‘CAP lacks effective tools to address growing market volatility’

The current Common Agricultural Policy (CAP) lacks effective tools to address growing market volatility and to help farmers cope with price changes, MEPs said in a non-legislative resolution this week.

Existing risk management tools, such as mutual funds, income stabilisation and insurance are implemented slowly, unevenly and are poorly funded, they said.

The EU must therefore develop new climate, health and economic risk management tools, as well using existing ones to the full, to safeguard the EU’s food autonomy, ensure competitive and sustainable farming on the continent and encourage new entrants, according to the resolution.

MEPs proposed that these new tools should be fairer, more efficient and responsive, but also affordable for farmers and properly funded.

Rapporteur Angélique Delahaye (EPP, FR) said that due to the extent of the [farming] crisis and the lack of hope in the agricultural sector it is very important that we address the matter of [price] volatility.

“The idea is very simple: get the Commission to make proposals to do something about it.

“We must make sure that the CAP has proper risk management tools and uses them, set up price observatories and enhance ones that we already have to ensure markets are transparent and finally improve crisis management tools so that we can respond more quickly and more effectively to emergency situations,” she said.

Delahaye’s resolution was adopted by 445 votes in favour to 148 against, with 89 abstentions.

Tackling Crises

Furthermore, the resolution said that the EU Commission should develop complementary public and private sector tools for crisis prevention and management, along with tailored and binding early-warning systems, and study ways to prevent and combat price volatility crises through countercyclical aids.

MEPs also insisted that the so-called ‘crisis reserve’ should be kept outside the EU budget, to make it more flexible.

Farmers must be better informed about ways to make their holdings more competitive and on options available to them when it comes to risk management, market data and volatility, MEPs said.

They called on the Commission and member states to organise awareness-raising campaigns and adapt their training programmes to this end.

Boosting farmers’ bargaining power

Meanwhile, the resolution also called on the Commission to align EU competition policy with the specific needs of the agricultural sector and boost farmers’ negotiating power in the food supply chain.

This would be in the form of introducing standard, transparent, balanced and collectively negotiated contracts laying down inter alia prices for products and payment periods.

The size of a producer organisation representing farmers in collective negotiations should ideally correspond to that of its negotiating partner, MEPs said.