The outcome of the vote on March 13 surprised many, as the expected greening of the Common Agricultural Policy was turned down.
By Isabelle Gheldolf and Mette-Sofie Holst Sommer
Wednesday 13 March the European Parliament voted on the reform of the Common Agricultural Policy (CAP).
Back in October 2011 the Commission unveiled the plans for a greener CAP, which amongst other things called for improving biodiversity, reducing greenhouse gasses and using direct payments to encourage farmers to reduce the use of fertiliser and pesticides.
But the outcome of the vote last month surprised many, as Members of Parliament (MEPs) voted to keep basic greening measures, but did not take initiative to take a step further in greening the CAP.
“We would have liked to see more direct funding towards green and organic farming in the reform,” says Morten Bonde, spokesperson for the Danish Ministry for Foods and Agriculture.
Christel Schaldemose, Danish MEP and member of the Social Democrats thinks the greening is a lost cause.
“Many member states are having financial trouble and this goes at the cost of the greening of the agricultural policy,” she says.
Sofa farmers excluded from beneficiaries
Another important decision concerning the direct payments was made at the sitting. MEPs agreed that they should be granted directly to active farmers.
So far institutions like golf clubs, scouts clubs and kindergartens in the member states can receive farming subsidies, although they have never milked a single cow or driven a tractor.
But at the vote the European Parliament agreed that the “sofa farmers” should immediately be excluded from the list of beneficiaries unless they can prove that farming contributes a substantial part of their income.
A new type of reform
When the CAP was developed in the 1950’s it was based upon the idea of providing agricultural subsidies through intervention in the market. After two world wars politicians wanted to ensure that food shortages and famine would be a remnant of the past, which is why the EU has intervened and supported the market ever since.
Since its creation, the CAP has been subjected to several reforms. The current reform is the first agricultural policy that will be made under the co-decision procedure, which means that this time the Parliament will be able to adjust the amendments of the Commission and propose their own changes.
The reform of the CAP is expected to enter into force in 2014.
For years, airports and sport clubs have been on the beneficiary list of the EU’s agricultural budget. With the Common Agricultural Policy undergoing a new reform, ‘sofa farmers’ will immediately be excluded from the subsidies.
By Isabelle Gheldolf and Mette-Sofie Sommer
“Please take your boots off before entering,” says a note on the door to farmer Carl Jørgen Haugård’s office. He is sitting inside, patiently waiting for the cowshed outside to fill up with the next load of motley colored cows, whose bursting udders are ready to be milked.
Haugård receives a grant of €218.669 from the EU once every year. He needs the money to run and maintain the farm, that holds over 700 milking cows.
Not far from the farm is Randers Fjord Golf Club. According to the website of the Danish Ministry of Foods, Agriculture and Fishery, the golf club received a grant of €22.892 in 2011 from the EU. The spokesperson from the club was not interested in explaining what the money was spent on.
These grants are part of the direct funding of the Europe’s Common Agricultural Policy (CAP). At the moment the CAP is undergoing a reform in the European Parliament and on March 13, 7000 amendments were voted on in the sitting in Strasbourg. The Parliament were especially concerned with improving the targeting and distribution of the direct payments.
The spirit of the law
The grant Randers Fjord golf club received is just a little over 10 per cent of what Haugård receives, but looking down the Ministry’s list you find hundreds of other examples of “sofa farmers”; schools, kindergartens and pony
clubs, who also receive farming subsidies. They gain the right to payment by owning land, that is not used for production.
”To me it seems very strange that those who do not produce foods or crops receive subsidies too,” says farmer Haugård.
In Belgium, the vast amount of €600.000 was granted to the Dutch airline company KLM for ‘export of agricultural products’ subsidies, because they transport food during flights.
“From a technical point of view this is food exporting, but this is not the spirit of the law,” says Bart Staes, Belgian MEP and member of The Greens, who have been pleading for a reform for years.
Christel Schaldemose, Danish MEP from the Social Democrats, agrees.
“In the treaty of the CAP, it is defined as an income support for farmers. But now it has developed into support for big companies,” she says.
