Simplification : policy coherence should come first

The cornerstone of the simplification of EU agricultural policy should be coherence among all EU policy initiatives, rather than discussions on the nitty-gritty of regulations.

On Monday, EU agricultural ministers will meet to discuss the simplification of the Common Agriculture Policy, which has been promoted as THE flagship project of the Juncker Commission in the field of agriculture. Simplification is somehow a rather consensual target: all EU agricultural commissioners for at least 20 years have attempted to simplify the CAP.

Despite many initiatives like the “single” payments scheme and the “single” Common Market Organisation, the CAP is still accused of growing more and more complex. The last high level forum, led by Mr Stoiber a few years ago, set the target of 25% reduction in administrative burdens for famers which, on paper, was not only achieved, but even exceeded officially (-36%) ! The same could be said more recently on the REFIT exercise.

As a result, one might suggest that the problem is not directly linked with the CAP itself or regulations as such…

Beyond extrapolating on whether or not the Commission will manage to make a real difference in terms of administrative burdens for farmers this time, it seems necessary to question the target of simplification itself.

Agricultural policy decisions in the EU were historically made by a single department for agriculture, which focused primarily on the Common Agricultural Policy (CAP), under the direction of the Commissioner in charge of Agriculture and Rural Development.

Stakeholders and farmers were following only one policy area in order to understand the functioning of European agricultural policy. They were following the CAP – and that was it ! However, both the European Union and the agricultural sector have since evolved.

On one side, today’s challenges in the agri/food sector – which range from scientific developments and international competition, to climate change and environmental concerns – have required a greater variety of competencies to be shared among an ever-increasing number of sectors. Farmers and food producers not only need to expand theirs skills to new techniques, but they also need to keep an eye on a full range of different societal developments outside their farms or small business which create a sense of complexity, but also real and tangible difficulties to adapt to and anticipate the trends.

On the other side, the EU itself has evolved, with new Member States and new administrative processes. A quick assessment of European policies which have a direct or indirect impact on the agricultural sector – such as those related to trade, health, climate, environment, energy, and external action – demonstrates the interconnectedness of the sector with other policy areas pursued by the EU. Policy-makers preparing the EU position for the 2015 COP Paris Conference, for example, will indirectly influence the decisions to follow shortly after on the role of agriculture in Europe’s climate objectives for 2030. On the one hand, the EU emphasises food security as a top priority, on the other hand, it is about to set target that could reduce the capacity of the same EU to produce more in some regions – this is far from simple ! There is a similar picture when it comes to trade policy. Ambitious trade agreements will imply at least the adjustment of EU agricultural policy to reap the benefits of these agreements, ensuring that European producers are on an equal footing in terms of internal support and competitiveness with their challengers from our trade partners.

Many examples could be added to the list.

Those working in the department for agriculture, and the current Commissioner for Agriculture, do, of course, remain responsible for the implementation of agricultural and rural development policy. However, other elements of agricultural policy, including those such as international trade, environment and climate related objectives, and health and consumer safety, now fall within the mandate of other sections of the European Commission which does not ease the readability of EU policy… And this is without mentioning the multi-layer legislations stemming from mandates for regional and national initiatives at Member State level.

In simple words, to have a simple agriculture policy the real ambition should be to :

  • to preserve a single, efficient, and coherent Agricultural/Food Policy at EU level ;
  • to focus on a limited number of clear and well targeted tools clearly connected to and coherence with policy objectives ;
  • to have a clear leadership with coherent and consistent responsibilities, in order to avoid a fragmented approach.

To achieve this, one might suggest that the EU Commissioner for Agriculture should be up-graded as a vice president in the new EU approach.

In other words, coherence and some kind of centralisation (not incompatible with a level of flexibility) are the cornerstones of the simplification process – but who today really supports such an approach?

Horacio G. Aleman to boost Farm Europe’s thinking on labelling and food chain issues

DSC_0156 (2)Farm Europe is pleased to announce that Horacio Gonzalez Aleman has joined its team of contributors today. A well-known expert both in Spain and at EU level, Horacio is a Lawyer and Postgraduate in European Studies and Agri-food Business.

He offers more than 25 years of experience in  Food Chain issues, having held various positions in organisations in the food and drinks industry, at national and European level, as well as in the OECD (BIAC).

He has an in-depth knowledge of regulatory affairs, the internal market, and economic issues affecting the food industry. Horacio will be Farm Europe’s animator for the working groups on the Food Chain and issues related to labelling.

The 4th SCAR Foresight Conference: Sustainable Agriculture, Forestry and Fisheries in the Bioeconomy – A Challenge for Europe’

Farm Europe attended the 4th SCAR Foresight Conference at the European Commission on 8 October 2015.

