SUBSCRIBE

Breaking News on Food & Beverage Development - EuropeUS edition | Asian edition

Headlines > Market Trends

Weekly comment

CAP reform circus re-opens - but this time it’s serious

By Mike Stones , 10-Jan-2011
Last updated on 10-Jan-2011 at 14:19 GMT

Roll up, roll up, the Great CAP Reform Circus is back in town. Missing those long arguments about the future of farm support? Hungry for more debate about how best to limit spiraling European farm commodity prices?

Relax: The big top that is farm policy debate has already been hoisted as European politicians begin to negotiate reforms to the Common Agricultural Policy (CAP) due to be set in place from 2014.

After so many years of introspection about farm support, it is tempting to dismiss the latest round as another circus performance. But the trend towards rising global farm commodity prices lend these discussions an urgency not seen before.

Confession

Confession: I like direct farm support; I think it is good and wholesome. This is not motivated solely by my small-scale family farming interest in northern England. Instead it is born of a genuine belief that, in an increasingly uncertain world, planned direct support of farm incomes is the best way to guarantee supplies of safe, responsibly-produced and reasonably-priced food and food ingredients.

Needless to say, this perspective is not universally popular.

First act to take centre stage in the Grand Policy Ring is Caroline Spelman, UK environment secretary. Rising food prices provide the opportunity to cut direct farm support payments and eventually abolish them, she told the UK Oxford Farming Conference last week.

Instead of direct income support (opponents prefer the weasel word, subsidy) farmers should receive payment for their work to beautify the environment. So instead of optimising food production – farmers should focus on installing stone walls, planting hedges and wild flower meadows.

Let the US plant soy beans from fence-post to fence-post to harvest not food but biofuel.

Let fire and flood devastate world wheat supplies. At least, the restoration of Britain’s wildflower heritage is assured under the current Conservative government.

Meanwhile, back to the fire and flood. World wheat prices are continuing to feel the effects of the widespread Russian fires that led the country to ban grain exports.

Only last week US wheat futures rocketed reflecting fears that widespread flooding in Australia would compromise wheat transportation and export commitments.

Global shortfall

Australia is the world's fourth largest exporter of wheat after the US, Canada and Russia

The message for me is not that high prices mean we can ditch direct payments. Quite the reverse, it means that governments should manage domestic production in order to minimise the impact of fire, flood and other calamities that could devastate production in key areas and therefore world trade.

Back to the Grand Policy Ring, please welcome Irish agriculture minister, Brendan Smith. No siren voice of subsidy-slashing from Smith; he sings to a different, and to my ear, more positive tune.

Smith told the Oxford Farming Conference that direct payments were the most efficient way to encourage a thriving agri-food industry and the agriculture sector on which it depends.

We hear little from the Irish government about beautifying the Irish countryside and much more about the need to boost agricultural output and to develop the food industry it supplies. To me, that makes far more sense that the opportunistic slash and (temporarily) save policy set out by the UK government minister.

Yes, the CAP Reform Circus is a show that will run and run. But time is running out for Europe to finally get its act together on selecting policies that will secure supplies of safe, responsibly produced and reasonably priced food.

Mike Stones has written on food and farming topics for 20 years. He lives in southern France and co-owns a small family arable farm in northern England.

Subscribe to our FREE newsletter

Get FREE access to authoritative breaking news, videos, podcasts, webinars and white papers. SUBSCRIBE