12 Apr 2017
Omnibus Regulation Brings Supply Management Back on the EU Agenda
The European Commission’s “Omnibus Regulation”, which proposes revisions to the EU’s multiannual budget (2014-2020), is currently being discussed in the Council and Parliament. The proposal outlines changes to the main EU funding regulations, including a revision to the rules and controls within the basic legislation of CAP. The changes that are proposed aim to fine-tune and simplify certain elements of the current policy implementation.
Within the Parliament, Agricultural MEPs will provide an opinion on CAP related issues within the proposal, while Budget MEPs lead on other aspects. A draft opinion, written by German MEP Albert Dess and Italian MEP Paolo de Castro, has been published, but contains a number of amendments which pose a serious threat to the Irish dairy sector.
Of key concern is the proposal to introduce a permanent supply management tool, which would allow the Commission, at times of market imbalance, to grant aid to producers who voluntarily cut their production, similar to the scheme run by the Commission from September 2016 to January 2017. This proposed scheme however would be largely financed through a levy on producers who increased their production at the same time. ICOS has raised its strong opposition to these amendments and is actively lobbying for their removal, through emphasising:
- This proposal would be hugely detrimental to the Irish dairy industry and dairy farmers who expect to significantly grow their output now that dairy quotas have ended and who have invested heavily in recent years in preparation for this. Irish dairy farmers would be particularly at risk of fines for production increases under this proposed measure.
- The proposal is contrary to the expectations of the industry, to Irish government policy outlined in Food Wise 2025, and the direction taken by the EU in the last CAP reform. Farmers and the agri-food industry need policy certainty if they are to be able to strategically plan and grow. This proposal would undermine the planning and investments the industry had made in recent years.
- In addition, in changing the direction of EU policy towards greater supply management, these amendments goes beyond the objective of Omnibus proposal, which is for ‘simplification’ and not for a ‘mini-reform’ of the CAP.
- Additional funds needed to operate this supply-management scheme would impose an unnecessary cost burden on the EU-budget, damaging to all farmers. This is especially true if these funds are removed from the operation of other CMO support tools such as Private Storage Aid and Public Intervention.
- As a support tool, the supply management scheme outlined in the proposal is administratively burdensome for farmers, co-operatives and national administrations. It would also be slower to take effect than the tools currently in place and therefore does not address a key issue of swift and efficient support for the markets in times of crisis.
Additionally we are very concerned with the proposal within the draft opinion to support the establishment of bargaining organisations, aimed at addressing “tensions in the market place”. Such organisations would add an unnecessary additional layer of bureaucracy to the supply chain and would undermine established co-operatives, which are the most effective, socially responsible and sustainable form of producer organisation.
By Alison Graham