France and Germany need more time to resolve CAP reform dispute

The French President Jacques Chirac and the German Chancellor Gerhard Schröder said they needed more time to resolve their dispute over the EU’s agricultural policy reform. They set themselves the deadline until the EU’s Copenhagen European Council in December to find a compromise on changing the funding of the Common Agricultural Policy (CAP).

What changes should be introduced to European agricultural policy with the next CAP reform?

 

France and Germany are at the opposite ends of the debate on
the CAP reform. Germany would like the CAP expenditure, in
particular direct subsidies for farmers, to be cut before the EU
enlarges to 10 largely agricultural candidate countries. France
wants to preserve the CAP as it is and is not willing to discuss
any reform before 2006 when the EU's 2007-2013 budgetary framework
is to be adopted.

The French and German leaders will review the
progress on farm talks at the Brussels European Council on 24-25
October, where the EU leaders are expected to agree on a common
negotiating position on the financing of enlargement. Under the
current Commission's proposal, subsidies for farmers would
gradually be 'phased in' in the new Member States, starting at 25
per cent upon joining in 2004.

According to The Guardian, a secret memo from
the British department for rural affairs says that the UK would be
ready to back a Franco-German compromise on CAP "if it contained a
very specific and bankable commitment by the French to degressivity
[cutting the overall budget] from 2007." "If a deal emerged which
effectively dropped decoupling from the mid-term review
negotiations, we would clearly need to consult our ministers before
agreeing," the memo says.

The British government later denied it was ready
to dilute its demands for radical reform of the CAP if France and
Germany struck a deal on the issue. Environment, Food and Rural
Affairs Secretary Margaret Beckett wrote to the Guardian, denying
its story. "We are not preparing to back down from the demands for
a radical overhaul of CAP," she wrote. "We have consistently said
that our problem with the reform package is that it does not go far
enough."

On 14 October, the EU Ministers of Agriculture
discussed the Commission's proposal of the CAP mid-term review
which proposes decoupling subsidies from production in favour of
more funding for rural development. Most of the ministers supported
a strengthening of the rural development, the so-called "second
pillar" of the CAP, but several delegations stressed the need to
maintain a strong "first pillar" (Common Market
Organisations).

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