CAP proposals cut aid and maximise production

By Laura Crowley

- Last updated on GMT

Related tags: Farmers, Common agricultural policy

The Common Agricultural Policy (CAP) health check proposals made by
the Commission yesterday are directed at streamlining the policy
and helping farmers respond to increasing demands.

The original CAP was developed in the 1960s amid problems of low farm incomes, food insecurity and reliance on imports, low productivity of European agriculture, and instability of agricultural markets. It was last reformed in 2003. The aim now is to meet the needs of an evolving international situation, where food shortages, high food prices and climate change have become ever more pressing issues. The changes include maximising production capabilities, reducing assistance to large farms and moving away from direct subsidies linked to production in favour of money for rural development and programmes protecting the environment. The CAP health check has been a hotly debated subject since last November, when the Commission announced it was to adapt the rural payment system, which costs more than €40bn per year. "The health check is all about freeing out farmers to meet growing demand and respond quickly to what the market is telling them,"​ said Mariann Fischer Boel, commissioner for agriculture and rural development. "It also aims to simplify, streamline and modernise theCAPand give our farmers the tools to handle the new challenges they face, such as climate change." ​The Commission's proposals will be put to the ministers of agriculture from all European states at a meeting in Slovenia next week. Following this, they will be discussed at monthly meetings until an agreement is made. Michael Mann, agriculture spokesman for the European Commission, told FoodNavigator.com a decision is expected by November. Proposals ​The Commission has proposed to abolish the requirement for arable farmers to leave 10 per cent of their land fallow. This would mean farmers could increase production to meet the growing demands for food. The CAP currently suggests decoupled direct aid to farmers - that is, payments that are not linked to production. However, some member states have established coupled payments. The Commission proposes to get rid of the remaining coupled payments and shift them to the Single Payment Scheme, except where it concerns suckler cow, goat and sheep premia. According to the Confederation of the Food and Drink Industries of the EU (CIAA), this will "decrease the competitive distortion between farmers..., reduce administrative costs, and enhance sustainable fruit and vegetable production". ​ Furthermore, proposals suggest that subsidies to wealthy farms be progressively cut and funds to helping programmes involved in climate change, renewable energy, water management and biodiversity. At the moment, farmers receiving more than €5,000 in direct aid have their payments reduced by 5 per cent and the money goes into the Rural Development budget. The proposals seek to increase this rate to 13 per cent by 2012, with additional cuts for bigger farms. The plan also calls for milk quotas to be gradually increased. The quotas were first introduced in Europe in 1984, restricting the volumes dairy farmers could turn out to curb over-production. The quotas are to be phased out by April 2015. To ensure a smooth transition, the Commission has proposed five annual quota increases of 1 per cent between 2009/2010 and 2013/2014. Response to changes ​The proposals have received some mixed responses. Although welcomed on the whole by most, Britain considers the current issue of high food prices means farming subsidies are unnecessary and wanted more radical reform. Hilary Benn, the British environment secretary, said the health check should "phase out all the price support measures which have kept consumer prices high and the export subsidies which have undermined farmers in developing countries"​. He added that it "must cut the bureaucracy and remove the market controls and production linked payments which have hampered the competitiveness of farmers, so they can respond to the growing global demand for food." ​She also said there should be more emphasis towards protecting the envioronment. However, France thinks soaring food prices mean farm supports are more important than ever. Michel Barnier, French agriculture minister, is quoted by Agence France Presse​ as saying: "The food crisis gives us a reason to preserve [the] production capacity that we have inEurope."

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