A new vision for agriculture
momagri, movement for a world agricultural organization, is a think tank chaired by Christian Pèes.
It brings together, managers from the agricultural world and important people from external perspectives,
such as health, development, strategy and defense. Its objective is to promote regulation
of agricultural markets by creating new evaluation tools, such as economic models and indicators,
and by drawing up proposals for an agricultural and international food policy.
  True CAP reform still remains to be seen

By Jacques Carles
Executive Vice President, momagri

While in Cannes the G20 confirmed the proposals put forward in Paris in June for an increase in production to ensure food security for the planet, the CAP reform presented on 12th October by the European Commission seems to be a temporary measure aimed at simply meeting a budgetary status quo rather than being a motivating project for Europe. However, ambitions displayed last year during the European Commission’s communication on the CAP in 2020, gave hope that the directions to be taken would be up to the challenges ahead, including that of food security. But the elections of 2012 and 2013 seem to have deterred European leaders from truly reforming the CAP. Again, the lowest common denominator prevails. Optimists will say that the real reform will be a matter for future elected governments in France, Germany, Italy, Spain, etc… or even the European Parliament elected in… 2014.

Worse, this wait-and-see position does not exclude the implementation of new provisions, such as the greening of some of the aid, opening up a Pandora's box of another weakening of the agricultural world.

Can European agriculture afford to wait? No! It is urgent to get out of this impasse. True CAP reform remains to be seen. In the coming months, momagri will be presenting an innovative reform plan adapted to the challenges of the 21st century .

Initial ambitions to bring hope to farmers...

After the Public Forum, opened in April 2010 by Dacian Ciolos on the future of the CAP, which finally reopened the debate on the role of agriculture, the Commission set three main challenges for CAP reform: food security, territorial balance, and finally the environment and climate change. The Commission also presented specific objectives to meet these challenges: contribute to farm income and control variations, improve the competitiveness of the agricultural sector, compensate areas subject to specific natural constraints, ensure the implementation of sustainable production practices, promote green growth through innovation, pursue actions to mitigate climate change, and support employment and preserve the social fabric.

… but unreal proposals.

If these goals seem pertinent, the currently proposed instruments will not enable us to achieve them, particularly since no solution has been proposed to solve the problem, though central, of the high volatility of agricultural prices. Without regulation mechanisms for price instability, which has devastating effects on farmers and the food processing industries, none of the objectives that have been set can be achieved.

As it stands, the current proposal will serve the dismantling of CAP initiated in the 1990s.

- The Convergence of some of the new Member State’s SPSs to old Member States was a long-awaited political gesture. It is however necessary that its application takes into account the specificities related to production and geographical conditions.

Far from providing additional means, the Commission proposes a budget that appears constant, but in reality, the Commission now endorses the principle of gradually eroding SPSs.

How can SPS sustainability, which represent nearly 60% of the first pillar of the CAP go unquestioned? It is time to prepare for this debate in order to consider alternative proposals.

- The announced objective of 30% of funding to be used for greening is a dangerous illusion as long as the proposed criteria are disconnected from reality. This can only lead to a reduction in income for most farmers. At a time when Europe’s competitors are working to increase production, this measure raises the double question of its impact on reducing European agricultural production and the competitiveness of European farmers. At a time when simplifying the CAP is being called for, there is a major risk of increasing procedures and reinforcing bureaucracy.

It must also be one day recognized that farmers are the first concerned by environmental protection. Without farmers, who is going to look after our land? The preservation of rural areas is therefore only possible if we maintain our agricultural activity, which will not be sustainable in a context where farmers have to bear higher expenses than their competitors.

- The creation of a reserve of 3.9 billion euros (current prices) for crisis management seems trivial. This was supposed to be a safety net to be activated in the event of significant market disturbances, but this reserve will only be able to fulfil its role if a regulation policy is implemented to prevent crises or attenuate them while there is still time. When we know that grain prices can vary by more than 10 € per tonne in a single day, the equivalent of the total of this reserve, we realise that these funds become rapidly insufficient in the event of major agricultural crises.

Public storage is marginalized. But even if it triggers a lot of controversy among experts, it offers a real lever to prevent crises and reduce the volatility of agricultural prices. The storing of durum wheat and sorghum will be stopped; public stocks of beef, barley and corn will be optional. Public storage will be overseen by volume and price mechanisms and will remain for soft wheat, butter and milk powder. Subsidies for private storage are also present in the Commission’s proposal for a number of eligible products, under market conditions that remain to be determined.

-The apparent maintenance of the agricultural budget was a prerequisite for building a new Common Agricultural Policy, but not an end in itself. The objective that should be pursued consists of having enough budgetary manoeuvring space to deploy a policy that prevents and treats market imbalances without overrunning the multi-year financial framework.

Yet, the opposite might ultimately happen. The provisional budgets contained in the Commission’s proposal which do not contain market regulation mechanisms, will not withstand a scenario of repeated crises due to price volatility, natural hazards, or international incidents.

In the event of incidents, the European Commission should therefore start doing their job and propose a reform plan that ensures market regulation and the stability of agricultural incomes.

True CAP reform remains to be seen.

Momagri have developed an alternative plan that will stabilize farm incomes to a level of production consistent with the objective of strengthening food security, without exceeding the multi-year budget envelope proposed by the European Commission.

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Paris, 17 June 2019