ECONOMY

Changes to CAP likely in 2008-9

LONDON (Reuters) – The European Commission will consider more changes to EU farm policy in 2008 or 2009, maybe with further dismantling of the historic subsidy-production link if necessary, Europe’s agriculture chief said yesterday. Ten of the 15 EU governments that negotiated a mammoth farm reform in 2003 have already introduced the main changes, to varying degrees, into their agriculture subsidy sectors and the remainder are scheduled to do so from January 1, 2006. The Commission, the EU’s executive arm, will assess how those changes have been carried out and their effect on European agriculture as a whole in 2008 or 2009, EU Agriculture Commissioner Mariann Fischer Boel told reporters after a meeting of EU agriculture and environment ministers. The 2003 reform’s chief concept is cutting the link between output and subsidy, a break known as decoupling that aims to end the EU’s butter mountains and wine lakes of previous years by removing the incentive to overproduce just for more cash. «It is obvious there is a revision possibility two years after the last countries have implemented, and that might be in 2008 or 2009,» Fischer Boel said. «And then we will have the possibility to see how it worked, if it will be appropriate to decouple further,» she said. «We will be back to look at the figures and there might be some ideas for changes – but it’s not a new reform.» The reform, a sweeping overhaul of the EU’s lavish Common Agricultural Policy (CAP), took nearly a year to agree to after a bitter battle between the Commission and France, by far the largest beneficiary of EU farm subsidies. Even though a bewildering array of systems has been chosen across the EU-25 for paying out subsidies, the average level of decoupling has been fairly high. The reform has several options for countries to apply the new system to their farm sectors. Fischer Boel said the average decoupling rate in countries that had already implemented the reform was higher than expected, since some had chosen 100 percent decoupling. And the rates likely to be applied in the final five countries next year would probably bring the EU’s overall average to 90 percent. «I’m quite happy to say that as far as I can see from the implementation rules in the member states – those that will implement in January next year – that we will reach 90 percent decoupling,» she said. Fischer Boel also touched upon the need for the EU to increase the amount of biomass, a green fuel, in its energy mix as concerns about high oil prices and climate change mount. She said the Commission would develop a «biomass action plan» by the end of 2005, which would propose ways to increase the use of biofuel. New «ambitious» biofuel policy proposals could follow next year. «We can reduce our dependency on energy imports and contribute to the Kyoto objectives while offering farmers new market opportunities,» Fischer Boel said, adding that farming contributes 10 percent of the EU’s greenhouse gas emissions.