FarmPolicy

February 21, 2019

Climate Legislation; Farm Bill; Crop Insurance; Biofuels; Food Stamps; CFTC Issues; and EU Issues

Senate Climate Hearing, Day Two

DTN Ag Policy Editor Chris Clayton reported yesterday that, “Senators and industry groups argued over the impact a mandatory cap-and-trade market would have on energy costs and subsequent jobs and the economy in a second day of hearings on a potential climate and energy bill.

“The Senate Environment and Public Works Committee, chaired by Sen. Barbara Boxer, D-Calif., is attempting to draft and pass legislation to reduce greenhouse-gas emissions that would ideally marry up with international efforts to reduce carbon emissions. It’s unlikely, however, the full Senate will have a floor debate on a climate bill before a United Nations meeting on climate change in mid-December.

“The committee was slated for a marathon session with 27 witnesses Wednesday on topics ranging from jobs and economic opportunities, to national security and electric company concerns. Topics of particular interest to rural Americans ranged from the prospect of higher energy bills for members of rural electric cooperatives to possible new jobs in solar and wind energy.”

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“Analysis from Brussels”- by Roger Waite- Fischer Boel Not Staying On As EU Farm Commissioner

Fischer Boel Not Staying On As EU Farm Commissioner

By Roger WaiteRoger is editor of AGRA FACTS, the Brussels-based newsletter on EU agriculture policy, and is a Journalism Fellow at the German Marshall Fund of the United States. “Analysis from Brussels” is posted exclusively at FarmPolicy.com.

Mariann Fischer Boel confirmed last month that she will be retiring at the end of her mandate and not staying on for a further 5 years as EU Farm Commissioner. While her decision came as no great surprise to me, there had been growing media speculation in recent weeks that she would stay on – because both the Danish government and the Commission President José Barroso had asked her to. In other words, it was up to Fischer Boel herself to decide whether to stay. And, to her credit, the 66-year-old has had the honesty and grace to step down while she’s on top.

It’s curious to see and hear the genuine disappointment that the likeable Dane is retiring. When she was first appointed, there was no shortage of doubts as to whether she was up to the job – having been a relatively unspectacular Danish Minister (advocating the rather unrealistic liberal positions that Denmark insists on in Council debates). She only got the job ahead of Dutchman Cees Veerman because she was a woman, critics were only too keen to recall. Indeed, her “Hearing” in the European Parliament – in front of the EP Agriculture Committee – was not entirely convincing. She only spoke in Danish, and gave absolutely no indication of her position on sugar (with reform proposals just a few months away). Nearly 5 years on, she has proved all of the critics wrong. Describing her as “tough, but fair”, most EU Farm Ministers made clear within the margins of the recent Informal Farm Council in the Southern Swedish town of Växjö that they would have preferred MFB to stay. France was perhaps the most “neutral” about the announcement, i.e. not sad to see her go, but one could argue that this is further proof of a job well done. Perhaps the most frequent complimentary comment was about the personal relationship that each of them had developed with Fischer Boel – confirming that the white-haired grandmother’s greatest talent is her inter-personal skills (and the way in which she fulfilled the usual requirement of refusing political demands). Seeing Fischer Boel among farmers, journalists, civil servants, and children is an object lesson in PR, with her particular ability to pat someone on the back, squeeze their arm, shake their hand, laugh at the right moment, etc. But has she been a good Commissioner politically?

Following on from the 2003/2004 “Mid-Term Review” completed by her predecessor Franz Fischler – now often called the “Fischler reforms” – Fischer Boel always had a hard act to follow. Moreover, with the EU having expanded to 25 Member States (later 27), it also meant that the decision-making process was more difficult. With the major reforms having set the nature of EU farm policy until 2013, her main tasks were only ever going to be a “mid-term review” of the Fischler reforms – plus the need to take on the other sectors, which Fischler had not really addressed – wine, fruit & vegetables, and, most difficult of all, sugar.

In what was her first full test, the sugar reform end-game of November 2005 revealed Fischer Boel’s steely side for the first time – as she held on for a 36% cut in the support price over 4 years (as opposed to the 39% cut over 2 years that was originally proposed by the Commission). Although some of the late concessions had to be revisited, the net impact of the reform has been to re-balance the EU market – reducing production by roughly 6 million tonnes, including all sugar beet production in a number of countries, such as Ireland. As a result, the EU has now become a net importer of sugar, rather than a net exporter – as production has tended to concentrate in the most efficient production areas. The high external tariff means that there is still a question mark about true competition on the EU market, as market prices have by no means fallen by as much as the support price. The fruit & vegetables and wine reforms that followed (in June & December 2007 respectively) saw similar ideas for better balancing the market, reducing structural surpluses, improving farm structures (through producer groups) and decoupling support – with a view to facilitating less competitive producers to exit the sector. Again Fischer Boel was able to retain most of what she had proposed – underlining that the change from 15 to 27 Member States has strengthened the Commission’s role in the negotiating process. Basically, there are too many countries for the end deal to vary too much from what the Commission proposes.

