European agri co-ops have warned EU farm ministers about the effect potential cuts to the Common Agricultural Policy budget might have on the sector.
In May, the EU commissioner for agriculture, Phil Hogan, confirmed the organisation was considering a cap on the total amount of subsidies received by farms under the CAP, a measure likely to affect big farms more. The EU budget is being reviewed in light of Brexit and other challenges faced by the continent, which will leave a funding gap.
Under these plans, farmers would see aid drop to €365bn (£321bn) for 2021-2027, a decrease of 5% under the current CAP. The figure would account for 30% of the EU’s total budget, down from 45% 20 years ago. Currently, farmers receive direct subsidies also known as Pillar 1 payments, as well as rural development funds, as part of Pillar 2. The Commission intends to make reductions in both pillars.
Attending a high-level meeting with EU ministers of agriculture and fisheries on 18 June, Joachim Rukwied, president of the Committee of Professional Agricultural Organisations (COPA), said: “We cannot accept any EU agricultural spending cuts. A strong budget is vital for the future of agriculture and of rural areas.
“We are very concerned about the impact of the Commission proposal on the future CAP. We want a strong, competitive and sustainable CAP in the future, with common and simple rules across the EU. The new delivery model outlined in this proposal will not deliver a real simplification for farmers.”
He added: “We are very concerned that direct payments, the best way to stabilise farmer’s incomes and to help them to better manage income risks, are being cut. Farmers’ incomes are already 40% of average earnings and are continuing to decline, causing an exodus from the rural areas, especially the young.
“We reject any capping or degressivity of payments as proposed by the Commission. It is crucial to ensure that there is no renationalisation of the CAP, and it is backed up by a stronger budget.”
Thomas Magnusson, president of the General Committee for Agricultural Cooperation in the EU (Cogeca), also added that the two organisations were pleased the Commission had put a greater emphasis on smart farming and risk management in its plan. But he warned the proposed cut could endanger rural development.
Referred to market difficulties facing some European agri co-ops, he said: “Reductions in cereals, oilseeds, forage output are forecast in some cases, due to bad weather conditions, with drought seen in some northern countries and floods in some southern countries.
“EU sugar beet growers have also been badly affected by high world stocks and low prices. The pork market meanwhile remains fragile but stable. On the dairy market, butter prices are seeing historical highs, reaching 589 euros/100 kg today and the skimmed milk powder price is gradually recovering at 152 euros/100 kg, with indications that demand is growing.”
The meeting also focused on the Spanish farm minister’s opposition the US decision to impose import duties on Spanish table olives.
Mr Pesonen said he welcomed the news that the Spanish minister and the EU Commission had backed the call to stop Spanish olives facing taxes of 34.75% to enter the US market, which he described as “protectionist”.
He added: “We are very disappointed with the US Department of Commerce decision on Friday to impose anti-subsidy and anti-dumping duties on Spanish table olive imports, especially since the product is very popular among US consumers. It is unjustified and disproportionate and it goes against our common interest to develop good trading relations with the USA.
“The key reason why Spanish imports of black table olives are so competitive is because producers have invested a lot in innovative techniques. They should not be penalised for this.”
The decision is currently pending final confirmation by the US Department of Trade. According to Copa-Cogeca, Spanish imports have already faced additional duties totalling 21.6% since January this year, causing Spanish exports to the U.S. to drop by as much as 42.4% in the first quarter of 2018.
