First exchange on CAP reform proposals

At the EU Agricultural Council at the end of January 2003 Agriculture Commissioner Franz Fischler presented the Commission's proposed regulation for the reform of the Common Agricultural Policy. He highlighted the findings of recent studies which concluded that the reform proposals would remove structural imbalances in the rye, beef and rice markets, and, despite commonly expressed fears, would not lead to farmers leaving the industry (indeed the reforms would boost incomes overall). Commissioner Fischler also discussed the proposed reform of the dairy regime and the modification of the approach to 'dynamic modulation', the implementation of which would be deferred until 2006 and which would now include limits on how much money could be moved over to rural-development expenditure. He pointed out that the focus of reform remained that of 'de-coupling' aid from production, linked to 'cross compliance' with wider objectives. This he argued would lead farmers to switch to new, more profitable products. He emphasised, however, that production-related aid would be maintained in cases where de-coupling would pose 'a genuine risk of production dropping to unacceptable levels' e.g. for durum wheat, potato starch, rice and feed proteins. The EU would introduce de-coupling 'only so far as is necessary to meet our set goals'. In terms of the relationship of CAP reform to the WTO agricultural talks, Commissioner Fischler was very explicit, stating that 'the driving force behind our reforms is not the WTO, it is our strive to change our farm policy to give our farmers, consumers and taxpayers a better deal!' Comment: ACP countries will no doubt be familiar with the discrepancy between the Commission's rigid invocation of WTO principles in its dealings with them and its flexibility when dealing with European farmers. According to the USDA, the 3½-hour televised debate on CAP reform revealed ongoing divisions in Europe over the Commission's CAP reform proposals, with Sweden, the UK, Denmark, the Netherlands and Germany supporting the review whilst others opposed. Support for de-coupling remains limited, with member states expressing concern over the impact on population levels in marginal farming areas.