CAP reform trump cards
With more diverse lobbies than ever to be satisfied in this round of negotiations, it will be well into the negotiations before the commissioner can afford to show any sign of unravelling in his plans.
Any sign of weakness would be pounced on by member states, MEPs, taxpayers, and farmers.
Usually, the final outcome has about 80% of the commission’s original proposals. But there are so many factions ready to tear those proposals to shreds this year that a different outcome is possible.
Certainly, it seems futile to agonise over details of the proposals, because everything will be up for grabs — and the details will in any case depend on the implementation phase of the negotiations, after the main political agreement.
It is the first year that MEPs have co-decision powers with heads of state. Both groups will be looking over their shoulders at increasingly restless EU taxpayers carrying the burden of financial austerity. By the time negotiations get into their stride, that burden could be even heavier.
Hence the proposals from the commission which seem to pander as much to taxpayers as farmers.
That’s fair enough, bearing in mind that EU taxpayers have been willing to compensate EU farmers for their high production costs, which are basically due to high EU wages, and much stricter environmental and animal welfare rules than elsewhere.
But there have been signs of that willingness weakening. There was pressure in Brussels in 2009 to cut CAP spending by as much as 30%, and use the money saved for innovation to revive the struggling EU economy, or for a separate policy on climate change.
Nevertheless, times change, and the European Commission instead proposed last year to freeze the CAP budget, but with a promise that agricultural policy can address issues such as climate change and innovation.
Commissioner Ciolos has admitted his objective is to keep all of the CAP budget instead of losing it to, for example, environmental policy.
In the midst of global economic mayhem, farmers breathed a sign of relief when it was proposed to freeze rather than slash farm spending.
The commission no doubt also had in mind heads of state, horrified at the prospect of increased support for farmers having to come from their shrinking national treasuries rather than from Brussels.
That is one of the trump cards for farmers in the upcoming negotiations. They must drive home the message that CAP spending from Brussels can keep the wheels of the food industry turning. That is an especially strong message in Ireland, where agri-food is seen as one of the best shots at pulling the country out of recession, despite its relatively small size in our economy.
Throughout the EU, the sector is seen as important for economic recovery. In Germany, there are 550,900 food industry workers, making it the fourth largest industrial sector.
The BVE national association of the German food industry has warned that too little attention has been paid in the reform of the CAP to raw material supply for the food industry, and that the proposed ecological focus for 7% of farmland could worsen the food supply and price situation.
The food industry accounts for up to 10% of EU jobs, and it depends on raw material from farmers, many of whom rely 100% on CAP support. Against that background, when EU budget negotiations get serious in the second half of this year, EU heads of state will be keen to leave strong farm support managed at EU level. But they will have to do it in a way palatable for taxpayers, and acceptable against the economic background prevailing later this year.
