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CAP health check reaction: More complexity, new distortions

Philip Clarke 21 November 2008
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Reaction to Thursday morning’s CAP health check decision by EU farm ministers has been flooding into the Farmers Weekly office.





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Most organisations and commentators seem to think that the package – which is intended to simplify the CAP and release more funds for environmental challenges – could actually lead to further complexity, as well as distortions of competition.



Many also see it as a missed opportunity for more radical reform.






WHAT WAS AGREED




  • Compulsory EU modulation increased from 5% to 10%


  • Progressive modulation applied at 4% on SFPs over €300,000


  • Increases in EU modulation matched by cuts in national modulation


  • Milk quota to increase by 1% a year for each of the next five years


  • This increase to be “front-loaded” in Italy


  •  Article 68 – up to 10% of a member state’s SFP may be “top sliced” and used to support farming systems with environmental benefits, support dairy, beef or sheep farmers in disadvantaged regions, pay for food quality and marketing initiatives and help financed crop insurance programmes and animal disease funds


  • Only 3.5% of these monies may be used in trade distorting ways


  • Intervention for bread-making wheat to be limited to 3m tonnes, then subject to a new tendering system


  • Full-decoupling to be extended to all crops and most livestock, with the exception of suckler cows and sheep in member states which are still using these partially coupled supports


  • Set-aside to go for good.


  • End to the energy crop premium

The following is a selection of quotes – and on the right, a reminder of what the package (Word document) contains:





  • “The purpose of the health check was to simplify and streamline the CAP. But the new Article 68 greatly complicates Pillar 1 and gives too much scope to re-coupling support.”
    CLA president Henry Aubrey-Fletcher


  • “It is good that the gap between modulation rates in England and elsewhere has been narrowed. And some progress has been made to eliminate remaining coupled support. But I deplore the special back-door deal which could allow Ireland to get a higher milk quota increase (through changes to its butterfat adjustments).”
    NFU president Peter Kendall


  • “Increasing the levels of modulation is going to penalise farmers’ incomes directly. No one can be satisfied with this compromise.”
    Jean-Michel Lemétayer , president of EU farmers body COPA


  • “Modulation was a massive issue for us and we have secured agreement that any increase in EU compulsory modulation will be offset by an equivalent reduction in the current additional modulation which has been imposed on farmers in Northern Ireland.”
    Ulster Farmers’ Union president Graham Furey


  • “The one thing we wanted from this was certainty in the medium term. Having two reviews of quota policy (in 2010 and 2012) will not deliver that. We are also concerned that the measures under Article 68 will allow member states to effectively re-introduce coupled support for the dairy sector which could distort the competitive environment.”
    Dairy UK director general Jim Begg


  • “I share the disappointment of the UK dairy sector at the competitive distortions resulting from today’s deal. And given the large amount of money already being spent on farm payments, I could not support the use of unspent funds which should come back to member states.”
    DEFRA secretary Hilary Benn


  • “Environment minister Hilary Benn has forced a U-turn in Brussels, which means Britain and other countries can make (direct) payments to farmers conditional on land being left for birds like skylarks, yellowhammers and linnets.”
    Gareth Morgan, Head of Agriculture Policy at the RSPB


  • “Now more than ever we need a truly common European agricultural policy and one which is less complicated. What we see between the lines of the compromise is the very opposite.”
    Gert Van Dijk, president of EU co-operative body, COGECA


  • “Britain sent five ministers to this meeting, yet when the crucial negotiations were ongoing earlier this year, not a single British minister was present. Britain has been the empty chair in the room when it came to farm reform, and part of the blame for the timidity of the health check falls to our government.”
    Conservative MEP Neil Parish


  • “The (British) government gave up £7bn of taxpayers’ money (in the annual rebate) for vague promises of CAP reform which it has signally failed to achieve.”
    Conservative shadow agriculture minister Jim Paice


  • “The outcome of the EU negotiations gives the government the scope to channel unspent single farm payment funds to sheep farmers. I am calling on the minister for agriculture to make an immediate announcement that a new Sheep Maintenance Payment scheme will be introduced and paid out in 2009.”
    Irish Farmers’ Association president Padraig Walshe

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