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November 21, 2007

EU: Commission outlines CAP reform strategy

The European Commission has released its long-awaited “health-check” proposals to reform the Common Agricultural Policy, in a bid to expose key food production sectors to global market demand.

The European Commission has released its long-awaited “health-check” proposals to reform the Common Agricultural Policy, in a bid to expose key food production sectors to global market demand.

Among its proposals, the Commission has suggested immediately widening milk quotas, so dairy product manufacturers are freer to buy the ingredients they need.

Brussels is also proposing to stop the stockpiling of cereals to pump up prices. Bread-making wheat would be exempted from this proposal, with so-called “intervention” controls would be maintained.

The Commission has also suggested scaling back subsidies paid to large food producers, a move that would impact on integrated agro-industrial businesses.

Under the proposals, there would also be a reduction of direct payments to all primary food producers receiving more than EUR5,000 (US$7,415) a year.

The European Parliament agriculture committee debated the Commission’s proposals yesterday (20 November), where MEPs generally backed the package. German Christian Democrat MEP Lutz Goepel said: “We must perform a check-up, in fact an urgent one”.

However, there was concern over Brussels’ suggestion that large producer subsidy savings should be redirected to rural development programmes. This could spark dissension over which countries should benefit, MEPs warned.

The Commission’s proposals will be fashioned into formal legislative proposals next spring.

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