EU Dairy Not Convinced By CAP Reform
EU - The Commission recently published its latest legislative proposals for the reform of the Common Agricultural Policy (CAP). The EU dairy industry is not convinced that these latest proposals will help the dairy sector to maintain its competitive position, whilst addressing financial, management and environmental challenges.
The proposals from the Commission on the CAP represent a further revision of the policy after previous reforms
which took place during the last 20 years. The central focus in this latest reform round concerns revision of the
system of direct payments, strengthening rural development, and adaptation of the single CMO (Common
Market Organisation) regulation.
Responding to the publication of the proposals, Secretary General of EDA (European Dairy Association),
Joop Kleibeuker said: “The CAP has been moving towards greater market orientation over the past 15 years."
"The dairy sector is now operating in an increasingly globalised market place. Our primary concern is to ensure
that the dairy sector maintains its competitiveness, on the EU and world market, whilst addressing growing
environmental and other challenges”.
“We are not convinced that the Commission has got the balance right. There is too much in the package that
could create competitive distortions in the European single market and reduce competitiveness in the world
market. Impeding productive efficiency, whilst not doing enough to address competitiveness, could endanger
the economic sustainability of European dairy farming,” Mr Kleibeuker continues.
EDA sees the introduction of a national flat rate in each member state, leading to a national redistribution of the
single farm payment between the different farm sectors, as a concrete example of this lack of balance.
According to analysis from the Commission, this new regulation will decrease dairy farmers’ income significantly
across the EU. It should be noted that a sustainability-linked direct payment should not only take into account
environmental aspects, but also the contribution to social cohesion in rural areas that a sector such as dairy
provides.
EDA believes moreover that proposals for coupled support could lead to a situation in which some
member states subsidize milk production. The provision of insurance against the loss of income could reduce
the incentives in certain states to adapt production to market developments.
Furthermore, the measures
foreseen in the current proposals to support research and innovation are insufficient.
“It is obvious that there is still a lot of work to do, but the EU dairy industry remains committed to cooperate with
the Commission, the Parliament, the Council and the various member states to improve this package and
achieve the best outcome for the EU dairy industry," Mr Kleibeuker concludes.
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