Struggle to define active farmers
This grey zone of receivers is a consequence of the 2003 reform of the Common Agricultural Policy (CAP). The EU farm ministers introduced the decoupling of the direct payments; a scheme that allowed for a much wider use of non-production land.
“The golf courses, for instance, receive funding because they are giving rural areas some kind of activity. But they do not fulfill the typical definition of farmers. This is a grey zone we should not have,” says Henning Otto Hansen, Senior Advisor from the institution of Food and Resources Economics at the University of Copenhagen.
But Ministers of Agriculture struggle to agree on a definition of an active farmer, that will cover all EU’s farmers, which is why golf clubs and schools have benefited from the CAP’s 40 billion budget for years.
“The funding should reach the farmers, not just the big landowners,” Bart Staes says.
Easier to define sofa farmers
The inability to agree on a definition has led to the second-best option; instead of defining who should receive aid, the EU determined who should not be subsidised and drew up a list of landowners, like airports and sports clubs, that should automatically be excluded as beneficiaries.
“Making this list with organizations that should be excluded from funding is better than nothing, but I was in favor of making a clear definition of an active farmer,” says Christel Schaldemose, Social Democrat and Danish MEP.
According to Schaldemose, this list is a step back in reaching the goal of a common agricultural policy.
“The EU will get into a situation where in some member states it will be possible for a transport company or an airport to receive money from the CAP and in others not. This is not the way to go,” she says.
To improve the honesty of the funding, the Parliament also agreed that the beneficiaries and the amounts they receive must be published.
Butter mountains and milk lakes
This reform is just one of many the CAP has been subject to.
Before the reform in 2003, farm payments were coupled to production. This meant that the more farmers produced, the more they received in subsidies.
“This laid at the root of the surpluses of agricultural products, also known as the European Union’s notorious butter mountains and milk lakes. The farmers were not making production decisions based on market prices and conditions, but on the program, ” says Kim Martin Lind, Senior Research Fellow from the institution of Food and Resources Economics at the University of Copenhagen.
The decoupling of the direct payments caused new issues for the European Union. Beneficiaries whose main businesses had nothing to do with farming became entitled to farming subsidies too, which is what the Parliament had to deal with in the new reform.
Still a long way to go
Mairead McGuinness, the European People’s Party Group Rapporteur and MEP, who leads the negotiations in the Parliament, has warned that a long road lies ahead in terms of achieving a final CAP agreement.
“In all Member States, we need to openly debate how best to use the direct support payments, how to target them, including the possibility of coupled payments for sensitive sectors, especially livestock production,” McGuiness said in a press release on March 13.
In late March and early April the trilogue negotiations between the EU Parliament, EU farm ministers and the Commission will start and the final shape of the CAP 2014-2020 will be decided. They will try to get a final deal on June 24 and 25.
The CAP is expected to enter into force in January 1ste 2014.
[box] What is the CAP
The Common Agricultural Policy is one of the European Union’s oldest policy. The CAP is a collection of rules and mechanisms which regulated the agricultural production.
Why was the CAP made?
After the second world war people were suffering and starving. Europe had to create their own food supply system.The policy was first defined in the Treaty of Rome in 1957 and launched in 1962.
Why do we need a CAP?
The overall goals of the CAP are:
To enhance competitiveness by improving the position of farmers in the food supply chain.
To ensure that food reaches consumers at reasonable prices.
To assure the availability of supplies.
To increase agricultural productivity.
Budget of the CAP
Total Budget: 122.230 million euros (2010).
56.776 million euros goes to expenditure which consists of direct payments and rural development support. [/box]
Farminsubsidy.org is a database with information about who receives EU’s farming subsidies. Founder of the website, Nils Mulvad, explains the importance of transparancy and how hard it has been to get the data.
The European Union will take over the regulation of women’s accession to company boards by the end of 2013, unless disagreements over how to increase women representation fail the new legislation. While France is complying with the proposal, the United Kingdom refuses EU regulation on the matter.
The conference room inside the European Parliament is witnessing engagement from Members of European Parliament (MEPs) and journalists fighting for women’s rights during the “Women’s response to the crisis” conference held on March 6. Women’s representation on boards comes up: the future is uncertain. While the member states agree in principle over gender equality, they dispute on whether each member state should apply it independent from EU regulation and how, with France and the UK on both ends.
