SPEAKING in the European Parliament on Tuesday, Commissioner Phil Hogan unveiled details of the latest EU support package agreed last month.
The Commissioner acknowledged that the crisis facing dairy producers and pig farmers has been ‘Both deeper and longer lasting than any of us had anticipated.’
He said he was pleased to confirm that, on Monday, the Commission adopted three draft Regulations. The first, doubling the intervention ceilings for skimmed milk powder and butter (though this needs official approval from the European Council).
The Commission has also activated regulations that allow producer organisations to plan milk production for a period of six months, and extended the regulations’ scope to include co-ops and other organisations.
Hogan also said: “The Commission has and is continuing to make every effort to lift the protectionist ban imposed by Russia on pig products from the EU.”
Russia introduced a ban on imports of food and farming products from European and North American states in 2014, in response to sanctions imposed as tensions grew over war in the Ukraine.
He added, “Even though so far the Russian reaction has not been very positive, the dialogue remains open.”
Hogan said the Commission is also looking for new opportunities outside Europe; having returned from a trip to Colombia and Mexico (which he described as “encouraging”), the Commissioner will leave for Kazakhstan, China and Japan later this week.
However, though the Commissioner’s “diplomatic offensive” might be yielding promising results, talks with the Mercosur trade bloc have drawn criticism from farm groups and EU Farm Ministers.
At the EU Council meeting on Monday, a large number of EU farm ministers warned that a trade deal could see South American agricultural produce – beef, in particular – flooding the market and undercutting European farmers.
Speaking at the EU’s agriculture council meeting on Monday, Hogan said he remains committed to the trade talks, but promised that negotiators are “very sensitive” to the needs of EU farmers.
EU farm groups have claimed the sector risks losing in excess of 7 billion euros as a result of the Mercosur deal.
Farmers claim the South American trade group is already a major exporter of agri commodities to the EU (accounting for 86% of beef and 70% of poultry meat imports), and have questioned the environmental, traceability and quality standards of meat imports.
On Monday, Thomas Magnusson, president of EU farm group Cogeca, said, “The Commission also promised Ministers it would come up with an impact assessment before proceeding with an offer which it has failed to do.”
Discussing the EU’s support packages, the agriculture Commissioner continued, “Over the past two years, the Commission has mobilised more than €1 billion in additional funding to support farmers, which complements the €56 billion which farmers received last year.
As part of that and in response to a deteriorating situation last summer, you will recall that the Commission took swift and decisive action to provide a €500m support package last September, including €420m in direct targeted aid.”
At a meeting with the Dutch EU presidency on Monday, European farming leader Thomas Magnusson urged Ministers to adopt measures that they agreed on last month as soon as possible including loan/ debt relief for investments.
He warned of the difficult situation on the dairy market, with prices continuing to drop for 25 months and farmers being squeezed by high input costs, and said that the lack of money paid out by member states has seriously reduced the impact of the headline measures.
On Tuesday, Hogan said updated figures should be published later in the day, and added: “Before passing judgement on the effectiveness of either the September package or the proposals I made last month, I would urge you to give those measures the opportunity to work.
In particular, I would point to the fact that, at the end of February, only €162m of the €420m allocated to Member States in September had been spent in 14 Countries.”
Defending the Commission’s response to the crisis, Hogan added: “We have legislative and budgetary constraints within which we must operate, including the market orientation of the CAP and the functioning of the internal market.
“Within those parameters, I believe the Commission’s response has been swift and robust. We have now essentially deployed all of the instruments available to us.”
FUW welcomes new minister
THE FARMERS’ UNION OF WALES has welcomed the announcement in continuity in the Welsh Government, following the Cabinet reshuffle (Nov 3), which saw Lesley Griffiths continuing in her role as Cabinet Secretary for Energy, Planning and Rural Affairs, with the addition of a deputy, Hannah Blythyn as Minister for Environment.
Responding to the news, FUW President Glyn Roberts said: “We welcome the continuity of keeping Lesley Griffiths as our Cabinet Secretary. Our working relationship has been a positive one and we look forward to continue working with her.
“With issues such as climate change and water management dominating agendas such as those listed in the Well-being of Future Generations Act, we are pleased to see Mrs Griffiths will be able to continue to fight for the interests of our rural communities – communities for which agriculture is a cornerstone.
“We are also pleased to see that Hannah Blythyn has joined the Cabinet. The addition of a new Minister recognises the complexity of the portfolio and we look forward to working with Hannah in the context of her remit.
“We met with Lesley Griffiths last week and will now seek a meeting with Hannah Blythyn at the earliest opportunity, to discuss those issues which are of concern to farmers and have an impact on all aspects of her portfolio.”
Commitment on funding welcomed
NFU CYMRU has welcomed the Welsh Government reaffirming its commitment to ring-fence funding for Welsh farming post-Brexit.
