Fischler explains CAP reform to agricultural chairs
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CTA. 2003. Fischler explains CAP reform to agricultural chairs. Agritrade, June 2003. CTA, Wageningen, The Netherlands.
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Agriculture Commissioner Franz Fischler addressed the chairs of...
Agriculture Commissioner Franz Fischler addressed the chairs of the agricultural committees of 25 EU parliaments on May 19th 2003 in order to explain why CAP reform was necessary and to address some common concerns. Two main reasons were given: the need to simplify the whole system for the benefit of everyone; the need to promote more effectively wider policy objectives such as rural development, food quality, animal welfare, environmental protection and the stewardship of the countryside. Commissioner Fischler pointed out that money to finance further reform would need to be generated from 'modulation' (i.e. directing farm payments to where they are most needed by capping and reducing payments to larger farms) and 'degression' (i.e. the slow reduction of direct aid payments) within existing systems of payment. However he maintained that this would only effect a minority of EU farmers (mainly the larger ones). He noted the opposition to de-coupling of farm aid payments but argued that de-coupling was essential so as to make the CAP less complex and more market orientated and in order to strengthen the EU's hand in the WTO negotiations. He pointed out how the system of single farm aid payments based on historical reference would help maintain the value of support at a constant level, and that according to an OECD study the new system would allow more money to end up in the pockets of farmers than the alternative system. Commissioner Fischler took the opportunity to argue against partial de-coupling for the following reasons: the driving force of policy would then still be coupled payments, which undermines the principle focus of reform which is to give farmers more freedom to decide what to produce in response to market signals; running the two system in parallel would be more complicated; it would undermine the EU position in the WTO which would be strengthened by fully de-coupling. He argued that 'if we are able to adopt the whole package at the June agricultural council, we will strengthen our negotiating position in the WTO'. With reference to the sectors not yet subjected to reform, he pointed out that the Commission intends to submit proposals on the cotton, tobacco and olive oil sectors by early autumn and that while these proposals had not yet been formulated, they would 'follow the general lines of the present proposals'. Comment: The Commissioner's comments on partial de-coupling constitute an attempt to limit the extent to which the Commission's current package of proposals is watered down. However it is aware that in certain areas partial de-coupling will need to be accepted in order to gain the support of certain member states for the reform package. The announcement that for sectors not yet subject to reform new proposals would 'follow the general lines of the present proposals' is a clear indication that the ACP can expect a general decline in EU agricultural market prices as CAP reform is rolled out to all sectors. This will have important consequences both for the value of preferences and for the price competitiveness of EU exports. The impact is likely to be greatest in the sugar sector.
- CTA Agritrade