Outcomes of the Czech Presidency

1. No Agreement Reached on Future of the CAP Post-2013

2. Council Conclusions Adopted on Quality Policy and LFA Communications

3. Discussions on the EU Dairy Market Situation Continue

The Czech Presidency ended last week following the final Agriculture Council meeting of the Czech Presidency which took place in Luxembourg on the 22 and 23 June. Ministers discussed three of the issues prioritised by the Czech Presidency, namely the future of the CAP and more specifically the role of direct payments, agricultural product quality policy, and the future classification of ‘other’ or ‘intermediate’ Less Favoured Areas (LFAs).

However, whilst The Council was able to agree unanimous conclusions on two recent Commission Communications, on product quality policy and retargeting aid in LFAs, six Member States refused to endorse draft conclusions on the future of the CAP prepared by the Czech Presidency. These drew on discussions at the Informal Agriculture Council held in Brno recently. As a result, the text will now have the status of Presidency rather than Council conclusions and will therefore not carry any official weight in future discussions; a similar outcome to that achieved by the French Presidency last November.

1. No Agreement Reached on Future of the CAP Post-2013

...the most reform-minded Member States... reacted to its [the text drafted by the Czech Presidency] emphasis on the role of direct payments in a future CAP...

Objections to the draft conclusions on the future of the CAP fell into two camps. On the one hand, the most reform-minded Member States (UK, Sweden, Denmark and the Netherlands) [a] were thought to be uncomfortable with the tone of the text. In particular, they reacted to its emphasis on the role of direct payments in a future CAP, thus precluding significant redistribution of the CAP budget towards more targeted forms of Pillar 2 type payments and a much smaller Pillar 1.

On the other hand, two new Member States (Poland and Slovakia) [a] objected to the omission of an explicit call for the current disparities in the level of direct payments received by the New Member States and the EU-15 to be addressed. The final text merely suggests that ‘alternatives to the historical reference periods and data currently used’ as the basis for distributing direct payments need ‘to be considered’.

The Swedish Presidency, which starts on 1 July, will now take forward informal discussions on the future of the CAP, by emphasising the role of rural development in a future CAP - although climate change is likely to remain its overarching priority.

Given Member States’ reluctance to concede ground in the debate on the future role and function of the CAP or to pre-empt formal discussions on the EU Budget, it appears unlikely that the Council will be able to agree any meaningful conclusions on this matter until next year at the earliest, coinciding with the publication of a Commission Communication on the future of the CAP expected in late summer of early 2010.

2. Council Conclusions Adopted on Quality Policy and LFA Communications

The Council unanimously adopted conclusions on two recent Commission Communications on:

...the Commission may not publish legislative proposals for redefining ‘other’ LFAs until ‘as late as autumn 2011'.

The former commits Member States to produce maps by 31 January 2010 showing which areas would be eligible for intermediate or ‘other’ Less favoured Area (LFA) payments based on eight biophysical criteria linked to soils, climate and terrain. Member States will also be able to submit ‘additional criteria and/or thresholds, as well as alternative and/or additional fine-tuning indicators which they may consider appropriate’.

It now appears that the Commission may not publish legislative proposals for redefining ‘other’ LFAs until ‘as late as autumn 2011’. Legislation had originally been due to be in force prior to 1 January 2010.

An overview of the implications of the Commission Communication can be accessed here, whilst an analysis of its implications in Finland (a Member State where almost all agricultural land is currently eligible for LFA) can be viewed here.

The conclusions on the Commission’s Communication on Agricultural Product Quality Policy (published on 28 May 2009), which is intended to increase the competiveness of EU agriculture, include commitments for the Council to:

  • work towards improving communication amongst farmers, wholesalers and consumers with regard to the quality of EU agricultural products and labelling;
  • simplify administrative procedures for farmers and producers to enter the range of schemes currently recognised at EU level (e.g. organic, Geographical Indications); and
  • consider the potential of using private and national food certification schemes which are coherent with good practice guidelines to be developed by the Commission.

The document also acknowledges the Commission’s intention to keep its options open for tabling ‘possible legislative initiatives’ related to quality policy more broadly. An analysis of the Communication can be accessed on the CAP Health Check website.

3. Discussions on the EU Dairy Market Situation Continue

Finally, the Council discussed ongoing adverse market conditions in the EU dairy sector. Agriculture Commissioner Mariann Fischer Boel indicated that the Commission has already taken steps to address the situation which have resulted in the withdrawal of the equivalent of 1.6 per cent of the annual milk production from the EU market through intervention storage and export refund measures, leaving the Commission with limited room for manoeuvre within WTO rules.

However, in an indication of the political importance of the dairy sector in some Member States (notably France and Germany who recently published a joint letter to the Commission in response to the 'dairy crisis'), the topic was also discussed by EU Heads of State at the European Council in Brussels on 18 and 19 June, resulting in a formal request for the Commission to present ‘an in-depth market analysis within the next two months, including possible options for stabilising the dairy market’. The report will now be presented to the Agriculture Council at a special meeting convened by the Swedish Presidency on 7 September [b].

[a] Agra Facts No. 48-09 (22/06/09) Farm Council

[b] Agra Facts No. 52-09 (03/07/09) Extra Farm Council Confirmed for Sept 7

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PUBLICATION DATE

07 Jul 2009

AUTHOR

IEEP

FURTHER INFORMATION

The Institute for European Environmental Policy coordinates CAP2020. It is an independent not for profit institute which undertakes research in a number of policy areas including agriculture and rural development.


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