WTO – No Win Position For Farm Commissioner

It is difficult to reach a clear verdict on MFB’s performance in the WTO negotiations. For one, there has been no deal yet, but even if there had been one (in July 2008, for example), opinions remain divided over the potential impact that the draft deal would have on EU agriculture. The fundamental problem for whoever is EU Agriculture Commissioner is that the EU is basically willing to provide certain concessions on agricultural market access in order to make gains on services & NAMA – and can therefore probably never make any net gains for European agriculture. (Other than commitments for policy reform in the US & Japan, perhaps.) Whereas Pascal Lamy & Franz Fischler (responsible Commissioners from 1999-2004) were probably the best ever negotiators that the EU have (and will) ever have in knowing precisely how far they could push Member States, the combination of Fischer Boel and Peter Mandelson (as Trade Commissioner) is probably the most liberal that the EU will ever have. Latest positions appear to have provided the maximum possible concessions on agriculture (probably exceeding their negotiating mandate) without having really gained very much at all on NAMA and Services. Rightly or wrongly, the perception in Brussels is very much that it was Mandelson, rather than Fischer Boel, who was perhaps too generous in the agricultural part of the package before he had nailed down gains on NAMA. With Domestic Support now set to be 90% decoupled (by 2012) and Export Refunds unlikely to stay much beyond 2013 (when the current budget period ends) because of domestic political objections, the only real issue left for the EU is the extent to which Europe can maintain some form of tariff protection – and which products the EU will opt to define as “sensitive”. Past experience suggests that Fischer Boel and Mandelson will be blamed for whatever might eventually be agreed.

New Candidates Of The Job

Attention of course now turns to who might succeed Fischer Boel. With the new EU Treaty of Lisbon likely to come into force next year, the next Commission College will basically see 1 Commissioner from each of the 27 Member States. With José Barroso (former Portuguese Prime Minister) now confirmed for a second 5-year term as Commission President, his first task is to ask each Member State to nominate a few able politicians and for him then to work out who should get what dossier – in a way that provides a good blend between big and small Member States, old and new, male & female candidates, and taking into account a fair balance among the main political parties. I call it a 27-dimensional puzzle. However, we commentators have the advantage (at least for the next couple of weeks) that we can speculate without being wrong.

So, with Portugal already excluded (Barroso is their Commissioner), here’s the latest thinking about the other Member States – (as of early October):

Belgium, Estonia, Finland, France, Italy, Lithuania, Luxembourg, Poland, Slovakia, & Slovenia have already nominated a new Commissioner / confirmed that the sitting Commissioner will stay.

Cyprus, Latvia, & Spain are expected to re-nominate their existing Commissioner in the near future. Maybe the UK, too.

An unwritten rule basically excludes the “large” Member States from getting the job, i.e. France, Germany, Italy, Spain & UK. (We still don’t know if Poland and Romania may count as “large” in this context.) France, for example, has named former Farm Minister Michel Barnier as its next Commissioner – but there is simply no suggestion that he will get the “Ag Job”.

So, of the remaining Member States, one can certainly exclude Sweden (not interested in EU agriculture), and Malta & Cyprus (too small, and not agricultural enough).

By my reckoning that only leaves 8 – Austria, Bulgaria, Czech Republic, Denmark, Greece, Hungary, Ireland, Netherlands & Romania. Bulgaria can certainly be excluded because they have had problems of fraud in implementing CAP support (for pre-accession programmes), and it is probably fair to exclude them immediately. The Czech Republic and Hungary can probably also be excluded, too, as the names floating in the media have nothing to do with agriculture – and there remains scepticism from many observers in Brussels whether the Agriculture dossier (and responsibility for the politically hyper-sensitive next CAP reform) can go to a New Member State. This now leaves just 5 possible Member States – – Austria, Denmark, Greece, Ireland, Netherlands & Romania.

