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Will the CAP fit?

2 into 1 won't go!

(Common Agricultural Policy, 2002)

(European Union)

Reports:
 
(Emphasis added)
Church attacks proposals
The Church in Ireland, North and South, has expressed serious concerns about the implications of the mid-term review of the CAP for life in rural Ireland.

It says it is worried that farms of all sizes may disappear.

In a statement issued to the Farmers Journal, by its European Affairs Panel, it comes out against the Fishler proposals on decoupling and modulation.

It  says the both of these measures are likely to affect farm incomes negatively.

Futhermore, it adds, the forthcoming  enlargement of the European Union, "which we strongly support", cannot but have an adverse effect on the share of EU  funding directed at farmers in Ireland.  (Ed IMR:It  is not clear why enlargment, on apparently negative terms, was therefore "strongly" supported.  Also,  where is CORI?)

(Farmers Journal, 28 Dec 2002)
 

27 Dec 2002

Farm Council meeting:
27 and 28 January 2003.
 
Commissioner Franz Fishler is to present his final proposals to the Farm Council meeting on 27 and 28 January 2003.

(Farmers Journal, 28 Dec 2002)

27 Dec 2002

"Tractor-cade" for Dublin 6 - 10 Jan
A week-long "tractor-cade" protest will be organised by the IFA in early January 2003 to protest at falling farm incomes, and at  the Governments failure to halt the slide, ie Monday 6 January to Friday 10 January.

It will involve some 290 tractors in all.

(Farmers Journal, 21 Dec 2002)
 

27 Dec 2002

 EU proposals to WTO
 
The EU is proposing to:

1. Reduce Import tarriffs by 36%,

2. Reduce Export subsidies by 45%, and

3. Reduce trade distorting  domestic  support by 55%.

Many feel that Franz Fishler has shown too much of his hand at this early stage of  the EU/WTO nnegotiations.   So, is he acting on his own?

It seems that the EU is in a hurry to get cheaper imports of food before it has to pay out too much to Poland  (Ireland's  share is only a flea-bite in the overall).  The chief beneficiaries are likely to be:

Argentina,
Australia,
New Zealand,
Brazil.
 
In New Zealand (where they seem, like the Swedes, to get everything right),  all subsidies and supports were abolished, some few years ago, with benefical results.  We are not told what  the down-side is.

It is not clear what the benefits to Polish (or Irish, or indeed European) rural communities is to be.

Do we  want a Society or an Economy?

(Main source: Irish Farmers Journal, 21 Dec 2002)

27 Dec 2002

Common Agricultral Policy:
Payments 2002 -2013

A view based on Information as at 7 Nov 2002

 
 Schroder 
Chirac 
  Ahern 
Other         sources 
 Total
pay-
ments		  What           we think 
Year
Dom.
Exp.
%
Irish

%
En-
larg.
%
Irish

%
En-
larg.
%
Irish

%
En-
larg.
%
Irish

%
En-
larg.
%
Bud.
Exp.
E.bn
  Irish

%

 En-
 larg.
%
 Total 
Pay- ments
1
2
3
4
5
6
7
8
9
10
11
12
13
14
2002
100
100
  
100
  
100
        E41.8bn(?)
 100 
 nil 
 100 
3
103
100
  
100
  
100
        
 100
nil 
 100 
4
106
100(?)
Addl.
count.
100(?)
Addl.
count.
100(?)
Addl.
count.
  
25
  
 75
 25
 100 
5
109
  100(?)    100(?)  
100(?)
    
30
  
 70
30 
100 
6
113
  100(?)    100(?)  
100(?)
    
35
E42.8bn
 65
 35
 100 
6
E.bn
  
E27.8bn
E15.0bn
7
116
              
40
  
 60
 40
 101 
8
119
              
50
  
 50
 50
 102 
9
123
              
60
  
 40
 60
 103 
10
127
              
70
  
 30
70 
 104 
11
130
              
80
  
 20
80
 105 
12
134
              
90
  
 10
 90
 106 
13
138
              
100
E48.6bn
 nil
 100
 107 
                           
Total
                    
 nil
 E48.6bn
  

E&0E

Notes:

(a)  It is assumed for the purpose of the above table, that:

1.  Inflation (of expenditure, including domestic expenses) is at 3% per annum.  Inflation of income for Irish farmers is not taken into account.
2. The claims of the existing 15 members are  equal to  those of the 10 applicant countries.