The conference, titled ‘Sustainable Agriculture, Forestry and Fisheries in the Bioeconomy – A Challenge for Europe’, brought together experts and sectoral representatives to discuss the principles which would enable the primary production sectors – agriculture, forestry, fisheries, and aquaculture – to confront the growing challenges of climate change, food security, and sustainability.

Speakers included Fernand Etgen, Luxembourgish Minister of Agriculture, Viticulture and Consumer Protection, John Bell, from DG Research and Innovation at the European Commission, Ken Ash, Director of Trade and Agriculture at the OECD, and the experts responsible for the production of the SCAR report around which the conference was structured.

The nature of the event called for questions to be raised and discussed, rather than for conclusions to be reached. The perspectives offered were nonetheless enlightening, and the lively debate offered much food for thought. Although common agreement was not the primary aim of the conference, a number of issues were repeatedly emphasised by various speakers, some relating to Research and Investment in the agricultural sector, and others reflecting on the broader nature of European agricultural policy:

  • The urgency of the issues at stake: regardless of the scale of the challenge, ensuring food security and respecting the demands of climate change are urgent problems requiring immediate solutions.
  • The global nature of these issues: the role of international politics, with such agendas as the New York Sustainable Development Agenda and the upcoming COP 2015 meeting in Paris. The resulting implications of the effectiveness of European policy-making in this area were also raised.
  • The need for cooperation among stakeholders: joint priority-setting processes lead to more lasting solutions.
  • The need for multiple views, and for the broadening of the debate. This refers to the importance of both public and private sector involvement – including the consultation of civil society and consumers – in agricultural research agenda-setting. The involvement of practitioners can reduce the risk of policy failure, and this holds true for the education of practitioners in new technologies.
  • The need for waste reduction, regardless of the eventual importance of biomass to the future of European agriculture, and the related question of the role of consumer behaviour.
  • The notion of food systems, rather than ‘food security’, inviting a more holistic approach to the challenges to global food and agriculture and focusing on the potential opportunities for innovation, trade, health, job creation, wealth generation… offered by food security.
  • Above all, an overarching theme was the requirement of policy coherence in terms of agricultural policy. This was raised in various contexts – between member state and EU level; in terms of priority-setting; and ultimately in relation to the coherence between different EU policies, such as environment, climate, and development. A primary reason given for this was the need to reduce uncertainty in the sector in order to encourage investment. A related issue was the EU’s obligation to take leadership on the issue of the bioeconomy, and securing European policy coherence was raised as a measure for assuring a strong global role for the European Union on the issue of the future of the agri-food sector.

The closing panel discussion provoked a lively discussion regarding the feasibility of the ‘bioeconomy’ concept, and participants highlighted both the potential for biomass to offer far-reaching solutions to the issue of sustainability and the remaining question marks – including the implications for land use and resource exploitation – which are still to be fully addressed.

Read more about the SCAR process and access the 4th SCAR Foresight Exercise at https://ec.europa.eu/research/scar/index.cfm?pg=foresight4th.

An initial analysis of the package of emergency measures announced by the Commission on the 7th September.

In summary, it is clear that the Commission does not wish to rush out measures. We will have to wait for the outcome of the informal Council of Agriculture Ministers Mid-September before commenting on the ambitiousness of the measures announced yesterday. At this stage it is difficult to predict what impact they may ultimately have on the market.

At this stage the package contains a varied if somewhat motley assortment of measures, some of which offer promising prospects however, and in particular:

–       The creation of new financial instruments through the European Investment Bank (EIB): This could prove useful for farmers burdened with significant debts when commodity prices are plummeting. It will take time to put in place and it may be a while before it bears fruit. The idea is nonetheless viable and promising, not least because it addresses a real need facing many farms, especially those that have invested in preparation for the end of quotas.

Other measures being put forward include:

–       Enhancing support for private storage: an increase in the level of public aid for private storage could encourage operators to choose to store more. However, the Commission has not yet announced either the new level of aid or details about storage duration requirements. It is therefore difficult at this stage to judge whether the measure will work. If it is well calibrated, it could, to some extent, offer a more politically acceptable alternative to other stronger forms of intervention. If the incentives are sufficient, it could help to rebalance supply and demand over the short term.

–       Encouraging a wider use of income stabilisation tools, especially insurance. This is possible under the current CAP’s second pillar, although the provisions are embryonic. In a context of volatile markets, of which the current crisis is just the latest episode, such tools offer a promising approach that the EU should actively pursue.

In addition to which the EU has announced:

– €500 million Euros of ‘targeted’ aid for the dairy sector to be shared among the Member States. Negotiations will undoubtedly be difficult and so there is a risk that the impact of this budget will be diluted. If it is to have an impact, it will need to be carefully targeted. Otherwise the €500 million budget will have to be shared among more than a million farmers, which is unlikely to achieve very much.

Europe must come to grips with the CAP

The European Union has adopted a piecemeal approach to the crises hitting the bloc’s milk and livestock sector,  write Yves Madre and Luc Vernet in Euractiv.

