The Commission is optimistic on its reform package
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CTA. 2003. The Commission is optimistic on its reform package. Agritrade, July 2003. CTA, Wageningen, The Netherlands.
Permanent link to this item: http://hdl.handle.net/10568/52449
The European Parliament, the Commission and Member States are broadly in...
The European Parliament, the Commission and Member States are broadly in agreement on the goals of reform, according to Agriculture Commissioner Franz Fischler, speaking in the European Parliament on June 3rd 2003. However, he acknowledged that differences persisted over how the reforms should be organised and what concrete steps should be followed, but he felt that these differences could be overcome in time for the adoption of the reform package at the EU Council meeting later in the month. He noted that there were solid arguments for leaving various sensitive areas out of decoupling, but emphasised the down-side of such a move in terms of the wider reform objective of ensuring more market-related production decisions. He argued that the EU had lost export opportunities in recent years as a result of the deferral of reform and that EU cereal producers will not be able to find adequate outlets for their products unless reform continues. He expressed the view that intervention should in future provide a safety net and not be a substitute for price setting by the market. Comment: An article in 'Inside US Trade' has taken a far less optimistic view, revealing sharp divergences amongst EU member states on how decoupling should be implemented. The overall conclusion is that decoupling is likely to be far less extensive than initially envisaged. This would appear to be consistent with the Commissioner's line that there are 'solid arguments' for leaving various sensitive areas out of decoupling. Much of the disagreement revolves around the basis for calculating decoupled farm payments and the extent to which there should be flexibility between member states in how the new system is implemented. According to 'Inside US Trade' there are also disagreements within the EU on the extent to which existing payments should be cut to finance further reform and the extent to which funds should be transferred to the rural-development window. From an ACP country perspective it should be noted that any weakening of decoupling through the maintenance of parallel systems of coupled payments is likely to increase EU levels of production, whilst allowing prices to fall. This is likely to lead to higher levels of EU exports at lower prices, with consequent losses for competing unsubsidised ACP suppliers in areas where cropping patterns overlap with those of the EU.