Paris, May 12, 2014
The European Union goes against global agricultural and food strategies:
There is an urgent need to set a new course for the CAP!
Ladies and Gentlemen,
Few candidates to the European election have an agricultural background, or know farming. Yet the ability of the European Union to feed tomorrow’s generations––in both quantitative and qualitative terms––will rest on your decisions as elected officials.
Thus agriculture holds an increasingly strategic place among the key issues facing the major world powers (United States, China, India, Brazil, Russia and Canada), due to the combination of several reasons: The world population growth, repeated food crises, as well as globalization, the tensions in Eastern Europe, the new situation of agricultural markets that includes financialization and the amplification expected from market instability.
Therefore, agriculture has once again become a major geopolitical issue in the international arena, and will be the root of severe tensions regarding global food security in the upcoming years.
Yet the newly adopted CAP for the next seven years totally ignores this geostrategic and extremely sensitive context.
Worse even is the fact that, in our globalized and free trade environment, our new agricultural policy does not provide farmers with any means of action to stem the destructive trend of price hyper-volatility. The problem lies with a flawed economic approach that underestimates market risks involved in agriculture, and that rejects the effectiveness of stabilizing mechanisms.
This has led the European Union to be the only region in the world to base most of its agricultural policy on direct subsidies––the Basic Payment Schemes––that are totally disconnected from economic reality, at a time when the last American decoupled subsidies have just been eliminated.
All major producing countries have implemented insurance and counter-cyclical mechanisms to fight agricultural market instability. The recently adopted American Farm Bill, for instance, guarantees farmers’ incomes through clever mechanisms.
These policies also include various systems to stimulate demand, such as food aid to 47 million Americans (over half of the U.S. budget for agriculture), or to support to develop biofuels in Brazil that automatically secure a share of the country’s agricultural supply.
In addition, the CAP ignores the new economic reality of agriculture
It can even be said that initiating European farming activities as exposed as they are in the free trade agreements with the United States and the Mercosur would trigger a considerable weakening of the condition of European farmers. The EU already imports the equivalent of the French utilized farmland (27 million hectares or 66.7 million acres). It is therefore high time to readdress the CAP to prevent an aggravation of the situation.
Taking into account the fact that experts agree to acknowledge that agricultural market instability and international competition will further harden in the upcoming years, there is an urgent need to raise the following awareness: The CAP cannot remain a policy that goes against the flow of the world’s other major agricultural policies.
In the late 1990s, Dacian Ciolos, the European Commissioner for Agriculture, straightened the initial path that aimed to deregulate the agricultural support systems. But changes must be accomplished in the next term. The mid-term revision of the multiannual financial framework in 2016/2017 might provide an opportunity.
The future members of the European Parliament can therefore make every effort at the start of their term to instigate a thorough analysis providing the 2020 CAP with a new strategic course.
What are the foundations upon which such required analysis must be based? First, a study of the economic realities of agriculture, followed by a comparison with the agricultural policies implemented by the other major powers throughout the world.
Agricultural issues cannot be limited to plain trade considerations shaped by applying international trade theories. The security of food supply, combined with maintaining political and social balance, gives agriculture a specific statute that is precisely associated with national security.
In this respect, momagri will, as early as July 2014, propose a new strategic course for the CAP. A new 2020 CAP, which will be primarily overhauled based on counter-cyclical guidelines to stabilize incomes at a constant comprehensive cost for the EU budget, while being widely compatible with European commitments towards the WTO.
With this in mind, we sincerely hope that you will commit to support:
- The geostrategic nature of agriculture and its ability to feed the European population under conditions of firmly established food security;
Thanking you in advance for the attention you will give to these issues, I remain
- The introduction of mechanisms protecting farmers from erratic market variations to provide them with the required visibility for livelihood farming work;
- The refusal of any free trade agreement in a context where our farmers would not have the same defense as their competitors to confront market instability.