The EU’s response to the milk crisis – and to the crisis hitting its livestock production more generally (including pork and beef) – has been at sixes and sevens.

Several hundred million euros in emergency aid was announced during the summer by the governments of the EU’s member states, in particular Belgium, Spain, Italy, France, and Estonia. Were it not for the Council convening an emergency meeting of Agriculture Ministers on the 7 September, we would have been forgiven for forgetting that Europe’s 28 member states have a common agricultural policy at all.

Yet, while the situation in each country, in each sector and in each farm varies, the whole industry is struggling to cope with a perfect storm of negative developments: the Russian ban on EU food products, the Chinese economic slowdown, and the persisting sluggishness in the European market. The questions being asked are ‘what is Europe doing?’ or ‘what can Europe do?’, that is, over and above simply observing that, as in the words of the European Commissioner for Agriculture Phil Hogan in July, “there is too much milk on the market”?

If there’s one thing this summer has shown it is that, in addition to short-term measures, the time has come for a fundamental redesign of the European Common Agricultural Policy itself. We need a fresh forward-looking vision and common strategy for agriculture that encompasses the whole of Europe. It is a tall order, but it is the only way to support agricultural businesses, wherever they are in Europe, to become more resilient in times of crisis and it is the only way to avoid the looming renationalisation of crisis management in the industry.

The world’s food needs are growing fast. European agricultural markets are mature. Europe is technologically advanced and it has a climate that is particularly conducive to agriculture. Europe, therefore, is very well placed to be a major supplier. However, if this is to be, it needs to devise a Europe-wide strategy that is equipped to surmount the challenges that would accompany such growth, a growth that must be sustainable in three dimensions: the environmental, the economic and the social. Such a strategy must, in particular, be better able to cope with market volatility as today’s crisis, will not be the last, far from it. Whether in terms of the economy, the geopolitical situation or the weather, instability is increasingly common, and increasingly violent.

It is abundantly clear that Europe is not, as we speak, able to act. Its lack of effective policy instruments for stabilising farm revenues is simply adding to existing volatility. Why? Because producers operate in a market and most of them are obliged to react to market signals: when demand rises they produce more in order to take advantage of rising prices, when demand falls they also produce more in order to earn through volume what they lose in unit value, but they do so hoping that their neighbour produces less, or goes out of business.

Without a fresh European approach, and renewed European investment in the Common Agricultural Policy, this vicious circle can only create unhealthy competition between producers. It has become urgent, therefore, for Europe to ‘tool up’ for the major economic challenge of coming years: market volatility management.

The most recent CAP reform was focused on an important subject; that of the sustainability of farming practices. To this end, greening was introduced and Europe is set to invest nearly 100 billion euros over 7 years, in order to improve the environmental footprint associated with food production in Europe. The priority today is to get serious about the industry’s economic sustainability, by securing revenues and organising the industry to improve its performance. The economy and the environment are two essential dimensions of the sustainability of European agriculture and also two key ingredients for attracting young people – and investors – into the industry.

In the short term, due to its lack of foresight, Europe can only make do with the tools at its disposal: stop the haemorrhage, limit the damage, and reassure producers, whose dynamism and abilities are key to the rural economy of tomorrow, but who are today demonstrating in the streets.

The palette of useful policy instruments is limited. It is possible to increase the trigger price for public storage (intervention) from 21.7 cents to 25 cents, bringing it in line with the economic reality in the industry, without causing artificial overproduction, such as has happened in the past.

Some voices are encouraging the Commission to put in place a ‘financial package’ for the dairy industry. This would be useful. However, any such package should avoid spreading resources too thinly and should not become a political stunt devoid of any real economic impact.

Measures must focus on the areas and the challenges being faced by the sectors that are in difficulty: the challenge of financial costs related to loans recently contracted by farmers investing in the future; the challenge of small farms located in disadvantaged areas and affected by the crisis even if their markets are much more local; the challenge of extension of the closure of the Russian market; the challenge of conquering new markets and of securing investment resources for marketing campaigns, given that any returns take at least 12 to 18 months to arrive in farmers’ bank accounts.

Europe needs to navigate the next few months with due care, it needs to kick-start discussions on the CAP of tomorrow. By doing this, it will be showing its ambition for Europe’s agriculture and food industry, not only though its budget – which is significant – but also through its ability to come up with a vision and a strategy for its farmers, wherever they are in Europe. It isn’t just about the economics of the moment. It is vital to give a political signal that offers hope for the future for those on whom 500 million Europeans depend for their daily food needs.

