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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.
Focus on issues

The post-2020 CAP: Italy pleads in favour of countercyclical aid to Commissioner Hogan

Momagri Editorial Board

April 17, 2017

While a public consultation aimed at modernizing and simplifying the Common Agricultural Policy (CAP) post-2020 was launched on 2nd February by the European Commission, proposals from agricultural organizations, parliaments and member states are multiplying.

In this regard, Italian Agriculture Minister, Maurizio Martina recently sent Commissioner Phil Hogan a document, produced in cooperation with Italian regional and agricultural organizations and outlining Italy's priorities for the future CAP
1. In fourth place at the European level for the value of its agricultural production, Italy’s stance is eagerly awaited as they have shown willing to managing risk by being one of the few member states (along with Hungary and the Spanish province of Castilla-Leon) to announce that they want to implement a mutual fund for economic risks (under article 39 of the 2nd pillar, this instrument is also called the IST (income stabilization tool) in the framework of the current programme.

This guidance document, which will undoubtedly call for clarification, draws up a more than mixed assessment of the Common Agricultural Policy. Be it crisis management or measure for rural development Minister Martina calls for more efficiency: “The recent market crisis has shown that current crisis management instruments are obsolete, costly and unable to provide adequate, timely and effective responses”, and regarding the second pillar “it is essential to avoid periods of blocking public funds and a serious discontinuity between consecutive programming periods”.

Concerning risk management, Italy seems to have drawn conclusions from the failure to implement mutual funds. For the Italian Minister, “the risk management measures transferred to the second pillar of the CAP with the 2014 reform are not yet widespread because they are too complex and ill-suited to protecting farmers’ incomes”. It is therefore necessary to create “new risk management tools in the context of direct payments”, and even speaks of countercyclical payments ('pagamenti anticiclici') as the evolution of coupled payments.

Moreover, well placed to talk about it, Italy seems to want to promote the regulation methods in place for the wine, fruit and vegetable sectors. They want the rules of these specific common market organizations (CMOs) to be based on producer groups with investment budgets and the means to improve the adaptation of supply to the needs of the market, to be extended to the milk, meat, grain and rice sectors. In this way, a "third pillar of the CAP" would emerge, in which producers would find the means to better organize themselves so as to reduce economic risk.

Ultimately, this document addressed to Phil Hogan is proof that the current version of the CAP needs to be reviewed and that the deployment of counter-cyclical aid is part of the solution envisaged by a growing number of CAP stakeholders. The latest proposals for the post-2020 from the European Centre for Young Farmers (CEJA) are another example
2. What are the reasons for such success? By abandoning decoupling, these subsidies are more reactive and adapted in times of crisis and are best suited to meet the objectives of market regulation and the stabilization of incomes, as championed by Momagri.

1 http://www.regioni.it/news/2017/04/06/ministero-delle-politiche-agricole-alimentari-e-forestali-riforma-pac-2020-(...)
2 http://www.jeunes-agriculteurs.fr/ceja-a-finalise-programme-prochaine-pac/

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Paris, 26 May 2017