Viviane Reding, EU Commissioner for Justice, Fundamental Rights and Citizenship proposed a legislation (directive) in November 2012 that sets a 40% minimum of women on non-executive boards of EU-listed stock exchange companies to be achieved in 2020. The proposal had stirred controversy even before being completely drafted, as objections from 10 member states where sent to Reding.
Dispute over EU intervention
Whether the EU or the member states should implement measures for increasing women on boards is perceived differently by France that is complying with the Union, and the United Kingdom that refuses any EU regulation on the matter.
The directive is open for equally effective action on the member state level. “If they manage to get there, they are fine, they do not need to apply the directive,” says Mina Andreeva, spokesperson of Viviane Reding.
“There was only a 0.6% improvement in the number of women on boards last year,” according to the European Economic and Social Committee (EESC) Opinion on the proposed legislation, in reference to the effect of the voluntary measures by member states for increasing women on boards.
As stated in the Opinion, France is the only country that is on track for achieving the 40% objective in due time. According to Andreeva, this is due to a well-developed childcare system, which helps with balancing work and private life.
France is one of only four member states who have imposed legislation for gender diversity on boards with sanctions for non-compliance. According to French Henri Malosse, President of the Employers at the EESC, a law was voted by Former President Nicolas Sarcozy two years ago and by 2017, non-complying companies will have penalties.
While France is already following the proposed directive, the United Kingdom wants self-regulation. In 2010, the percentage of women on boards on FTSE 100 (index of blue-chip stocks on the London Stock Exchange) companies in Britain was only 12.6%, as announced by Mathhew Hancock, Business, Innovation and Skills Minister at the House of Commons on January 7.
“The government is committed to increasing the number of women on boards,” said Hancock, but he refused EU regulation, as he claimed it did not respect the subsidiarity principle, which is the principle that the EU should intervene when action is not effective on the member state level. “Why should this be dealt with by the European Union? ” said Conservative Member of Parliament (MP) Jonathan Djanogly at the House of Commons of the British parliament whose MPs agreed on the motion.
Dispute over the concept of a “quota”
While the quota – the minimum percentage of representation for women – in the directive proposal is seen by some as undermining women’s competence and as interference with business, others believe it is necessary.
Madi Sharma, who drafted the EESC Opinion supporting the proposal, was herself against the quota, as she did not want to be on a board just to fulfill a quota; but she realized it was essential.
“There is no existing historical example of a company that has reached 40% without quotas,” said Sylvia Walby, Distinguished Professor of Sociology at Lancaster University and UNESCO Chair in Gender Research.
If by 2020, companies do not fulfill the quota, they will not be immediately sanctioned. They will have to publish information about the transparency of the selection procedure and how they tried to recruit women. The sanctions will apply if the company fails to provide such explanation.
While quotas are complied with in France, the British system is skeptical about it. David Cameron stated in January 2013 that he does not prefer quotas but that they remain an option if voluntary measures turn out to be ineffective, according to The Telegraph. Last year (2012), the Government canceled plans to set quotas for women representation on British company boards.
The Lord Davis report, a UK report about women representation on boards, issued in 2011, had defined a quota between 30% and 35%, which stirred debate in the country. Yet, the member state refuses the EU directive.
“It’s not a fixed quota, it’s a procedural quota. It takes account of talents, places focus on the transparent selection procedure and it has even [a] clause which leaves [for] member states room to demonstrate they can arrive there with their own system,” says Andreeva, adding, “Which EU legislation do they support recently? [..] This is a very ideological issue for them,” in reaction to the British stance.
According to The Telegraph, the British Cooperative Group announced in March that it commits to achieving a representation of women on boards of 40% by 2018.
The need for quick measures – be it on European or member states’ level
According to the Annual Growth Survey, the presence of women on company boards improves the economy and boosts the GDP of member states, as shown in Figure 2.
“Had we had women on boards of banks, we had to question if we had had the same economic crisis,” says EESC member Madi Sharma, adding that having balanced boards increases share prices, transparency and decision-making processes.
