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.

momagri CAP
Personal account

The Committee of the Regions wants more trade regulation in the future CAP

momagri Editorial Board

On May 4, 2012, the Committee of the Regions––the European Union’s advisory assembly of regional and local representatives––adopted the draft opinion introduced on January 31 by René Souchon, President of the Auvergne Regional Council, regarding the European Commission’s proposals for the future CAP1.

While the document reaffirms the Commission’s objectives for the CAP, it nevertheless considers that the proposals put forward by Dacian Ciolos on October 12, 2011, are still “too removed from the CAP sweeping reform that is required to ensure the competitiveness of European agriculture and rural areas.”

Specifically, the Committee of the Regions feels that the reform must provide more room for regulation, “to ensure stable prices for farmers.”

In fact, the current context of agricultural price high volatility threatens the stability and level of farmers’ incomes. The trade regulation mechanisms and support measures, which formerly prevailed in the CAP, have progressively been dismantled during previous reforms, making farmers increasingly exposed to market instability. Yet, the Commission’s proposals are not fundamentally questioning this rationale of general dismantling.

Accordingly, the Committee of the Regions is “disappointed” by the regulation measures proposed by the Commission, adding, “While market stabilization is part of the Lisbon Treaty, the Commission does not provide any effective public mechanism to manage production.”

While the Commission’s proposals are certainly including the creation of a €3.9 billion reserve (current prices) to manage crises, this “safety net”, to be activated in cases of serious market disturbances, appears quite paltry considering the turmoil that will challenge agriculture, should regulatory measures fail to be implemented to prevent such crises, as outlined in one of our earlier articles2.

In this respect, the Committee of the Regions thinks “the Commission is making a strategic mistake by backing a posteriori crisis management at the expense of up-stream regulatory intervention, which would fight price volatility in an effective and less costly manner.”

What we are dealing with here is one of the most meaningful flaws of the Commission’s proposals. In the current context of serious disturbances in agricultural trade, the regulation and stabilization of markets have become crucial imperatives. Meeting the goal of budget reductions by bypassing such mechanisms is indeed quite a significant risk, considering the economic, social and geostrategic costs of any agricultural crisis spawn by the lack of such mechanisms.

More concretely, the Committee of the Regions therefore asks the Commission to “reconsider the phasing out of the various quota system and planting rights”, to “safeguard the EU system of preference and support intervention as well as (public and private) reserve measures”, or still to “[maintain] aid coupling for some crops or fragile regions.”

While they spark controversy among experts, these three intervention mechanisms––public reserve, aid coupling and quota system––provide genuine keys to prevent crises and curb agricultural price volatility. Progressively sidelined in the successive reforms begun in the late 1990s, these mechanisms were not replaced by other regulatory tools able to effectively and lastingly stabilize markets, and ensure adequate stable and lucrative revenues to farmers.

The report of the Committee of the Regions thus proposes the implementation of genuine regulatory tools under the scope of the future CAP.

Though only representing an advisory opinion, the report will be forwarded to the Commission, to the European Parliament and to the Council, as these bodies currently examine the legislative proposals made by Dacian Ciolos. In this respect, we should remember that the Agriculture and Sustainable Development Committee indicated its “utmost interest” on the directions presented in the working document related to the opinion, and during René Souchon’s hearing this past February.

This opinion could therefore influence on the CAP reform, especially since other voices––particularly from agricultural representatives3––were raised to regret the lack of regulation to fight price volatility and stabilize markets in the Commission’s proposals.

momagri agrees with this observation and also feels it is crucial to fight crises as early as possible, nor only so that farmers’ incomes might be better safeguarded, but also to strengthen the CAP’s budget effectiveness.

This is the reasoning underlying momagri’s proposals for reform. “Another CAP is possible” by durably stabilizing farmers’ incomes at lucrative levels, while meeting the European Union’s budgetary constraints.

1 Cf. http://cor.europa.eu/fr/Pages/home.aspx
2 Please see momagri article « True CAP reform remains to be seen », http://www.momagri.org/UK/editorials/True-CAP-reform-still-remains-to-be-seen_1010.html
3 Please see momagri article “Is the future CAP setting aside agricultural price volatility?” http://www.momagri.org/UK/a-look-at-the-news/Is-the-future-CAP-setting-aside-agricultural-price-volatility-_995.html
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Paris, 16 June 2019