Spain warns of more food supply problems
Paper says food prices are likely to fluctuate and supply crises become more frequent.
Food prices are likely to fluctuate and supply crises become more frequent, according to a paper prepared by Spain, which holds the presidency of the Council of Ministers, on the future of the Common Agricultural Policy (CAP).
Agriculture ministers will discuss the paper on Monday (22 February) as they continue their long-running debate on how to reform EU farm policy after 2013.
The debate is set to gather pace in 2010, as the European Commission is due to publish a paper later in the year to launch a formal debate on CAP budget and policy goals.
The rise and fall in food and commodity prices over the past few years provides the backdrop for CAP reform, but national governments are likely to draw different conclusions on what volatility means for the CAP. Food prices rose sharply between 2006-08 and then fell back in 2009 as the recession took hold, a downward turn that prompted calls from European farmers for protection against market volatility.
EU agriculture faces “a more uncertain backdrop” as a result of price volatility, the phasing out of export refunds and the new EU budget, the Spanish paper states.
“The EU must have an agricultural model with the tools necessary to stabilise markets and deal with volatility,” it continues.
Price slump
Ministers have been asked to consider whether current market-management tools provide a strong enough safety net and also whether the EU should create specific financial mechanisms to deal with crisis situations.
Click Here: cheap nrl jerseys
Last year’s slump in dairy prices gave a taste of how EU member states interpret price volatility. In early 2009 the Commission re-introduced measures to stockpile butter and skimmed-milk powder to help prop up prices. But in October, 16 member states, including France, Germany and Spain, called for more market-management to help dairy farmers hit by falling prices.
Other member states, including the UK and Sweden, said there had been enough market intervention. The Commission eventually rejected the Franco-German proposals.
Spain’s paper notes that market-management tools “have been effective in mitigating the negative effects of various sectoral crises”, citing measures to support pigmeat prices in 2007 and olive oil in 2009, as well as the 2009 dairy crisis.
On Monday, ministers will also get an update on the work of a high-level group looking at the future of the dairy industry. The group was set up last year to examine how to achieve stable and transparent prices once milk quotas have been phased out by 2015. This group of national government experts, chaired by the Commission, is due to report in June.