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The EU’s food security policy and its impact on the Reform of the Common Agricultural Policy (CAP)

Speakers
Dr Franz Fischler Former European Commissioner for Agriculture and Rural Development and Executive Director of Franz Fischler Consult GmbH

 Date
12 Aug 2011

 Venue
Galleria Room II, Level 3, Grand Copthorne Waterfront Hotel Singapore, 392 Havelock Road, Singapore 169663

 Time
2.15pm – 4.30pm

 Downloads





The EU Centre invited Dr Franz Fischler, the former European Commissioner for Agriculture, Rural Development and Fisheries (1995-2004), to Singapore to speak at the International Conference on Asian Food Security (ICAFS) 2011 from 10-12 August. Aside from speaking at the high level forum attended by all delegates of the conference, he also led a satellite workshop where he delved deeper into EU policies on food security.

 

The conference was organised in the light of the recent food crisis which saw food prices skyrocket and some food stockpiles fall. In Singapore, the concern is over the availability and affordability of food whereas in the larger Asian region, food accessibility is one of the most pressing problems together with poverty and the urban-rural divide. Additionally food safety and broader debates on safety of genetically-modified (GM) food have become issues in Europe as well as in the developing world. The conference convenors spoke of holistic solutions in tackling food security, an issue that has even sparked off social unrest as in Tunisia. The problems relating to food scarcity in certain parts of Asia cannot merely be answered by increasing agricultural production without heeding the economics of it all, scientific research and development, or understanding the functioning of food supply chains. In short, the solutions to food security require partnerships between different sectors of society.

 

In his presentations, Dr Fischler emphasised the tripartite nature of the current ‘European agricultural model’ – in which food security is not being singled out for special action, but is balanced with concerns over environmental and social security.  This was in contrast to the old Common Agricultural Policy (CAP) which had been the target of much criticism – over wastage, inefficiency and protectionism in the 1970s and 1980s. 

 

Dr Fischler sought to explain the rationale for the CAP by citing the aftermath of World War II during which the European debate on food security hinged on a concept of self-sufficiency. This led to the genesis of the CAP in the 1962, after the European Community (the precursor of the EU) was formed, which was meant to guarantee a fixed price for European farmers to produce. But as the last vestiges of the post-war food shortage challenge had faded, the problem had become one of overproduction, resulting in the creation of ‘grain and butter mountains and wine lakes’. The unpopular CAP was accused of distorting world trade, and Europe had garnered the unenviable reputation of being an economic fortress.

 

Since then, the CAP has undergone some reforms, with proposals for a ‘CAP towards 2020’ under discussion at this time of writing. Most notably thus far, export subsidies have largely been phased out; direct payments for some crops have been decoupled, conditional on the adherence to environmental rules. On the whole the European Commission’s intervention in the agricultural market has been reduced to safety-net levels. In particular, the sugar regime has been drastically reformed to create fairer market access for emerging economies.

In reforming the CAP, the agricultural sector has to be made more competitive, which would always be a challenge given the European structure of small farmers.  Incomes have also remained low for farmers in the new member states of the EU in Central and Eastern Europe, for which direct payments per area and per beneficiary are mostly below the EU average. Here the EU’s rural development policy plays an important role in promoting the economic diversification of rural communities while preserving and caring for the rural environment. 

 

In a world where at least 1 billion people are starving and where 500 million subsistence farmers are in a vulnerable position, the EU is also playing a part as an international actor. The EU promotes broad-based rural economic growth by boosting primary production, such as through the strengthening of veterinary and plant health services and through the support of agricultural research. In terms of international trade, the EU has sought to improve market access for developing countries. Besides the reforms to the CAP above, it follows an ‘everything but arms‘ principle, whereby all imports to the EU – the world’s largest importer – from the Least Developed Countries, with the exception of armaments are duty free and quota free.

 

At the satellite workshop, delegates and participants had the opportunity to participate in a frank exchange and deeper discussion with Dr Fischler on food security and a variety of other topics linked to it.   

 

On the ongoing reforms of the CAP, he thought it to be politically difficult to implement the capping of direct payments. During his tenure in 2003, he encountered challenges to similar initiatives not from centre-right governments as was expected, but from the centre-left governments of the UK and Germany due to their domestic political dynamics.

 

On GM foods, he noted the general aversion of European consumers towards them, but cautioned a need for differentiation of various GM products. For instance, the EU has to accept the need for GM soya products in pork production, because the EU by cannot produce sufficient stocks of non-GM soya.

 

When asked for his opinion on the reason behind the price volatility of food that was the cause of the recent food crises, he thought it ‘nonsense’ to speak about price speculation (of food as a commodity) as the cause, since food commodity markets are hundreds of years old. Rather the problem is in the derivative markets, a more recent financial innovation that has also been the cause of other economic crises.