Little to surprise in Agenda 2000 plans

13 March 1998

Little to surprise in Agenda 2000 plans

Lower prices? Increased aid? More discrimination Less centralised? In the first of a new Inside Europe series, Philip Clarke considers the implications of Agenda 2000.

REFORM of the common agricultural policy enters a new phase next week with the publication in Brussels of the official Agenda 2000 proposals.

But like the most badly kept secrets, the event is destined to be something of an anticlimax. There will be few, if any, surprises.

Agenda 2000 was launched last summer paving the way for a “deepening and extension” of the 1992 reforms already in place.

But it is only in recent weeks that a more detailed picture of what the commission has in store has emerged. As the formal proposals have neared completion, the corridors of Brussels have taken on an almost sieve-like quality.

Nothing can be taken for granted. But it now seems certain that, for cereals, the commission will call for a 20% cut in intervention prices in 2000, partly offset by an increase in area aid. Set-aside will be effectively removed, oilseed rape will get the same area aid as cereals, and pulses will get a small premium.

For milk, the measures are more radical in appearance, but go less far towards making the sector “world competitive”. Support price cuts of 15% are proposed (phased in by 2004), with new headage payments (of up to £123 a cow) in part compensation. A 2% quota increase is also being offered.

And in the beef sector, the company is looking for a 30% cut in support prices by 2003, with intervention to be replaced by private storage aid. Increased headage payments are planned.

Doubts remain about whether the reforms go far enough — especially for beef and dairy — to meet the EUs trade obligations.

Time will tell. But the more heated debate initially is likely to be reserved for two other issues — renationalisation and capping.

Renationalisation was signalled at an early stage. But it is only in recent weeks that the significance has become apparent. Latest drafts suggest 30% of dairy and beef support cash will go into “national envelopes” to be allocated to farmers in ways each government sees fit.

The view in Brussels is that this is a shrewd move by the commission. Giving members states the flexibility to meet demands of their own farmers should help avoid the protracted wranglings that have characterized previous attempts at reform.

But UK farming bodies have been quick to condemn the idea. Its the thin end of the wedge, they say. Its potentially trade-distorting. Its overly bureaucratic.
But perhaps this condemnation has been a little too quick. How many times in the past have policies determined centrally in Brussels proved totally inappropriate for the UK owing to our unique farm structure?

And, while farmers are understandably nervous of depending on UK ministers to pay national assistance (green £ compensation — or lack of it — being fresh in the mind), at least, the cash being put into the so-called envelopes is all Brussels money. UK agriculture should not be getting less aid as a result. The taxpayer will not pay any more. So long as there are sufficient controls, there must be some benefit in allowing support to be targeted to meet local needs.

As for capping, the good news is that leaked proposals point to a watering down of initial plans for limiting aid on larger farms. It now seems likely the commission will call for full aid up to £70,000, reduced by 20% for the next £70,000 and 25% thereafter.

The popular view, however, is that any capping will discriminate against the UKs largest producers, penalising the efficient at a time when we should be gearing up for world markets. Strong opposition is expected in the coming negotiations from the UK and possibly Germany or France. But it would be foolish to count on capping being talked out of the reforms, as occurred in 1992.

  • For this and other stories, see Farmers Weekly, 13 March-19 March, 1998

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