European policy consultants
Rural development and renewable energy

Council of Farm Ministers, 16th July

The discussions focussed on specific issues in:
· the proposal for a regulation on support for rural development (rural development regulation - 15425/1/11); and
· the proposal for a regulation establishing a common organisation of the markets in agricultural
products (the Single CMO regulation - 15397/2/11).

The new President of the Farm and Fisheries Council, set out his presidency's priorities for the next six months.

There was a further update from the Danish Minister on progress during her presidency of the Farm and Fisheries Council duruing the first half of the year.

Most of the delegations agreed that in light of the challenges modern agriculture faces due to
climate change and price volatility, risk management has become essential for farmers. Many
member states also supported the Commission proposal on risk management through the second pillar, allowing flexibility to member states in the implementation, as well as the possibility of combining these measures with other actions under pillar II.

However, some delegations were not convinced about the support for risk management under the second pillar, as they are concerned that the measure would require a high level of funding, and therefore absorb a large portion of their national envelope at the expense of other measures, such as climate and environment actions.

Several delegations (including UK) expressed the same concern about the implementation of an income stabilisation tool and oppose this instrument. In their view, the provisions of Pillar I provide sufficient safety-nets for farmers income.

The majority of delegations found the rates of support proposed by the Commission to be about right. Some, however, expressed the wish to see the level of aid intensity increased, in order to match current levels of support. Several delegations also requested the reduction of the 30% threshold in order for a farmer to qualify for support (note: this threshold is based on WTO rules, so it is unlikely the level will be increased).

There was broad support within the Council for the proposed 'exceptional support measures'.

Some member states considered that the proposed approach is not sufficiently ambitious and that more support could be needed.

On the market disturbance provision (Article 154), some delegations would prefer to have a clear definition of crisis or more reassurance that these measures will only be used in truly exceptional situations.
A majority of the member states supported extending the scope of this provision to all
products (ie. deleting Article 154(2), which limits the scope).

As regards measures concerning animal disease and loss of consumer confidence due to public, animal or plant health risks (Article 155), most of the countries were satisfied with the Presidency text and the extension of the scope of measures on loss in consumer confidence to all sectors of the single CMO.

Some member states asked for an increased co-financing rate. Most member states said they attached importance to the measures to resolve specific problems (Article 155), and were
in favour of maintaining a high degree of flexibility for the Commission to act.

The CAP reform package was presented by the Commission at the Agriculture Council meeting in October 2011.
The Council has already held general policy debates on the proposals for regulations
on direct payments, rural development and on the single common market organisation during the Agriculture Council meetings in November and December last year and in January this
year.
In March this year ministers held a debate on the simplification of the CAP. At its meeting in April, the Council held an orientation debate on young farmers, small farmers, voluntary coupled support and top ups for farmers in areas with natural constraints, as well as on internal distribution, the definition of "active farmer" and the capping of support to large farms.

In May the Council held another orientation debate on the greening of the CAP and in June there was an earlier discussion on rural development issues.

There are reports on all developments of significance in the council on this website.

The future of risk management in the Common Agricultural Policy was a divisive subject for EU farm ministers at the July Agriculture Council meeting in Brussels.

Member states could not agree on whether it was the farmers’ own responsibility to look to the market place to manage risks, or whether public money should fund insurance and mutual funds.

The concept of a European income stabilisation tool, ie a mutual fund to support farmers who have incurred a loss greater than 30% of their income, was also highly controversial. UK minister Jim Paice stated that “this should not be part of risk management package in any form” as it would involve increased bureaucracy and cost at farm level. He went on to quote the Commission’s own impact assessment figure of €7 billion per year if all Member States used it.

“Exceptional support measures” in the single market regulation was the final agriculture item on the agenda and prompted the more liberal Member States such as the UK, Denmark and Sweden to emphasise the need for such measures to be market orientated and used only in genuine crisis situations.

With thanks to NFU for this item on risk management. We recommend that farmer members of NFU refer to the regular reports from their Brussels office.

programme-of-cyprus-presidency-in-fandf-council-july-12.en12.pdf (75 Kb)