Memorandum by Mrs Sonia Kurta
In order to ensure food security the CAP was
devised to enable farmers to plan ahead knowing that they could
expect a reasonable return for their produce, so that agriculture
would not become as run down as it had been prior to 1939.
Within 10 years a state of surplus had been
reached. Unlike the UK system of deficiency payments (which were
given up as being too costly to administer when the UK joined
the Common Market) which enabled consumers to benefit from cheaper
imports, the method of ensuring farm gate prices high enough to
give reasonable farm incomes led to ever growing European surpluses.
In order to balance supply with demand to get the required farm
gate prices these surpluses were removed by using complicated
intervention schemes, export subsidies, set aside and quotas.
Unpopular with consumers, importers and countries which were having
their production undercut, these schemes were largely unsuccessful.
Concluding that food security was no longer
important, the Single Farm Payment, de-coupled from food production,
was introduced.
However, it is beginning to be recognised that
world food supplies may not be so plentiful in the not too distant
future. Therefore the long term aim of the CAP should be to ensure
food security whilst enabling food to be sourced from where the
consumer will get the greatest benefit.
De-coupling and the Single Farm Payment is not
what is needed. Due to low and/or fluctuating prices this payment
is being used to bolster food production, which is not what it
was intended for. Logically farmers would be expected to do the
minimum required to get this payment and cease food production
until they knew they would get a fair return and could therefore
plan ahead.
Due to enlargement the EU now has countries
with very diverse agriculture. It may well be that it would be
more satisfactory if each country was allocated a share of the
CAP payments to use as deemed fit, but not to be diverted from
farming.
A simple deficiency payment system could be
implemented for the UK, if not thought suitable for the whole
EU. This would be based on average yields and prices, no individual
records to be kept. Farmers registering would simply have to guarantee
to, say, grow a given minimum acreage of wheat (or any other crop
or type of livestock required). They would sell this on the open
market, plus as much more as they cared to grow, only the agreed
minimum amount being covered by the scheme. This scheme would
give farmers a stable price for sufficient produce to give food
security, whilst being flexible to enable them to take advantage
of higher market prices when these occurred. Each individual would
be encouraged to produce for the market by getting the best price
he could. World prices would not be affected. The scheme would
be easy to administer as each person registered would receive
a cheque for a similar amount at the end of the year, based on
the difference between average costs plus an agreed amount, and
the average returns received for the commodity.
Further details of this system can be given
if required.
June 2007
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