Summary report on milk : enhance growth prospects despite market turmoils 

The think tank Farm Europe held a meeting the 22nd of July to analyse the difficulties currently being experienced by Europe’s dairy industry. Attending the meeting were representatives from the production and processing sectors.
The meeting reviewed current market tracking tools, recent changes in prices, and asked what measures the EU could take – at European scale –under the new CAP. With a spot price at 26 centimes in the Netherlands and the continuing fall of the price of whey, it is increasingly clear that, in many EU regions, the dairy industry has entered a period of turmoil which requires an immediate, coherent and coordinated EU policy response if the sector is to be able to cope with what is a perfect storm of multiple developments: the Russian embargo, the withdrawal from the market of Chinese buyers, the rise in the cost of animal feed and the high levels of production in most of the world’s major production areas. Moreover, the challenging timing of these developments must not be neglected: the entire sector is going through a period of far-reaching change as it adapts to the new policy and financial context of the post supply management era.
The challenge over the next few months will be to successfully make the transition into the post-quota era and to prevent a one-off crisis from compromising the long-term prospects for the EU dairy industry and undoing the good progress made over recent years. Europe needs to reaffirm its support for the dairy sector as a key component in its agricultural policy and it needs to reaffirm its desire to maintain a dynamic sector, one equipped to grow in a balanced and sustainable way in all European regions.
In terms of long-term development the European dairy industry has, it should not be forgotten, already made significant investments to increase its production capacity and adapt to new EU policy orientations: in 2014 alone nearly 3 billion Euros were invested in the construction, extension or modernisation processing infrastructures, to which needs to be added the just as considerable investments made by farms themselves.
Today’s CAP provides EU institutions with significant scope for action to help the sector to cope in times of difficulty and implement genuinely European responses that avoid any return to national management of such crises whenever the sector is faced with unexpected challenges. The EU does possess the financial resources to intervene without needing to resort to the crisis reserve as long as the European Commission does not use the CAP budget to support spending outside the agricultural sector.
The range of possible measures that could help the sector to play its natural & central role as a source for growth and employment in the EU’s rural areas must therefore be studied. Today’s meeting drew up the following options, which, working with partners from the sector, Farm Europe could further develop:
Funding. Consideration should be given to the creation of a Europe-wide scheme to provide short-term help to farmers in difficulty with loan repayments. Such a scheme could enable farmers to suspend capital repayments on current loans, with defrayment of interest payments for a period of 6 to 9 months, along with debt consolidation if necessary. This scheme could be managed by the European Investment Bank (EIB) and could target holdings in serious difficulty but which are able to demonstrate long-term viability. Such a measure would have a twofold impact: first, it would help growing farms to get through a difficult phase and second, it would reaffirm Europe’s confidence in and ambition for its dairy sector, thereby encouraging long-term investment.
Additional assistance. In order to help more modest holdings located in disadvantaged areas (i.e. holdings not necessarily struggling with debt problems, but struggling to cope with falling prices) with their cash situation one possibility could be targeted aid, limited to the first 30 cows. This emergency assistance could be provided under article 219 of the Single CMO Regulation.
Traditional safety nets. Without compromising the market approach, the intervention price could be adjusted so as to send a signal to operators, thereby limiting the downward spiral. An increase for example up to 25 centimes would have no budgetary impact and would remain below production costs – estimated in Bavaria, for example, at 29.6 centimes/litre. Over and above the signal this would send to operators, such an increase would reconnect the currently unrealistic intervention price – set at 21 centimes – with the reality of the market.
Promotional measures. EU supported promotional campaigns could increase the international visibility of European products and, in view of the time needed to organise them, these could be ready in time for when the market recovers in 2016. A further justification for this measure is that Europe’s competitors have been building up substantial stocks. To give operators time to act it is important to announce these measures rapidly. It is also important to give careful consideration both to the level of funding needed, which needs to be consistent with the goals if the approach is to bear fruit, and to the questions of campaign targets and brand focus. There are currently a number of ‘place based’ brand development initiatives to support milk marketing. However, Europe either lacks completely or offers only very limited support in this area. Current efforts are incapable of reaching the scale needed to make a tangible impact in markets, both in Europe and internationally.
– In relation to support for longer term sectorial development, four themes will be studied from next September with a view to implementation in the medium term:
o how insurance schemes can help the dairy sector, in particular in relation to fluctuations in farm revenues and/or profit margins;
o the conditions necessary for a more effective application of the principles promoted by the 2012 Milk Package;
o the possibility of greater targeting or regionalisation of market management tools and;
o for farms located in remote areas, an adjustable Europe-wide funding scheme could be introduced in such a way as to reduce their structural competitiveness deficit (the cost of collection ranges from 0 to 4 centimes/liter of milk)
There has been significant progress over recent months with the strengthening of the European Milk Market Observatory. However, this observatory is not yet able to monitor and analyse, on a continuous basis, variations in producers’ margins, which are being heavily impacted by the cost of animal feed. It is therefore unable to provide policymakers with useful and timely information about impending crises – for an industry that is a key component in Europe’s growth and employment strategy for agriculture and agri-food.

