New CAP can make EU farming profitable, Spanish farmers say

Spanish farmers see the new CAP as a big challenge. [Stéphane M. Grueso / Flickr]

This article is part of our special report The main challenges facing the CAP.

Spanish farmers consider the new Common Agricultural Policy (CAP) as an opportunity to cut red tape and make environmental measures more efficient. But in order for EU farming to become more profitable and sustainable, structural reforms are needed.

According to Spanish farmers, the new CAP poses a big challenge: provide farmers with a more efficient and dynamic framework to allow them to better manage the market and at the same time confront crises like the Russian embargo or the end of milk quotas.

New CAP is still struggling to find new export markets

Agriculture Commissioner Phil Hogan has launched a “diplomatic campaign” to find new markets for EU products. But external trade complexity and an unbalanced internal market pose serious challenges for the executive.

The new CAP could be also a good tool to tackle price volatility and increase the competitiveness of the EU agri-food sector, they noted.

Red tape burden

Bureaucracy and administrative simplification are “hot” issues for the new CAP.

Reducing red tape would help farmers comply with the ‘greening’ (environmental) requirements of the new CAP, and also the new norms contained in trade agreements between the EU and third countries to better optimise the EU’s production model.

In their view, the new CAP can also help reach out to new markets and support the process of resizing and concentration of the agri-sector to make it more competitive.

Focus on structural reforms and cooperatives

Gabriel Trenzado, International Relations Director of “Cooperativas Agro-Alimentarias” (agri-food  cooperatives), told EFE that an “open debate” should be launched on what sectorial management market instruments the EU needs to better address price volatility.

“We think that the CAP should focus on structural reforms”, Trenzado said, adding that the target should be a more concentrated sector. “The agri-sector should be more dimensioned to make it profitable,” he stressed.

For Trenzado, a stable environment until 2020 is necessary, and the simplification of the CAP should be administrative but not political.

“However, this red tape cutting shouldn’t be an alibi to implement a premature reform,” he said, adding that the EU should look for new markets and forge a “big pact for the agri-sector”.

In his view, it would be essential to work in incentives for the concentration and economic organisation of the production sector.

But in order to achieve that, he emphasised the role of cooperatives.

However, cooperatives in Spain have a big structural problem. If they are strong enough, they increase their chances to compete in the markets, but smaller ones are faced with a number of problems.

Ignacio López, International Relations Director of the association of young farmers (ASAJA) told EFE that two of the most important challenges which lie ahead are “focusing more on the production sector, making it more profitable and visible along the full agri-food chain and also fighting against market volatility”.

‘The EU wasn’t ready’

He noted that the Russian embargo indicated the EU’s “tremendous dependence” vis-a-vis market fluctuation. “It is important to have a CAP with market and profit regulation mechanisms in case of unexpected crises”, he added.

“The liberalisation and deregulation processes in the markets had strong effects, but the EU was not able to respond in a fast, adequate and urgent way,” he underlined.

Spain´s farming sector successfully adjusted to the greening requirements of the CAP, but according to López, more can be done with more simplification measures.

CAP: Still a work in progress

In June 2013, politicians approved the first major reform of the Common Agricultural Policy (CAP) in a decade, following months of haggling over quotas, subsidies and measures to improve environmental accountability.

This should be only “an adjustment not a reform”, he explained.

Regulated markets and subsidies

Miguel Blanco, Secretary General of the COAG, which represents a wide range of farmers’ associations, stressed that the current and future CAP should focus on market regulation measures.

“The CAP should return to policies setting new criteria on quality and food security, and the environment protection,” he noted, adding that subsidies policy without regulating the markets will be just a “temporary solution”.

For COAG, the 2014-2020 CAP is the most bureaucratic ever and reducing red tape is key “to simplify current management of checks and requirements of farmers”.

“Greening should be revised”

The Union of Small Farmers and Breeders (Unión de Pequeños Agricultores y Ganaderos, UPA) believes that the current criteria on greening should be reviewed as they do not match with the situation in Spain regarding fallow, ratios or diversification.

“It would be useful to revise the amount limits for the coupled aid measures because they are a great instrument to confront sectorial crises”, a UPA spokesperson told EFE AGRO.

The UPA spokesperson also stressed that the Russian embargo highlighted the importance of opening up new markets for the EU and exposed the weaknesses and vulnerability of the European farming sector vis-a-vis political decisions made outside the sector.

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