In Austria – former Farm Minister (1995-1999) Wilhelm Molterer is widely tipped as the country’s next Commissioner – albeit for one of the financial dossiers (preferably as Budget Commissioner), rather than Agriculture Commissioner. Seen as a safe pair of hands for agriculture, one could nevertheless argue that the pro-farm budget lobby is better off with him as Budget Commissioner (defending the overall size of the farm budget – and the level of Rural Development spending in particular) and someone else succeeding Fischer Boel. I think Barroso would prefer not to have an Austrian Farm Commissioner just 5 years after Franz Fischler stepped down.

In Denmark, there are strong rumours that Farm Minister Eva Kjer Hansen could be nominated as Commissioner – but again with a different portfolio in mind, such as Social Policy, or even Consumer Protection or Health. However, she is not the only name in the media – and she is generally seen as not as good as Fischer Boel.

Greece has only just elected a new (Socialist) government, which virtually guarantees that the Current Environment Commissioner Stavros Dimas will not be re-nominated. It is totally unclear who they might nominate, but the Greeks have never had a particular interest in the CAP, and I would be very surprised if they post went in that direction.

Ireland, by contrast, has a particularly strong interest in agriculture, and would probably be the obvious first choice if a suitable Irish candidate were easily available. Former Farm Minister Mary Coughlan has been mentioned as one option, but the government coalition has such a wafer thin majority in Parliament at the moment – and is so low in the opinion polls – that it cannot risk a by-election. Consequently the next Irish Commissioner is likely to be someone not currently in the Dail – maybe even former Taioseach and current EU Ambassador to the USA, John Bruton.

As far as the Netherlands is concerned, former Farm Minister Cees Veerman is probably the best qualified person for the job – as a farmer, leading academic (Professor at Wageningen University) and politician (Dutch Minister from 2002-2007). Moreover, as the chair of government panel on climate change, he is still close to the heart of government. However, there are rumours that the Prime Minister may want to drop certain Ministers from the Cabinet – and “promoting” them to Brussels is a traditional way of doing this. Current Farm Minister Gerda Verburg is one name mentioned in this context. Having a Dutch Commissioner would also fit in well within the general thrust of the future of the CAP, as seen in DG AGRI – market-oriented and budgetarily aware. Having said that, there are a number of other dossiers up for grabs in the new Commission, and there are strong rumours that Prime Minister Jan-Peter Bakenende himself is looking to become the first “President of the EU Council” – a new job foreseen under the new Treaty of Lisbon. Although this post is not part of the ext Commission College, there is a broad acceptance that whichever country gets that position, it will not then get a high profile Commission dossier like Agriculture.

That brings us to Romania – where the government has openly called for “independent” former Agriculture Minister Dacian Ciolos to be given the job of succeeding Mariann Fischer Boel. The 40-year-old appears to have done a good job in his 2 years as Minister – above all in taking strict measures to ensure that the minimum requirements for introducing CAP support were in place. Although he is young, and has somewhat limited experience as Minister, he is probably as well qualified as most other candidates. Behind the scenes, however, there is a notable opposition to a Romanian Commissioner – especially from the “old” Member States – with officials questioning whether Romania has properly implemented the CAP so far, and concern that a Commissioner from a “new” Member State may concentrate too much on evening out the current level of direct payments (where the new Member States clearly receive a lower amount per hectare on average). I can’t help feeling that there is also considerable opposition to the way in which Bucharest is publicly lobbying for the post – fearing that this might set a precedent for the future if it succeeds. To be fair to the Romanians, their current Commissioner has responsibility for “Multi-lingualism” – probably the most nonsensical portfolio ever created within the European Commission – and they are particularly keen to have something more meaningful in the next Commission.

MFB To Stay Until February?

So, it remains open who the next Commission of Agriculture will be. I certainly wouldn’t rule out a new name appearing from nowhere – like Fischer Boel 5 years ago. The only other question is when he/she will take office. Formally speaking the current Commission College’s mandate runs until the end of October – but EU rules permit it to carry on in a caretaker capacity until a new Commission takes office. Barroso and others have made clear that it makes sense for the new College only to take office once the new Lisbon Treaty has entered into force. Prior to the Irish referendum on the Treaty at the start of October, it was assumed that “Lisbon” would be in place by the start of next year. In recent days, however, it has become clear that the Czech President Vaclav Klaus is seeking to exploit his country’s position as the last Member State to ratify the Treaty, by introducing additional demands. This last minute hostage-taking is proving particularly unpopular in Brussels – and there are indications from the Barroso camp at the present time that the new Commission may be delayed until mid-January or mid-February, rather than give way to Klaus on this. In short, a handful of young children in Denmark will have to wait a bit longer until they see more of their grandmother.

By Roger Waite