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EU’s #agriculture sector faces yet another crisis

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agriculture-euToday, more than 50 years since the Common Agricultural Policy (CAP) came into force, the consensus is that the EU’s agriculture sector is facing yet another crisis and desperately needs a re-launch, writes Martin Banks.

The CAP started functioning in 1962 and was the first collective policy of the European Community. Its main idea is the partnership of the agricultural sector with the citizens of Europe with its farmers.

The EU will start public consultations early this year on the future of the CAP, with a paper on how to simplify and modernize the CAP due before the end of 2017. The talks on a future CAP will run alongside talks on Brexit, which the EU said must wind up by October 2018 to allow time for the European and UK parliaments to vote on a deal.

In the run up to last June’s Brexit referendum, the UK farming minister George Eustice broke rank with the government and argued that British farmers would be better off out of the EU. It illustrated a feeling that farmers in the UK, and elsewhere, are fed up with meddling from Brussels over the best way to grow food.

The current CAP runs up to 2020, until the end of the bloc's long-term budget, and is worth around €56bn a year to farmers across the bloc.

But by the time the current CAP runs out, the UK will have left the EU, leaving less money in the bloc's coffers. There are several ideas in the ether about how to aid farmers under a new CAP.

Take, for example, EuroCommerce Director-General Christian Verschueren, who has called on EU agriculture ministers to help structural reform to create a sustainable agriculture sector rather than resort to “empty policy gestures.”

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“We know that agriculture is going through a very difficult period, and retailers have sought to give farmers real help. We need a diverse, healthy and competitive farming sector able, now and in the future, to provide Europe’s 500 million consumers with the varied, quality food they need and want.”

“Europe’s leaders will do hard-working farmers a real disservice if they focus on legislative gestures rather than helping them address the structural problems they face,” Verschueren said.

In a letter to Agriculture Council President Gabriele Matečná, EuroCommerce has called on EU governments to develop concrete policies that address these structural issues, help agriculture to become better organised, more responsive to market signals and to consumer demand.

A recent report by an independent task force suggested EU-level rules on unfair trading practices, including a ban on late payments to farmers, obligatory written contracts with suppliers and price reporting all along the food supply chain.

It also suggested channelling more EU subsidies into offsetting future risks, and said the European Investment Bank should do more to help farmers access loans.

Aside from budgetary issues, the EU’s agricultural policy is also mired in controversy elsewhere, namely the use of glyphosate, a widely used herbicide. Breaking with regulatory agencies in Europe and the U.S., the World Health Organization’s cancer research arm slapped a “probably carcinogenic” label on the herbicide in 2015, pushing European NGOs and Green groups to lobby hard the European Commission to lift its market authorisation. While the International Agency for Research on Cancer (IARC) has no formal role in the European decision making process, and the body’s methodology is flawed as it only looks at hazard irrespective of exposure levels, its glyphosate assessment divided European states. France and Germany strong-armed the European Commission to extend the pesticide’s market authorization for a temporary period of 18 months – due to lapse by the end of 2017. This very uncertainty over re-authorising use of the chemical is thought to have been a decisive factor that drove many British farmers to vote Leave in the 23 June Referendum.

UK farmers supported joining the EU in 1975 but what is seen as “meddling by Brussels” has soured relations since.

The current debate on glyphosate starkly illustrates how CAP straddles a great policy divide, from agriculture to food safety.

Set up to feed post war Europe at stable prices for producers and consumers, by the early 1980s, the CAP was swallowing 70 percent of the community budget. Surpluses grew so large they had to be taken off the market and stored for long periods in giant warehouses at taxpayers’ expense. Some were sold off at subsidised prices to the former Soviet Union and developing countries.

Then farmers were paid to dig up their vines, reduce their herds and leave land fallow. Eventually, the link between subsidies and production was cut, but farmers still receive EU payments for maintaining the countryside and producing high-quality food.

Today the Common Agricultural Policy still guzzles 40 percent of the EU budget. That level of spending will not fall significantly before 2020.

Many agree that the sector needs action now but there are varying rules in place to protect farmers in 20 EU countries and an additional problem is that EU rules take years to come into effect.

CAP is the policy that has driven many of the sector’s changes over the last 50 years.

But most agree that the CAP is now at a crossroads.

With talk of a breakup of the EU, many will hope that the latest CAP reform will not only help Europe’s farmers but also relaunch agriculture as a pillar of the European project itself.

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