Women still face discrimination in the selection procedure. According to the European Parliament Eurobarometer Flash Survey issued on 26 February 2013, the 1st criterion for the woman is the fact that she has children while the professional experience comes in the 7th place. For men, the 1st criterion is the professional experience and the criterion about children comes in the 10th place.
86.3% of board members are men, which hinders the possibility of recruiting women, as the networks of men enable recruiting more men on boards rather than women. Some companies argue that not enough women apply for jobs on boards. However, Viviane Reding prepared the “Global board ready women” database that lists 8,000 women qualified to work on boards.
The proposal faces rejection, but the EU is progressing
The directive proposal is awaiting the 1st reading where the Women’s Rights and Gender Equality Committee at the European Parliament will vote. In June 2013, the proposal will be discussed by the Employment and Social Affairs Council in the Council of Ministers. It will be applied only if both the parliament and the council adopt it.
“Now the Proposal is on the table. First, we expect everyone to read the proposal in order to be able to have a factual discussion, not an ideological discussion,” said Mina Andreeva.
The UK, Germany, France and Italy each have a number of 29 votes in the Council of Ministers, constituting the largest votes. While the first two are against the directive, the latter are for it.
“It is too early for governments to decide their position,” said Evelyn Regner, commenting on the recent announcement by Germany on March 6 (2013) that it is against the directive proposal.
[box type=”info”] Facts about GMO –GMO (Genetically modified food) Researchers still don’t agree on the safety of GMO. — The first GMO products were sold on the market 1996.– The EU has a strict evaluating process before GMO’s are approved in the EU. — In EU GMO is mainly used for animal feed. — Food products in the EU containing GMO must say so on the packaging[/box]
The different views on genetically modified food in the US and the EU can prevent a free trade agreement that would result in a much needed GDP increase.
The EU and the US are trying to settle a free trade agreement within two years. The main challenge is to agree on creating similar standards, so that a product accepted in the US is also accepted in the EU and the other way around.
Reaching a common understanding on the regulation of genetically modified organisms, GMO’s, is going to be a big challenge. The EU has some of the strictest GMO policies in the world, compared with the United States, which leads the world in the use of GMO.
“In order to complete this pact, both sides have to devote significant political focus and make choices in sensitive areas such as agriculture. Without addressing these vital issues, a deal will never happen” writes Senator Max Baucus, chairman of the Senate Finance Committee.
In the US, 86% of corn, 93% of soybeans and 87% of canola is genetically modified. The US wants to export more of its GMO products to the EU but has not been able to do this because of strict regulation and a cultural backlash against GMO products.
These differences have not intimidated EU commissioner of trade, Karel De Gucht.
“This is the cheapest stimulus package you can imagine!,” said Karel De Gucht in a speech on the topic given at Harvard university.
Not all EU farmers are skeptic towards GMO. Aspiring farmer Ulrik Aaskov would rather start his farming carrier in the USA where the rules are more liberal. See Video –V-
GMO is a cornerstone in the trade war
A free trade agreement between the world’s two biggest economic powers has been discussed before, but the GMO question has been one of the reasons why discussions haven’t ended successfully.
“Since the 90’s there has been a GMO trade war between the two actors and there have been cases in the World Trade Organisation where the EU lost,” says Jens Ladefoged Mortensen, who is a professor at Copenhagen University and author on several publications concerning the matter.
The U.S President’s 2013 Trade Policy Agenda states that the United States Trade Representative “is working to expand markets for the U.S agricultural producers by encouraging EU regulators to ensure that their decisions are science based.”
By science based, the US means that there should be scientific evidence proving that a product is harmful and should not be on the market. Without this proof, the banning of a product is seen as preventing free trade. The EU prefers a precautionary approach.
Six EU Member States have used a provisional safety law to temporarily ban the use of GMO: Austria, France, Greece, Hungary, Germany and Luxembourg.
A sensitive subject is a serious matter
With the economic situation and positive gestures from both Obama and EU president Manuel Barroso, it would seem like the negotiations would go quickly and easily, but this isn’t the case.
