The Commission's presentation of CAP reform
MetadataShow full item record
CTA. 2003. The Commission's presentation of CAP reform. Agritrade, August 2003. CTA, Wageningen, The Netherlands.
Permanent link to this item: http://hdl.handle.net/10568/52486
In presenting the outcome of the final round of negotiations on CAP reform...
In presenting the outcome of the final round of negotiations on CAP reform at a press conference on June 26th 2003, the EU Agriculture Commissioner Franz Fischler claimed that the EU had 'largely said goodbye to an old system of support which distorted trade' and he maintained that the new system would be more 'trade friendly', and would put the EU 'on the offensive at the WTO negotiations in Cancun in September', with the EU looking for 'something in return' for the concessions they will now be able to make. He acknowledged that the reform was a compromise but maintained that it was 'an acceptable one', and claimed that the new system would no longer promote overproduction so that the trade-distorting effects of EU policies would be substantially reduced. In a speech to the European Parliament on July 9th 2003, Commissioner Fischler sought to evaluate the final agreement on CAP reform. He began by reiterating the objectives of reform, namely to: make a substantial contribution to stabilising farmers' incomes and at the same time to diversifying their farming activities; promote healthy and better quality foods, produced under environmentally sound production methods, which respected animal welfare; improve the public image of agricultural-support programmes. He then set out the reforms agreed, namely: a multiple-choice system for the introduction of the single farm payment scheme from January 2005 (with exceptions upon justified request until 2007); the introduction of flexibility without distorting competition; the linkage of the single farm payments scheme to compliance with a range of standards (cross compliance); the use of the 2000-2002 payment entitlements as the basis for calculating the single decoupled farm payment. The introduction of decoupling alongside specific sector reforms will it is argued 'strengthen the EU's negotiating hand in the WTO Ministerial conference in Cancun in September'. Commissioner Fischler maintained that the EU is now well placed to reach agreement in Cancun and that it is now up to other countries to match the EU's concessions. Comment: The claim that the reform will lead to less trade distortion is only justified in a highly relative context, as the reference point for the claim is the level which EU production would have attained by 2009 were existing policies to be pursued until then. If this reference point is used then EU production levels post-reform in most major commodities subject to reform will be lower than in the scenario without reform. However, if the point of reference is current levels of EU production then post-reform EU production will be higher, but at prices that will be much lower than those currently prevailing. This will enable the EU to clear its markets more easily without recourse to WTO-restricted trade instruments. EU claims to the effect that the new policy will be less trade distorting thus need to be subjected to close and critical scrutiny.