Increasing the intervention price for dairy products is neither a dirty word nor a magic wand

Over recent weeks, all the voices – and there have been quite a few – calling for an increase in the intervention price for dairy products, have run into a wall of ice at the European Commission, which has responded with the argument of “market orientation” and the old story of milk lakes and butter mountains.

The debate about how best to manage agricultural markets is key for the future of Europe’s dairy sector. It is therefore necessary to go beyond simple discourse and properly assess all options before rejecting any of them. Extreme attitudes for or against do nothing but weaken the Union’s ability to put in place an ambitious value-for-money policy at a time when, all around the world, the big players are developing offensive policies.

What do we mean by ‘intervention tools’?

Firstly, intervention is based on a public purchasing scheme that is triggered if the market price falls to a fixed price defined at EU level. If used properly this system offers good value for money for taxpayers. Public authorities buy when markets are low and sell when prices recover. So this is not a debate about wasteful public spending or about an inappropriate use of the EU budget. The public purse should in fact make money out of the system.

“Why wouldn’t it be credible to slightly adjust the intervention price at least to take into account the cumulative inflation since 2007 – setting it at 25 cents?”

Secondly, in a market-oriented system, intervention prices are fixed below production costs to avoid the situation where non-competitive producers produce only to sell into public intervention stocks rather than for the market.

The question, which is easy to ask, but not easy to answer in an EU of 28 Member States is:

Does the current trigger level price of 21.7 cents provide an adequate safety net to prevent competitive farmers from collapsing under exceptional circumstances? What level would be adequate and low enough to discourage producers who might be tempted to make a living from such a scheme?

Thirdly, we might ask why such a system is still needed today? One could be tempted to answer that we have not found any better ways of ensuring market stability, ways that are easy to implement and which offer a truly European response in difficult market conditions (having in mind that a key objective of EU agricultural policy is to stabilise markets and to maintain a dynamic agricultural production all across the EU) – but this would not be a sufficient answer. In recent years – especially in 2009 – the intervention price has served to set a floor to the market – in other words a limit beyond which a crisis cannot worsen further. This means that the intervention price is not merely a financial tool but also plays a psychological role.

Until 2007, before being set at 21.7 cents, the intervention system was activated on yearly basis, which indeed does not make sense. Until now only the deep 2009 crisis had triggered intervention.

If we want the safety net policy to remain fit for purpose, its instruments must remain connected to economic reality without distorting market signals. In this regard, while production costs vary considerably across the EU, recent studies have shown that, for instance, in Bavaria, they are running at 29.6 cents whereas in Italy when they reach 34 cents farmers are no longer making money. While it seems that some farmers in Ireland can live with 26 cents – they are probably the most efficient in Europe.

In light of the above, why wouldn’t it be credible to slightly adjust the intervention price at least to take into account the cumulative inflation since 2007 – setting it at 25 cents?

This would be a positive political signal to be sent by Commissioner Hogan to economic actors across EU of his willingness to maintain on track the stable dairy policy orientation that was initiated when the decision to phase out the milk quotas was made. This would strengthen the confidence of economic actors in EU safety nets policy increasing their capacity to further invest in a post quotas era.

School Schemes: the fight against obesity is a true European responsibility

As key decisions have to be taken in the coming days for the future of both the School Fruit Scheme (SFS) and the School Milk Scheme (SMS), it’s good to come back to the substance and aim of these schemes created to encourage healthy eating, specifically the consumption of fruit, vegetables and milk. These objectives are still very much relevant and needed, which makes me think that we should not only maintain but also strengthen these EU initiatives, as suggested by the Commission proposal and the report drafted by MEP Marc Tarabella in the European Parliament.

The SMS was created in 1977 and all EU Member States participate in the scheme. In 2011/2012, approximately 20.3 million children benefited from the scheme, an 18% increase from 2010/2011. The SFS was set up in 2009 and is EU-wide and voluntary. It aims to provide school children with fruit and vegetables so as to encourage good eating habits in young people. The scheme provides fruit and vegetables and requires participating Member States to set up strategies such as educational and awareness-raising initiatives. 25 Member States took part in SFS in 2013/2014.

The SFS

The SFS was set up by the then Commissioner for Agriculture, Mrs. Fischer Boel, and her team for two reasons:

Firstly, the continuous decline in fruit and vegetable consumption was proving detrimental to European producers. According to Freshfel, the European organisation for fresh fruit and vegetables, consumption has dropped between 7 – 10% over several years and as such the WHO recommended daily intake of 400g is far from being reached in most Member States. One of the objectives of the Common Agricultural Policy (CAP) in article 39 (TFEU) is to stabilise the markets for agricultural products and thus this article formed the legal basis for the creation of SFS.