3. The total  budget for CAP subsidies remains the same at  c.E41.8bn (The Fischler Plan).

4.  2002: 100% = same domestic expenditure, same level of grants as in 2002.

This would seem to mean for Irish farmers that in 2004, for instance:

expenditure, including domestic expenses, will have moved upwards to 106% of what they  were, and

subsidy income will have moved downwards to 75% of what it  was, the rest going to applicant countries.

Applicant countries will, in 2004,  have  the same inflation levels, but will receive some 25% of the same budget for subsidies.
(b)  The  agreement  between Mr Schroder and Mr Chirac (apparently in Berlin) was endorsed at the Council meeting  held on 24/5  Oct in Brussels.  The agreement was  that:
 1.   New Member States will receive 25% in  2004  "of the level  of  corresponding payments in the current Union".  This will increase by 5% each year to 40%, and thence by 10% per year until 2013, when it will reach  100% of  "the support level then  applied in  the current European Union."
 2. From 2007, the budget for  agricultural related  support and direct payments would be limited to 1% per  year over the budget ceiling agreed in Berlin for the EU 15  and "the proposed expenditure ceiling for  the new Member States for the year 2006".

 3.  There  is no restriction of Rural Development spending.  This includes REPS,  early retirement scheme,  less  favoured  areas  scheme, and forestry.

Mr Schroder  and Mr Chirac had  somewhat ndifferent  interpretations of  their  meeting.  Mr Chirac  had  "some words" with Mr Blair subsequently, and cancelled a meeting due to  have  taken place between  them.

(c)  If  the Fischler Plan (the same budget for  the 27 as  for  the  15) is  to be  implemented in some form, Irish farmers will receive Nothing in  the  way of subsidies as at 1 January  2013!   Surely this is not intended.  The only way it  can be achieved is by substitution of Rural Development grants for subsidies, but  this  is unlikely given the scale of the grants.  Mr Fishler proposes to meet  Irish officials in Dublin on Monday 11 November 2002.

The prospects for Irish farming, and for the Irish economy, in 2013 and well before it, looks grim.

(d)  Mr Franz Fishler intends  to have a Mid Term Review next  spring.  But Mr Chirac ruled out any  MTR  in 2003.

    Modulation: Payment from farming to Rural Development.  Appears to  have  been  ruled out  for the          period to 2006.

    De-coupling: The dis-connection of  payments for  subsidies and granting maintenance instead   Intended to redce the amunt of food produced in  the EU,  and  increase imports from developing countres,  at presumably reduced cost.

(e)  Year quoted commmences 1 Jan. and ends 31 Dec.

(f) Mr Schroder says subsidies would fall from 2007 onwards.  How is  this?

(g) Germany is paying some 25% of the CAP budget, which is understood to be some 70% of the EU budget.   Therefore, Germany is paying some 18% of the total CAP budget.

(h)  The proposals agreed  and  endorsed seem  impossible of achievement.  Perhaps they were  intended to be  vague!

(i)  See reports  of:

The  Irish Times, 26 Oct, Denis Staunton, Sean MacConnell, Mark Brennock.
Irish Farmers Journal, 2 Nov,  Des Maguire, Pat O'Keeffe Dr  Brendan  Kearney, Eric Donald, Matt Dempsey.
Sunday Business Post, 3 Nov, Finola Kennedy.

End

7 Nov 2002
 
 

According to subsequent reports appearing in the Farmers Journal, the situation for Irish farmers is not quite so bleak.  But there is little cause for complacency.  See subsequent reports in FJ.

With a Mid-term Review of CAP on the cards, new East European  states to  join in 2004, and EU policies currently in turmoil, the (weekly) FJ is essential reading.   Se also Farmers Monthly.
 

27 Dec 2002


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