|Paris, 3rd June 2016
France’s proposals for the CAP post 2020:
“Yes, to the introduction of countercyclical mechanisms! No, revenue insurance will not save European farmers”.
The French government made a written proposal and called for the launch of discussions on the reform of the next CAP during the last informal Council of 31st May.
For Momagri, the most important feature of the French proposal is the desire to introduce a countercyclical nature to the CAP.
Consequently the proposal for blocking part of the aid received by farmers on a compulsory savings account, has the merit of indirectly introducing the idea of a countercyclical nature. But would it not be simpler to pay aid directly depending on the market situation?
The aid for oilseeds in the 1980s was consistent with the countercyclical principle. More than thirty years later, with current IT resources, why would this not be feasible?
All the more so since in their White Paper, Momagri demonstrated that a system of countercyclical aid did not run the risk of running off budget.
And moreover Momagri insist in expressing their concern on the importance that the French government gives to revenue insurance.
If insurances and funds are quite suitable for risks usually covered by mutual funds such as climate and health risks, this is not the case for market risks. Indeed, and the current crisis demonstrates, when markets collapse, it is all farmers who bear the risk.
Without a common agricultural policy that will provide a foundation for market risk management through countercyclical mechanisms, insurance will only remain at an insufficient level of coverage in the event of major crises.
In fact, in conclusion, this contribution seems more like a review of past action than an innovative project, capable of giving new impetus to the CAP.
The structural instability of agricultural markets means the architecture of the CAP must be rethought so it is effective and reactive during crises and thrifty when prices are higher than production costs, which today is not the case.
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