Secondly, the serious increase in terms of overweight and obese children in the EU needed to be addressed. In 2007 it was estimated that in the EU-25 approximately 22 million children were overweight, with 5 million of these children obese. In February 2014 DG Sanco published its report on the “EU Action Plan on Childhood obesity 2014-2020”, stating that it is estimated “that 1 in 3 children in 2010 were overweight or obese, up from 1 in 4 in 2008”. And also explaining that “If we fail to act on overweight and obesity in children and young people soon, this issue threatens to have a highly negative impact on health and quality of life and may overwhelm our healthcare systems in the near future”. Professor Kenneth Rogoff, of Harvard University, has recently added his voice to the debate about obesity. In an article in the Project Syndicate, dated 12th June 2015, he says “Given the huge impact of obesity on health care costs, life expectancy, and quality of life, it is a topic that merits urgent attention”.

SFS Action and Experience

In 2007 the negotiations on reform of the market organisation for fruits and vegetables were underway. The reform was adopted unanimously by the Agricultural Council. As part of the final compromise the Commission was invited to present a proposal on an EU school fruit scheme based on an evaluation of the costs and benefits. The Commission services carried out an impact assessment (IA), which followed comments from the Impact Assessment Board, and was then further refined and developed and subsequently given the green light. The arguments in favour were, and still are, compelling. The purpose of an effective SFS is to bring about a permanent, lifelong change in dietary habits in favour of the consumption of fruits and vegetables.

When the SFS was adopted in 2008, only a few of the more affluent Member States, such as Germany, Denmark, Belgium, Netherlands, Ireland and the UK, had national school fruit schemes in place. The national schemes varied considerably in terms of scope and measures, with little homogeneity, lack of coherence and focus. Since adoption of the SFS the experience has been quite positive. In 2013/2014 school year almost 10 million children benefited, 66,000 schools, and 67,000t of products were distributed. 25 out of 28 member states participated. The UK, Finland and Sweden do not participate. The UK has chosen not participate on the grounds that it has its own programme, costing £40 million a year. Finland would have liked to participate, agreeing with the scheme’s measure and objectives, but finds the administrative burden too high. Sweden is the only country which refuses to participate on grounds of principle i.e. not an EU justified action.

Problems with SFS

Problems have particularly surfaced with regards to the size of the EU budget, the share of EU co-financing and the eligibility of the accompanying measures (awareness measures).

In relation to the size of the EU budget, experience has shown that in times of pressure on public budgets, many schools could not afford to participate. Even with 75% EU co-financing the national contribution is too burdensome. In some cases, in order to get around the budget constraints, SFS schemes rely on parental contribution. This has the unfortunate effect of limiting the SFS to more well-off children and regions, where the prevalence of obesity is lower compared to the socially disadvantaged areas and children of the EU. The consequence has been that those children most in need of an SFS, in terms of consumption of fruit and vegetables and changes in diet, do not participate in the SFS.

In order to address this problem, the Commission proposed, as part of the CAP 2020 reform, to increase the EU budget from 90 to €150 million, to increase the co-financing rates to 75% in general and 90% for the disadvantaged areas, and to make more of the accompanying measures eligible. The accompanying measures are a central theme in the school fruit scheme. The accompanying measures are there to bridge the gap between schools, farms, the countryside, the environment, healthy lifestyle and healthy diet. It is expected that the changes will allow many more schools and school children to benefit from the SFS. The increase in budget should certainly be welcomed but, as the IA made clear, the budget should have been a minimum of €400 million annually to cover all eligible schoolchildren in the age group from 6 to 10 across the EU. The figure is, of course, even higher if you expand the age group.

The SFS fulfils the subsidiarity test of being voluntary and having a high degree of flexibility for Member States in terms of implementation. It is, however, not really proportional, given the scale of the obesity problem and the risk of the explosion of future health costs, which would warrant a much higher budget to assure full cover. Action at EU level is fully justified given the demonstrated high Member State participation in new programmes put in place, and the fact that the disappearance of the SFS would risk reverting back to the pre-SFS situation and a loss of EU solidarity. A higher budget, constant improvement and effective implementation of the SFS is needed, not abolition.

The SMS

The SMS has faced different challenges than those of the SFS, having received a very negative report twice, contrary to the report on SFS. The SMS has, at times, been criticised as being a surplus measure. For example, at one stage aid was to be given exclusively to fully fat drinking milk in order to get rid of as much milkfat as possible.

One of the main problems with the SMS was the element of deadweight, with the level of aid representing a very small part of the price with consequently little, or no, additional consumption. Other problems related to the lack of accompanying measures, heavy administrative burden and questions about the health of dairy products with high fat content.

However, the scheme has been revised several times and the list of eligible products has expanded to include low-fat milk and milk products, whilst maintaining the absolute level of aid per kilo. This means that de facto the incidence of aid is proportionally higher for the low-fat products given the lower cost price. As to the issue of health, there has been a complete turnaround in the opinion amongst experts, now judging milk and milk products in a much more positive way, pointing to the beneficial aspects of dairy products with regards to calcium, proteins, minerals and vitamins, and other nutrients as part of a balanced diet. The debate about animal fats, saturated and unsaturated, has become much more nuanced with recent scientific studies showing the positive health effects compared to vegetable fats.

