Cause and Effect in European Politics and Law

Restriction of intermediaries and appointment of an agricultural ombudsman

Adelina Marini, July 19, 2010

The European Parliament approved a resolution on July 8th on the future of the Common Agricultural Policy (CAP), based upon the report of the British member of the European Parliament George Lyon (ALDE). The main message in the resolution is that the CAP budget for the next financial period (2013-202) to remain at least the same and not be reduced. In the same time, although the initial text called for a postponement of the alignment of farmers' subsidies between the new and old Member States for 2020, instead of 2016, the approved resolution insists that the alignment should take place from the next programming period, which starts in 2013.

One of the basic functions of the CAP is cohesion of EU regions as well as prevention of depopulation of rural areas. According to the approved document, a great danger, created by the economic crisis, is the capacity differences of Member States to deal with it to lead to an increase of differences among rural areas in the Union. This is why CAP should respond to this challenge by starting to register the differences in structure and the necessity of agriculture modernisation.

With regard to the depopulation tendencies, the resolution calls for the creation of long-term policies, directed towards younger generations and women in rural areas. One of the ways to achieve this is the creation of friendly conditions for loans for investments, recognition of professional skills and an easy access to the agricultural economic life. Among the main obstacles for young farmers is high starting expenses, high prices of land in some parts of the EU as well as access to credit.

The resolution pays special attention to the problem with intermediaries. Although they are not mentioned explicitly, it is called for measures that would increase the rights for negotiations of primary producers and producers' organisations with other economic players in the food chain. A good measure would be improvement of information exchange in order to help better coordinate demand and offer, the resolution says.

Even changes in competition rules are being proposed in order to make primary producers' organisations more efficient and to help them expand. To make this easy to implement in practice, the European Parliament recommends the appointment of a national and/or a European ombudsman who would solve disputes within the food chain.

Direct payments reduction would have devastating consequences not only for the farmers themselves but also for the rural areas and the related to them public services, for the consumers and the entire society too, the resolution says. This is why it calls for keeping direct payments. They are part of the first pillar of the bi-pillar Common Agricultural Policy. The second one is rural areas development.

The European Parliament also calls for something very important, but not very well explained - boosting of investments in research and innovation in agriculture in order to help it respond to the new challenges (climate change, energy efficiency, etc.). Whether this means intervention in various crops, aimed at making them sustainable to water shortages or drought it is not clear but is recommended the active presence of agriculture consultants in the regions, who would help farmers in their efforts to secure ecological common goods.

A very important element of European Parliament's resolution is the insistence CAP not to be renationalized again. This is why direct aid should continue to be entirely financed by EU's budget. Co-financing is being rejected by MEPs because it might hamper loyal competition in the single market. Another important element is the call for the introduction of an obligatory requirement only active agriculture to be rewarded.

The voted resolution is not a legislative one. It is just a recommendation with which MEPs call on the Commission to take it into account when preparing legislative proposals or communications. On July 19 and 20 in Brussels a conference taking place on the future of the CAP. This conference will also be part of the proposal the Commission is to present in the autumn.