French lead battle against price cuts in marathon talks
The French negotiators who collapsed the talks last Thursday will make the proposed cuts of up to 25% one of their prime targets in this week's resumed bargaining.
The French are the key to a successful conclusion of the CAP Mid Term Review, having threatened last week to veto any agreement which did not meet their approval.
Farm policy negotiation is not normally subject to a national veto, though an unwritten rule states that member states will not outvote a country that cites "vital interests".
French President Jacques Chirac had made clear to the Greek government holders of the rotating EU presidency that he was willing to invoke the veto.
But he was outmanoeuvred after the farm talks were adjourned, when he joined fellow EU leaders in Greece.
Mr Chirac's expertise in farm matters far outstrips that of any of the other EU leaders which was probably why they refused his request to make the proposals an issue at the summit in Thessaloniki.
So it is up to his Agriculture Minister, Herve Gaymard, to lead resistance this week to the European Commission's plans to lower intervention prices.
Under yesterday's compromise offer tabled by the European Commission, direct payments for cereal and cattle and sheep farmers would be completely decoupled from production levels, except for "specific problem areas" where there is a risk of farming being abandoned in the absence of EU subsidies.
For such areas, 25% of subsidies would be linked to production. EU member states themselves would decide which areas qualify.
For cereals, France and Spain are demanding a 30% figure, already on the table for cattle and sheep farmers.
"The compromise isn't enough," said Spanish Agriculture Minister Miguel Arias Canete, whose country, like France, is a leading beneficiary of EU farming subsidies.
"There will have to be additional progress if we're to reach an agreement," he said.
Belgium, Ireland, Finland, Italy, Luxembourg, Austria and Portugal have also rejected the compromise plan.
A spokesman for German Agriculture Minister Renate Kuenast said: "We are quite close to a fundamental reform of the CAP."
But with a nod to France, she said "It wouldn't make sense to adopt a reform without the biggest agricultural nation in the European Union".
Agriculture Commissioner Franz Fischler has been engaged in round-the-clock contacts in a bid to reform the CAP subsidies that consume nearly half the EU's annual budget of €90 billion.
He is under severe pressure to get an agreement, not least because the World Trade Organisation (WTO) says CAP reform must be completed before the Doha Round of WTO can resume, in turn allowing multi-billion trade-offs in industrial tariffs and market access for non-farm items, and in investment, competition policy and procurement.
"Negotiations are essentially stalled while we wait for the Europeans to complete their internal reforms and to see whether that will allow them to bring some flexibility to the negotiating table, " said International Trade Minister Pierre Pettigrew last Sunday in a WTO progress assessment meeting in Egypt, where 30 trade ministers met.
Australia's Trade Minister Mark Vaile said he is concerned that the French President is watering down the proposals for agricultural reform within the EU.
"We continue to encourage as much reform as possible in the EU as far as the CAP is concerned," said Mr Vaile.