All these elements explain the proposal from the Commission, from 30th January 2014, to strengthen the SMS, not least with the element of obliging Member States to introduce accompanying measures, as is the case with the SFS. These changes will allow the SMS to become a much more viable and justified measure, leaving the objective of surplus disposal behind and instead becoming a true instrument to further a healthy lifestyle, a balanced diet and to fight against obesity.

The fight against obesity remains a complex problem. The SMS and the SFS certainly do not provide magical solutions in the fight against obesity, but do offer an important contribution to this fight. They should be maintained and strengthened to serve their purpose in an effective way. It is a true EU responsibility. Public support is there. 

Commission Proposal on GMOs endangers the Single Market

On the 22nd of April the Commission adopted a proposal which will allow Member States (MS) to restrict or prohibit the use of genetically modified food and feed (GMOs) on their territory. The proposal is rather extraordinary since it allows the MS to restrict or ban the use of GMO as feed or for human consumption on the basis of nonscientific reasons. The scientific assessment of the safety for the humans, animals and the environment is undertaken by the European Food Safety Authority (EFSA) before the Commission can propose an authorisation for use in the EU. Consequently MS cannot invoke scientific reasons for an eventual ban. However MS will be allowed to ban the use of GMOs on purely political or arbitrary grounds. This is the first time the Commission has made a proposal, in an area where EU harmonised legislation already exists, which goes against the principles of the single market. Only scientific based concerns or the appearance of new scientific knowledge can be invoked to restrict intra-community trade. In the famous decision by the European Court of Justice, Cassis de Dijon, the principle was laid down; that a product that was marketed legally in one MS could not be prohibited to be marketed in another MS unless there were scientific reasons like human safety that could be invoked. The whole idea of creating a single market based on the White book from 1985 and the process of harmonisation of legislation carried out in the 90s has consequently been given a serious blow. Harmonisation has provided the legal certainty for trade inside the EU as well as for imports into to the EU; this proposal allows a MS to undermine legal certainty.

Commission justification

The Commission justifies the proposal on the grounds that the MS have consistently refused to take political responsibility for authorising GMOs through the normal regulatory procedure, by either rejecting or approving new GMOs. Consequently it has been left to the Commission to systematically approve new GMOs once EFSA gave its green light, thus forcing the Commission to take responsibility for political decisions that should, under normal circumstances, have been taken by the MS. Clearly an unsatisfactory state of affairs, given the controversy surrounding GMOs. In reality this has happened with the tacit collaboration of the MS opposing GMOs sending the responsibility conveniently to the Commission to take the unpopular decision. This has led to a change in the legislation on GMOs by which MS can ban the planting of GMOs on their territory (ban on free release into the environment). To some extent such a ban could be justified if, as an example, you were concerned about a significant organic production you wanted to protect, where cross pollination with GMOs might endanger the organic status. Enforcing safety margins (distance) between organic and non-organic producers should however be sufficient to prevent this from happening in any widespread manner. This piece of legislation, although in breach of the Single Market, should not have any serious intra-community trade consequences since it only inhibits the sale and trade of GMO seeds in some MS affecting a few multinational seed companies, like Monsanto.

Consequences of the Commission proposal

However, extending a ban on GMOs to food and feed could have far-reaching consequences. The EU production of meat and milk is highly dependent on the import of protein rich ingredients like soya beans and meal from big suppliers like USA, Brazil and Argentina where there is a widespread and growing use of GMOs in the production of soya beans. The EU imports, according to FEFAC (European compound Feed Manufactures), 75 % of its needs of soya beans and soya bean meal, accounting for 30-35 Mill tons annually. It is obvious that the EU could not sustain its big and economically very important production of meat and milk if a ban on GMO feed were to be widespread. A MS with a significant animal production would have to think twice about using such a faculty, even in light of public opinion pressure, since a ban would destroy its industry. But what about the MS which have already taken national measures to restrict the use of GMOs beyond the ban on planting? If such a MS were to ban use on their territory, what would happen to animals which have been fed GMOs, to their meat, milk and milk products if somebody wanted to export to such a MS with a ban? Would the MS ban the import with the consequent breakdown in trade and the single market? The Commission says in its proposal that the measures “would have to be compatible with the rules on the internal market, and in particular with article 34 TFEU, which prohibits measures that would have an effect equivalent to a quantitative restriction on the free movement of goods. MS making use of this proposal will therefore need to justify the measures introduced on grounds in accordance with article 36 TFEU and the case law of the court of justice on overriding reasons of public interest “. Article 36 talks, amongst other things, about “public morality “. In the footnote to this sentence there is also reference to the Cassis de Dijon judgement. In the legal text there is no answer to the question of what MS can or cannot do in terms of enforcing a ban on food and feed on their territory. It only says that the MS have to submit a justification and the draft measures to the Commission where the Commission will consult the other MS and where the MS has to wait three months before putting measures in place. This leaves it completely open as to whether MS can take measures to restrict intra-community trade or not, and how such a ban on food and feed would actually be enforced on their territory without this having consequences for the single market. By hiding behind elegant references to article 34 and 36, avoidance of disguised restriction on trade, proportionality and nondiscrimination, the Commission is sending the Black Peter to the MS wanting to introduce a ban.

