Reviews are subject of much speculation

20 July 2001

Reviews are subject of much speculation

Brussels observers have a penchant for speculation. This is the result of having many hours of "dead time" to ponder, while waiting for someone, somewhere to decide something.

And so it is with the mid-term reviews of Agenda 2000.

There is going to be an awful lot of waiting until even the first options papers emerge from the commission, probably in June 2002, after the French elections.

That will be followed by protracted negotiations in various Brussels committees and the council before any proposals – let alone decisions – emerge.

Lots of time then for speculation.

The process has started already, triggered by the publication of market forecasts for the main commodities to 2008.

Last week, farm commissioner Franz Fischler insisted he was "talking about a review, not a reform". That would seem to dampen speculation that the process could result in anything more than a bit of tinkering with the existing regimes.

But he went on: "We have to ask ourselves if the measures in place are meeting the objectives (of the CAP). If the answer is no, new measures will be required."

At this point, keen Brussels observers reach for their copies of the market prospects reports and skim the 152 pages. They make reasonably comfortable reading.

Wheat is expected to stay in balance, with unsubsidised exports absorbing any boost in yields to 2008. Oilseeds are not too bad either, not that there is any scope to reintroduce crop-specific area aids.

As for dairy, the existing Agenda 2000 reforms do not start until 2005, so proposing changes next year for something that cant take effect until 2008 seems silly.

That leaves rye and beef, where clear problems have been identified. For rye – where there is the prospect of a 13m tonne surplus by 2008 – the solution boils down to cutting the support price drastically or tightening the specifications so it becomes almost impossible to get it into intervention. One way or another, the crop must be discouraged.

But the most interesting area will be beef, where further significant changes will be needed to contain surpluses.

Much will depend on the effectiveness of the recently agreed five-point plan, which includes cutting stocking rates and forcing the inclusion of heifers in SCP claims for the next two years. At the least, expect to see a further tightening of these measures.

A more radical solution, favoured by Germany, is to replace headage premiums with an area-based "mea-dow premium". It might happen.

But, with these two exceptions, the need for change seems limited. Yet, as one senior commission executive said last week: "Never before have so many member states come to us so soon after a major reform and told us more is needed."

That is the political backlash from BSE and F&M. They are after a shift in resources from traditional market support to rural development.

The calls have been greeted with enthusiasm by the commission because it wants to be seen to be responding to societys demands. It also believes boosting rural development spending is the best way of incorporating farmers from central and eastern Europe.

Since the total budget for agriculture is already fixed under the Berlin agreement, the only way this can be achieved is through modulation. That could take many forms – across the board or targeted, optional or compulsory, flat rate or graduated. But with the UK, Germany and France backing some kind of modulation, to suggest its coming is more than just idle speculation. &#42

The mid-term reviews of the cereals,

oilseeds, beef and dairy regimes under

Agenda 2000 may still be 12 months

away, but speculation as to what may

come out of them is already mounting.

Europe editor Philip Clarke joins the

crystal ball gazers

See more