, but that available funds in the EU budget are “almost exhausted”.
“We must think about the budget,” the Polish commissioner added, saying this is why there was little room for the Commission to intervene directly on agricultural markets by buying up certain commodities.
This was met with criticism from many MEPs. “I wouldn’t have expected you to come here and tell us that you don’t have any money,” said Irish MEP Mairead McGuinness of the European People’s Party (EPP).
Instead, the Polish Commissioner proposed to use money from the second pillar, where there would still be around €6 billion available. Such a proposal, however, is unlikely to convince EU member states in the Council, as they have allocated different sums of money to rural areas.
“Those who have not done their homework and still have money left over from the second pillar would particularly benefit from this. I, therefore, do not believe that this proposal will receive much support,” the Chairman of the Agriculture Committee, Norbert Lins, told EURACTIV.
In the letter he wrote, Lins instead advocates for the use of a much smaller but easier to distribute emergency reserve. This would mean lower direct payments but would reach farmers by other means.
France sits on 40 million litres of milk
As the emergency reserve of €478 million is unlikely to be sufficient, Lins asked for using money that is not part of the EU’s farm budget, to ensure the financing of market interventions.
“We have these well-established instruments such as market purchases and private storage and criticise the Commission for being so reluctant to use them,” Lins said in the interview.
Led by France, some agriculture ministers have already spoken out in favour of market intervention. In a letter written this week, 14 MEPs have asked the Commission to urgently introduce a mandatory volume reduction in the dairy sector to stabilise milk prices.
In France, milk producers have already accumulated an unsold surplus of 40 million litres.
However, to provide longer-term support to farmers, MEPs say more funds will be needed from the EU’s next seven-year budget, the Multi-annual Financial Framework (MFF).
“We are waiting for a new MFF that takes sufficient account of agriculture and we are counting on you to implement it,” the letter from the AGRI Committee concludes.
(Edited by Frédéric Simon)