Risk to the Single Market

Imagine a situation where a MS introduces a ban. Would such a MS interfere with the trade in meat and milk from animals which have been fed with GMOs, and what would be the consequences for the activity of food companies and supermarkets etc.? Would a MS have to introduce controls at the border with other MS, thus reintroducing border controls or would the controls take place at the level of the individual food company? What about products brought in from another MS by a citizen or from a person living in another member state with no ban? To enforce such a ban would require a considerable dedication of resources and manpower, which does not tally with the pressure on public budgets and the need for MS to make savings on public expenditure to respect the Growth and Stability Pact. The idea seems to be preposterous and uncontrollable. If, on the other hand, the Commission is acutely aware that a ban is neither legally nor practically enforceable, does this make the proposal an empty shell for the MS wanting to introduce a ban? The Commission’s Legal Service has apparently given its approval, obtaining formal cover with reference to the mentioned articles and provisons.

Real effect of the proposal

Maybe the whole idea is just to provide a basis/counterbalance for the approval of the 19 pending GMOs, which were approved the following day, and the other 30 or more GMOs in the pipeline, subject to EFSA scrutiny, which sooner or later will appear for approval.

No wonder the proposal has been met with such an outcry both from the NGOs against GMOs, Members of The European Parliament, European and national agricultural and food industry representatives, as well as our trading partners, like the USA, which says such a ban would breach our international commitments under the WTO. Having negotiated the SPS Agreement on behalf of the Commission under the WTO in the Uruguay Round I tend to agree.

The Environment Committee (COMENV), with the support of the Agricultural Committee (COMAGRI) in the European Parliament, is considering a motion to reject the proposal and asking for the Commission to withdraw it. The Commission would not be bound by such a motion, but given the divide amongst MS on the GMO issue and the position of the EP, passage of the proposal in the near future is not very likely.

Best outcome

Maybe the best outcome is a prolonged and protracted negotiation on the proposal, allowing a growing number of GMOs to be approved, which an efficient European agriculture will increasingly need in order to stay competitive and be sustainable. GMO seeds and crops are needed to obtain effective tools to cater for the growing problems with climate change, water shortages, environmental pressure and drop in biodiversity. GMOs will allow planting more draught resistant crops, allow for a reduction and more targeted use of pesticides and fertilisers, whilst maintaining or increasing yields.

Farm Europe is delighted to welcome CONFAGRICOLTURA

ROME, 26.06.2015. Today, Mario GUIDI, president of Confagricoltura, finalised the organisation’s FARM EUROPE membership.

On finalising Confagricoltura’s Farm Europe membership, Mr. GUIDI said: “Italian agriculture, as with all European agriculture, requires ambitious policies led by Brussels. It can not be satisfied with a weak consensus and no real strategy or economic ambition. Europe needs to take into account all dimensions of agriculture, which is, and will remain, a central pillar of the European economy. It is urgent to address the economic challenges faced by agricultural industries and to consider future developments of the CAP, submitting truly ambitious ideas on the subject. Today, at European level, the decision-making process is much longer than it has previously been. If we want an ambitious CAP tomorrow, the work must start now and be supported by strong arguments. It is in this spirit that Confagricoltura will work closely with Farm Europe to stimulate thinking, particularly on issues related to innovation and exports, which are two essential keys to future growth. ”

Yves Madre, co-founder of Farm Europe added: “We welcome Confagricoltura as a new member and major contributor to the think tank. This cooperation enables Farm Europe to gather agricultural expertise from the Baltic to the Mediterranean Sea. Future agricultural policy tools, at European level, should tackle all of the economic problems farmers are facing if we want Europe to keep its leading position in the world.”

Launched on the 29th of April, the think tank Farm Europe aims to develop thinking on effective solutions to unlock political levers so as to increase both the competitiveness and the sustainability of the European agricultural and food sector and to participate in debates with forward looking proposals. Farm Europe’s team builds upon the economic and technical expertise of the organisation’s members so as to cover all policy fields that impact rural economies, with a particular focus on agricultural and food policies, the Common Agricultural Policy, as well as food standards, the food chain, the environment, energy and trade-related issues.

More information:

www.farm-europe.eu

info@farm-europe.eu

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