|Paris, November 23rd, 2016
Right and centre primary elections:
Implementing counter-cyclical aid, a widely adopted proposal
At a time when right and centre candidate finalists in the French primary elections are looking to stand out, Momagri is pleased to note that François Fillon and Alain Juppé have convergent proposals on the need to help our Farmers face market instability. In this regard, they have expressed their willingness to include countercyclical aid in the next CAP, that is to say aid which varies in function of prices.
Counter-cyclical aid is the flagship proposal of the Momagri White Paper “a new strategic direction for the CAP”. Unlike current aid, it is better in terms of budget, whilst being more effective in supporting farm incomes: this avoids throwing public money away when prices are remunerative, in order to truly help farmers in times of crisis.
Here François Fillon explains his vision for agricultural policies in an interview given to Terre-Net on 15th November: “European agricultural policy has broken down. The CAP is currently maintaining a decoupled aid system, disconnected from production, and inefficient. For the CAP I do not want to ban any type of intervention that could manage the great uncertainties of the coming years: insurance, direct counter-cyclical aid, but also intervention on stocks or prices. It will be necessary to have a maintained budget and a capacity for responding ultra rapidly to European farmers”.
For his part, Alain Juppé, in his agricultural program “take action for agriculture” released last spring his plans: “in the event of prices falling below the floor price, a counter-cyclical payment would be made, which would correspond to the difference between the floor price and the market price. This is the logic that led to the development of crop insurance in 2005, and is the cornerstone of the Farm Bill” voted in 2014 in the United States.
The only difference to be highlighted on this point is simply semantic. It comes from the understanding of the term in French: Alain Juppé is very literal when speaking of counter-cyclical aid, whereas François Fillon, in a similar way to Momagri, speaks of counter-cyclical aid in reference to mechanisms of the countercyclical policy type.
While volatility on European agricultural markets has never been higher, it is time to implement a countercyclical aid system that will form the basis of a coherent system of prevention and risk management for the next CAP, so as to restore its full economic dimension.
For 2015, almost one-third of French farmers reported earnings of less than 354€/month. And the year 2016 will not be any different in a context where European producers are the most affected by lower international prices.
Whilst agricultural issues were not much discussed during the right and centre primary televised debates, after reading documents and websites it is clear that most candidates are nonetheless largely invested in the subject. Let us hope that the next stage of the presidential campaign will be up to the mark and that all parties fully grasp the terms of the agricultural debate so as to enable the future majority to remove the CAP from its current deadlock caused by previous reforms.
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