October 14, 2011

Meat traders rally for more flexibility in EU commodity crisis management

The International Meat Trade Association (IMTA) has rallied for greater flexibility over EU commodity crisis management to enable the European Commission to mediate price fluctuations.

Its comments came as Brussels released its anticipated proposed reforms to the Common Agricultural Policy (CAP), which include a new 'safeguard' power enabling the Commission to "take emergency measures to respond to general market disturbances." This, said the Commission, would cover situations such as the recent e-coli crisis, with money being taken from a general EU fund called the Crisis Reserve.

However, IMTA director Liz Murphy called for EU politicians to think out of the box when debating these proposals in the European Parliament and the EU Council of Ministers. "The Crisis Reserve should cover when prices are rising as well as falling. It's not a one way street," she told the Meat Trades Journal. She noted that UK domestic demand for lamb and beef had been falling as prices rise, and there was a risk that this demand might not return. Lamb, especially, could become a niche product, she warned. "If our export markets go pear shaped, you can't expect the domestic consumer will be back again."

There is also concern that the Commission had been too weak when insisting that farmers maintain permanent grassland, because there is no requirement that this land is brought into meat (or dairy) production. The same applies for an optional subsidy to help farmers care for environmentally "fragile" areas. "Maintaining permanent pasture doesn't mean there's going to be livestock on it," said Murphy.

The environmental provisions have been further criticised by the European farmers organisation COPA-COGECA, which said:  "It does not make sense to require every single farm to stop producing on a certain percentage of their land (ecological set-aside) when world food demand is set to rise by 70% by 2050 and production is threatened by more extremes of drought, flooding and storms."

The National Farmers Union (NFU) has also been unimpressed by the proposals. In particular, the union is unhappy with the proposed definition of an "active farmer", aimed at preventing subsidies being paid to landowners who produce little or no food. The NFU said this "would be a nightmare to enforce", adding: "The restrictive definition of an active farmer, and the proposed payment reduction and capping, are highly discriminatory - hitting farms of equal size and payment to a sharply different extent."