“Food is an immensely sensitive subject in the EU, it’s hard to explain how big a role this subject plays. And the Americans don’t understand this reality. It has stopped an agreement before and might do it again, ” says Jens Ladefoged Mortensen
This is reflected in the opinion of the European citizens. In a EU report from 2010 only 23 percent stated that they supported GMO.
In the European Parliament the GMO skeptics are already getting ready to fight any changes to the European GMO policies. French member of the european parliament Jose Bové from the Greens (EFA) is waiting for the commission’s proposal for a negotiation mandate. This is scheduled to be agreed before the political summer break and will define how far the EU will go to strike a deal.
“We need to see what’s on the table and for the moment this is totally hidden,” says Jose Bové, who isn’t optimistic, when it comes to the effects an agreement could have.
“The US is going to expect changes to the EU GMO policies. We would have to lower our standards. They will try to prevent European autonomy on food safety,” says Jose Bové
No changes to legislation
The European commissioner of trade, Karel De Gucht, has made it clear that the EU is not looking to change legislation concerning GMO.
“It’s not possible to settle an agreement if the americans actually think that legislation changes would happen,” says Jens Ladefoged Mortensen who sees other possibilities in reaching a compromise.
“In order to settle an agreement, EU could make a credible statement saying that they will look at speeding up the approval of GMO products.The compromise should be that the EU keeps their legislation and procedure, but administratively speed up the process of accepting more GM products.”
The slow process of approving GMO products in the EU has been the main issues upsetting the US concerning the EU GMO policies. The US has criticised the EU for deliberately delaying the process, turning the scientific analysis into an ideological subject and not a scientific one.
The World Trade Organisation has also ruled on this, criticising the EU for not having an efficient system and therefore creating a trade barrier.
Out of need, not love
The free trade agreement could act as a long term investment for both parties, but compromises in regards to GMO will have to be made.
An EU report predicts that the relative size of the EU in the world economy will be halved in 2050 (15% against the current 29%).
The free trade agreement has the possibility of creating hundreds of thousands of jobs, increasing GDP in the EU with 0,5-1%, and increasing global competitiveness for both parties. Both the US and EU are facing high unemployment, with the US averaging at 7.9% unemployment and the EU with 10.8%.
“The initiative doesn’t come from love but out of need” says Jens Ladefoged Mortensen. “The EU and the US have to look at creating a free trade agreement now because their prospects of growth are bad. With China and the BRIC countries storming forward, it’s a new era and a new reality”.
– By Niels Anton Heilskov & Christopher Underwood.
The different views on genetically modified food in the US and EU could spoil trade agreements between the two economic superpowers.
The EU and US are the two biggest economic powers in the world controlling more than half the wealth in world. This will soon change as a result of the economic crisis and overall slow growth. By 2050 both the EU and US could expect to be overtaken by China.
This has made the two players set a goal for establishing a free trade agreement within the next two years. This would result in an increase in GDP of 0.5-1%, but differences in the view on GMO in the two countries can prove too great to reach an agreement.
The challenge of creating a free trade agreement is not tariffs. The main challenge lies in making a system were all products accepted in one country is also automatically accepted in the other.
“ It’s a subject where we don’t have a similar understanding at all, and it is going to be the main challenge when it comes to accepting shared standards. It’s going to be a huge conflict, and it could very well end up putting this initiative on ice, as it has done before,” says professor and author of the publication “The GMO War, Jens Ladefoged Mortensen.
Even before the agreement talks have officially started, the GMO skeptics in EU are opposing changes to GMO standards. “The US want’s to prevent EU autonomy when it comes to GMO standards. They want us to change something that we have been defending for years!” says GMO skeptic, MEP, Jose Bové.
EU companies risk to face sanctions without a minimum number of women on company boards – a closer look at France and the UK.
Despite the fact that the new EU legislation proposal regarding women on boards is open
to effective national legislation, the UK refuses any EU intervention and thus refuses the
proposal. In contrast, France is on its way to achieving the 40% objective for women on
non-executive boards by 2020.
France and the UK agree that gender balance on company boards is necessary for gender
equality and for better economic performance purposes. The problem is with how to
achieve the balance.