Big Two back CAP reform
German Chancellor Gerhard Schröder and French President Jacques Chirac said they would back a partial decoupling of aid for farmers linked to production from 2006 onwards.
France is the biggest beneficiary of the CAP’s eu €45 billion annual budget and Germany contributes the lion’s share of funds. Berlin apparently agreed to support France on CAP reform in return for French backing of German opposition to EU plans for a takeover code.
Farm Commissioner Franz Fischler warned, however, that the substance of his reform plan must stay in place.
He hit out at the Franco-German agreement, arguing that a half-baked reform would led to the explosion of the whole system within the next decade.
“It cannot be that two member states decide for the other 13 countries,” he said.
EU farm ministers resumed negotiations in Luxembourg on Tuesday afternoon, having failed last week to agree compromise proposals by the Greek presidency.
They were hoping to seal a deal before EU leaders start their three-day summit near the Greek city of Salonika today.
But France warned on Monday it would be “very difficult” to reach an agreement before the end of the week and that Paris would not be hurried into a deal.
Speaking in advance of the resumed negotiations, Minister Joe Walsh said despite progress on many of the technical aspects of the proposals, he continued to have major concerns in relation to core aspects of what he described as the most fundamental proposals for reform of the CAP since its inception.
Minister Walsh said the proposed full decoupling of payments from production would have serious consequences for farming in less favoured areas and for the processing sector.
The fall in agricultural activity would be detrimental to the rural economy in many parts of the country.
He also indicated that the combined effect of modulation and degression of direct payments, currently worth €1.3 billion to Ireland, would siphon off a total €460m from direct payments in the period 2006 to 2012.
The proposed additional reform of the dairy sector would undermine a sector recovering from a difficult year in 2002.
Minister Walsh said reform of the dairy sector agreed under Agenda 2000 had yet to be implemented and he was not convinced of the necessity for any further adjustment of the regime at this stage.
The Minister said the current negotiations were complex and their outcome would be far reaching insofar as the future support framework for the agriculture sector will be determined.
Mr Walsh said his objective will be to protect the gains achieved under Agenda 2000 and ensure a policy framework which will ensure the sustainable development of an agriculture and food sector into the future and provide the basis for a vibrant rural economy.
The Irish farm lobby, again had a strong presence in Luxembourg to monitor the negotiations. IFA president John Dillon warned of “a slippery slope to re-nationalisation of the CAP, which would lead to major conflict between member states“.
The ICSA leader John Deegan warned that closer alignment between France and Germany is likely to result in a decision that is detrimental to Irish farming. He again called on Minister Walsh to reject partial decoupling.
An emergency meeting of the ICSA national executive committee in Portlaoise on Monday night endorsed fully the view that there should be no change in its position regarding the mid-term review.
Mr Deegan said from day one ICSA has been consistent in its argument that full decoupling is the best solution for Irish farmers.
Dessie Boylan, ICOS president, said the dairy sector is strongly opposed to any further milk price cuts. It was essential that milk direct payments remain coupled to quota up to 2015.
“ICOS is opposed to a decoupling of milk direct payment after the reform is completed in 2008, as this will slow down restructuring and could take up to €100 million of direct payments from active milk producers.”
ICMSA president Pat O’Rourke said he was convinced a better deal for Irish farmers can and must be achieved even if the issue has to go to the Heads of Government meeting starting today in Greece.
He added that he was surprised that Minister Walsh had given a figure of €460 million as losses to be incurred. The total loss was in the region of €1.7 billion when all the proposed cuts were taken into account.
