EU calls for market-oriented farm reforms

May 20th, 2008 - 11:34 pm ICT by admin  

Brussels, May 20 (DPA) The European Union (EU) member states should allow their farmers to respond to market conditions and stop paying them to produce unwanted goods, the bloc’s executive recommended Tuesday. But the proposals from the European Commission, which come in the midst of a bitter debate on soaring food prices, fall short of demands made by some EU member states for the costly Common Agricultural Policy (CAP) to be abolished altogether.

Instead, they focus on modest changes such as ending the policy of paying farmers not to use their land and to produce goods for which there is little demand, and scrapping limits on milk production, EU Agriculture Commissioner Mariann Fischer Boel said.

The so-called “CAP health check” is all about freeing our farmers to meet growing demand and respond quickly to what the market is telling them, she said in a statement.

“It also aims to simplify, streamline and modernise the CAP and give our farmers the tools to handle the new challenges they face, such as climate change,” she said.

Launched as a follow-up to a major reform of the CAP in 2003, the “health check” focuses on streamlining existing policies, rather than bringing in new ones.

For example, it recommends finally getting rid of the rule that farmers must leave 10 percent of their arable land untouched - a rule brought in during the 1980s to avoid the problem of over-production, and suspended in 2007.

Since the EU has also decided to scrap all milk quotas in 2015, it proposes raising the quotas every year until 2014 in an effort to provide a “soft landing” for milk farmers, who could otherwise face a sudden collapse in the dairy market.

It further proposes stopping practically all payments to farmers which are made in return for producing a specific foodstuff - a practice which was largely abolished in 2003.

And it proposes shifting an ever-increasing amount of money from farm support into rural development projects aimed at strengthening environmental and business projects in rural areas.

In order to sweeten the pill for both farmers and member states with large rural populations, it also proposes allowing member states more freedom in how they give aid to the most vulnerable farming sectors, and giving new members an extra three years - until 2013 - to use a simplified system for claiming EU funds.

The CAP has long been the EU’s most costly and controversial policy. In its heyday in the 1980s it took up some 60 percent of the EU’s budget, and even after the 2003 reforms it takes up more than a third, or some 43 billion euros ($67 billion) per year.

However, the proposals, which have to be approved by EU member states, are likely to face a heated debate.

Older EU member states such as France and Germany are opposed to reforms which they see as leaving their farmers vulnerable to market forces, while new states such as Latvia say that the CAP should be reformed to transfer money from richer members to poorer ones.

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