A new vision for agriculture
momagri, movement for a world agricultural organization, is a think tank chaired by Christian Pèes.
It brings together, managers from the agricultural world and important people from external perspectives,
such as health, development, strategy and defense. Its objective is to promote regulation
of agricultural markets by creating new evaluation tools, such as economic models and indicators,
and by drawing up proposals for an agricultural and international food policy.
A look at the news

CAP budget laminated by Union Presidency?

November 5, 2012

Less than three weeks before the November 22-23 extraordinary summit on the European 2014-2020 budget in Brussels, the Union Cyprus Presidency is recommending to cut by “at least €50 billion” out of a total of €1,033.235 billion, the budget proposed by the European Commission for the 2014-2020 years. All budget headings would be affected by the cutback, and thus the CAP would not be spared. In addition, the Union Presidency warned that the figures only represent a “starting point,” and that “more significant cuts [will be] required to reach a compromise.”

Consequently, the proposal issued on October 29 plans to allocate funding up to €379 billion for the budget heading that includes agriculture, i.e. 1.94 percent lower than the Commission’s draft, which was already below the current budget. Out of this total, the Presidency plans for a two percent drop in the budget allocated to the first pillar compared to the Commission draft. As far as direct payments are concerned, they would be decreased by 1.3 percent compared to the Commission draft. The second pillar would also be affected by funding cutbacks, albeit to a lesser extent.

At least seven countries are supporting the Presidency’s scheme, including Germany and the United Kingdom, which feel it should be taken one step further and are considering a €120 billion reduction in the amounts proposed by the Commission, in order to stay under the contribution threshold of one percent of gross national income (GNI).

Countless voices have been raised against the proposal. Approximately 15 nations––particularly from Eastern Europe––are staunch defenders of the Commission’s budget draft and are rejecting any new restriction. Similarly, France might boycott the budget vote, especially if the CAP is impacted by such a budget reduction. The Copa-Cogeca is also opposed to all new proposals by the Cyprus Presidency, and “warns against the significant cutbacks they would inflict on agricultural expenditures, thus jeopardizing food security and rural development,” while pointing out that the Commission’s draft already includes a 10 percent reduction of the CAP budget in real terms.

As far as European organizations are concerned, the Commission indicated that it “does not support” the project of the Presidency, and the European Parliament, for its part, said it is “dismayed” by such proposal “because it will inevitably threaten the future of several key policies and programs” of the European Union. Because let’s not forget the CAP is the only integrated European policy leading to a consolidated comprehensive budget that seems to be significant compared to the EU budget, but that is small compared to the European GNI, since it only represents 0,4 percent. Other national expenditures by member states for other policies––such as transportation or education––generally represent amounts that are quite higher.

The Cyprus Presidency is hoping to reach a compromise during the November summit. But the situation is so tense that some senior European officials do not hesitate to invoke a “miracle”, since the budget agreement to be reached by leaders of governments on November 22-23 currently seems very remote. In case of failure, the budget would be kept based on the 2013 ceilings, until an agreement is reached.

However, one thing is already certain. In a context of high agricultural price volatility, the CAP would be unable to meet its assigned objectives, namely increasing the productivity of agriculture, ensuring a fair standard of living to farmers, stabilizing markets, and lastly, guaranteeing food security at reasonable prices for consumers.

We must first and foremost avoid to giving in to the appeal of a priori effective budget cuts, which are nevertheless economically and strategically risky for the EU. For European agriculture represents a key strategic sector, since the EU is the world’s second largest agricultural producer and the second largest exporter.

Reforming the CAP must not herald the end of the sole integrated European policy, but instead put European agriculture at the heart of the challenges of the 21st century. It is therefore crucial that current debates maximize its budgetary and economic effectiveness through a flexible rationale adapted to the highly volatile nature of agricultural prices. This is precisely what momagri advocates with its “Another CAP is possible” proposal.
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Paris, 24 June 2019