10th May 2021

CAP 'health check' not open for debate

  • The economic crisis has lead to falling demand for EU dairy exports. (Photo: European Commission)

European commissioner for agriculture Mariann Fischer Boel has issued a robust defence of reforms to the Common Agricultural Policy (CAP) agreed last year - a series of changes Brussels calls the CAP 'health-check', saying the current crisis in the dairy sector was no excuse for a return to a more interventionist policy.

"I am not going to re-open the agreement that we made in the health-checK. I hope this is clear enough so we can stop this blurred discussion that is sending totally the wrong signal to the farmers," she said on Monday (23 March) after agriculture ministers met in Brussels to discuss falling milk prices.

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"Farmers believe sometimes that one minister or another will be able to put pressure on the commission to re-open the whole discussion. This is not going to happen. It is actually dead, this idea."

Earlier in the day, a note circulated around the commission and other national delegations in Brussels in which Austria, Germany, Hungary, Slovakia and Slovenia argued that "unconventional approaches" were now needed to deal with the dire situation.

However, Ms Fischer Boel said the commission had already acted, pointing to the temporary re-activation of export refunds for all dairy commodities as of the 23 January of this year.

She also argued that the drop in dairy prices was due to the fall in global demand and not commission increases in milk production quotas agreed last year in an attempt to make the CAP more market-oriented.

"I hope ministers are brave enough [to explain this] when they go back into their countries and meet the farmers' organisations," Ms Fishel Boel said.

"So let's stop this purely political discussion and instead concentrate our efforts on what we can do to facilitate [a resolution of] the real economic problems."

Czech agriculture minister Petr Gandalovic, who also attended the press conference, said the Czech presidency intended to step up the debate in the coming months on the future of the CAP post-2013, when the current spending period comes to an end.

Fall in exports

New figures released by Eurostat, the EU's statistics office, on Monday confirmed that falling exports are not just confined to the agricultural sector.

Seasonally adjusted exports for the euro area fell in January by 10.7 per cent year on year, while imports for December dropped by a smaller 7.3 per cent, leading to a widening of the euro area's trade deficit.

The sharp drop in January's exports was larger than many analysts had predicted, sparking fears that first quarter growth for 2009 is headed for a substantial contraction.

"The 10.7 percent fall in month-on-month exports is pretty dire. We knew it was going to be weak, but that really is scary," said Capital Economics analyst Ben May, according to Reuters.

The reaction to Eurostat's weak data is in stark contrast to upbeat expectations for a conclusion to an EU-Korea free-trade deal on Monday evening.

Recent hold-ups to securing the agreement, under negotiation since May 2007, have centred on the reluctance by the EU's automobile sector to lift import barriers on cars produced in South Korea.

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