Wednesday, 26 March 2008

EU TFEU: Common organisation of agricultural markets

The common agricultural policy of the European Community (European Union) progresses slowly towards an EU wide internal market in agricultural products instead of national markets, but it basically excludes the rest of the world from the benefits of free trade.

This post offers a look at the regulatory and budgetary ‘tools’ of the CAP in the light of the Lisbon Treaty, and it gives a few hints on further reading.

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In the Treaty of Lisbon (ToL) the intergovernmental conference (IGC 2007) does not specifically mention Article 34 of the Treaty establishing the European Community (TEC) among the amendments (see OJ 17.12.2007 C 306/53).

The Treaty is renamed the Treaty on the Functioning of the European Union (TFEU). We indicate the new framework, look out for horizontal amendments (replacing ‘Community’ by ‘Union’) and take the coming renumbering into account concerning the provision and its referrals (Tables of equivalences, OJ 17.12.2007 C 306/207). This is how the provision should look according to the Lisbon Treaty, based on the latest consolidated version of the TEC (OJ 29.12.2006 C 321 E/54-55):

Part Three Policies and internal actions of the Union

Title II (renumbered Title III) Agriculture and fisheries

Article 34 TFEU (ToL), renumbered Article 40 TFEU

1. In order to attain the objectives set out in Article 33 [ToL, renumbered Article 39 TFEU] a common organisation of agricultural markets shall be established.

This organisation shall take one of the following forms, depending on the product concerned:

(a) common rules on competition;

(b) compulsory coordination of the various national market organisations;

(c) a European market organisation.

2. The common organisation established in accordance with paragraph 1 may include all measures required to attain the objectives set out in Article 33 [ToL, renumbered Article 39 TFEU], in particular regulation of prices, aids for the production and marketing of the various products, storage and carryover arrangements and common machinery for stabilising imports or exports.

The common organisation shall be limited to pursuit of the objectives set out in Article 33 [ToL, renumbered Article 39 TFEU] and shall exclude any discrimination between producers or consumers within the Union.

Any common price policy shall be based on common criteria and uniform methods of calculation.

3. In order to enable the common organisation referred to in paragraph 1 to attain its objectives, one or more agricultural guidance and guarantee funds may be set up.

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The European Convention numbered the provision Article III-124 of the draft Treaty establishing a Constitution for Europe. The word ‘Union’ was introduced to take the place of ‘Community’ and the Article referred to was numbered differently, but otherwise not a word was changed (OJ 18.7.2003 C 169/51-52).

The IGC 2004 took over the provision as Article III-228 of the Treaty establishing a Constitution for Europe without changing the wording (OJ 16.12.2004 C 319/100-101).

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The ‘toolbox’ offered by the provision on common market organisations allows deep cuts in the normal principles of market economy. Here is the description given by the Europa Glossary:

“The common market organisations (CMOs) represent the first pillar of the common agricultural policy (CAP). They are the fundamental market regulation tool governing the production of and trade in agricultural products in all the Member States of the European Union by:
eliminating obstacles to intra-Community trade in agricultural products;
maintaining a common customs barrier with respect to third countries.
Since the reform of the CAP in 2003, most CMOs have been subject to the new system of a single farm payment and decoupling. The Member States which joined the Union on 1 May 2004 participate directly in the new system. Changes have also been made to crisis management arrangements and environmental classification of farms.” See:

http://europa.eu/scadplus/glossary/common_agricultural_markets_en.htm

The Commission’s Scadplus web pages with summaries of legislation offer the basics on ‘Common organisation of the agricultural markets: introduction’, although the page was last updated 27 September 2004. See:

http://europa.eu/scadplus/leg/en/lvb/l11047.htm

A starting point for more up to date information, including latest news, is found on the Commission’s web pages ‘Agriculture and Rural development’:

http://ec.europa.eu/agriculture/index_en.htm

Without outsiders’ views the common agricultural policy (CAP) would be left to government and farming interest insiders. First, a reminder of the sources mentioned in yesterday’s article:

Those who want to understand the present common agricultural policy and its future can turn to the UK House of Lords European Union Committee’s report ‘The Future of the Common Agricultural Policy’, with Volume I: Report (HL Paper 54-I) and Volume II: Evidence (HL Paper 54-II) (7th Report of Session 2007-08, published 6 March 2008):

http://www.publications.parliament.uk/pa/ld200708/ldselect/ldeucom/54/54.pdf

France is known for its addiction to the CAP. The French think tank Notre Europe runs projects which aim at budget reform and CAP reform post 2013. Among a plethora of policy papers there is a fresh one by Eulalia Rubio ‘EUBudget Review: Addressing the Thorny Issues’, published 7 March 2008. The CAP 2013 project is preparing proposals. A presentation including links to preparatory work is offered in English on the following web page (although the French page has been updated later):

http://www.notre-europe.eu/en/axes/competition-cooperation-solidarity/projects/projet/proposals-for-the-cap-post-2013/

Second, I would like to mention three high quality blogs shedding light on the CAP:

CAP Health Check, with Jack Thurston as coordinator and various contributors, describes itself as “Towards better European farming, food and rural policies”:

http://caphealthcheck.eu/

Wyn Grant comments on the Common Agricultural Policy blog:

http://commonagpolicy.blogspot.com/

Jack Thurston manages Farmsubsidy.org dedicated to transparency, with the motto ‘Who gets what from the Common Agricultural Policy’:

http://www.farmsubsidy.org/

Economics, weight in the EU budget, consumer interests, taxpayers, the (developing) world outside the European Union’s customs and quota borders – Clausewitz would have found the CAP too important to be left in the care of vested interests.


Ralf Grahn