Last week NFU Cymru met with Cabinet Secretary for Environment and Rural Affairs, Lesley Griffiths AM, and in a wide ranging discussion covering a range of topics, Brexit topped the agenda.
Following the meeting, NFU Cymru President Stephen James said: “I am pleased that in our meeting with the Cabinet Secretary, Lesley Griffiths AM, she reaffirmed the commitment from the First Minister that funding for Welsh agriculture from the UK Government to the Welsh Government will be ring-fenced for Welsh farmers post-Brexit.”
The Cabinet Secretary’s commitment follows on from a response that the First Minister gave to Plenary on October 24 and reaffirms the commitment in the Welsh Government / Plaid Cymru Securing Wales’ Future document which stated that it is ‘essential that equivalent or greater resources to those Wales would have received from the Common Agricultural Policy (CAP) are provided from the UK to support Welsh farming’.
Stephen James continued: “NFU Cymru’s message on future funding arrangements has been clear and unequivocal. Governments in Cardiff and Westminster must maintain current levels of investment for farming in Wales, to ensure Welsh farmers remain competitive and can continue to produce food to the highest standards whilst maintaining and enhancing our environment and meeting our climate change obligations.
“At Plenary, the First Minister mentioned that he would consider looking at alternate ways of working and we would absolutely agree with that. This is an opportunity for us in Wales to work collectively to create a new agricultural policy framework that helps to achieve our vision of a productive, progressive and profitable farming industry that delivers jobs, growth and investment for Wales.
“We see the development of a new policy framework as an evolution over a period of time, with the timeframe for change very much determined by our future trading relationship with the EU.
“With the UK Government having committed to the same cash total in funds for farm support until the end of this Parliament, the next step is for the UK Government to clarify how these funds will be allocated amongst the home nations. This allocation should be based on the current formula for distributing CAP funds within the UK.
“Farming is a long term business and we need clarity and certainty on a range of issues including funding, trade and future agricultural policy. Developing agricultural policy and budgetary frameworks should be developed in partnership between the governments of the UK, so that a common policy framework can be agreed. A common policy, but a policy which allows flexibility for each country to take account of the pattern and practice of farming within their country.”
Family farms on the brink
FEWER than one in five family farms are making a profit from their farming activity, according to research undertaken by the Andersons Centre on behalf of The Prince’s Countryside Fund.
Analysis of data from 172 participants in the first year of The Prince’s Farm Resilience Programme has shown that the average farm made more than £20,000 loss from farming activities, and instead is reliant on other income streams to make a profit.
The shortfall was made up by income from non-farming activity, such as tourism enterprises, renewables, direct selling of products to the consumer, or income from working off farm as well as farm payments.
According to the report, broadly speaking, farmers face two business choices in order to cope with declining economic fortunes: either to focus on a farming solution or to redeploy resources away from agricultural production. In reality, it may be a combination of the two or farmers may vacillate between the two courses of action with periods of off-farm work generating income interspersed with a focus on the farm.
There are, of course, two further options open to farmers. First, they may cease farming, either entirely through selling up the farm or by letting their land. Or secondly, they might tighten the belt and continue business as usual.
Worryingly, many operators of small farms, believe the near future will see them retiring or otherwise leaving agriculture altogether.
Lord Curry of Kirkharle, chairman of The Prince’s Countryside Fund said: “Although the initial figure is startling, the research from the Andersons Centre shows that farmers are increasingly looking at their farms as a business, and are proactively looking for how they can generate an income from diversified sources to remain profitable.
“This is more crucial now than ever. Farmers must develop their skills and improve their business confidence to survive. If they do not, the risk of extinction for the family farm is very real; farmers must act now to both strengthen their core farming business and to spread the risk.
“The Prince’s Farm Resilience Programme is vital, because it equips farmers with the tools they need to remain financially stable. Maintaining diversity of farm size is essential to protect the British countryside and our rural communities.”
The Andersons Centre developed a bespoke and easy to use Business Health Check Tool for The Prince’s Farm Resilience Programme, allowing farmers on the programme to benchmark their performance, identify their strengths and weaknesses, and make informed business decisions as a result. Data from this tool was analysed to identify trends and performance in the farm businesses involved in the initiative.
The Prince’s Farm Resilience Programme aims to help 300 family farms, across 15 locations, each year. It brings together like minded family farm enterprises in local networks, to review their current activity and identify improvements and opportunities that can be made on-farm to build resilience, effectively helping farmers to take control of their businesses. Farmers who took part in the first year have confirmed they have higher levels of confidence in their business, better business management, and stronger communication within their family.
The Prince’s Farm Resilience Programme directly addresses some of the issues raised in a report commissioned by the Fund from the University of Exeter, ‘Is there a future for the small family farm in the UK?’
The report detailed how the loss of small family farms would have devastating effects for the British countryside, leading to loss of employment, breakdown of rural communities, and potential negative environmental consequences. The report concluded that it was essential to maintain a diverse range of farm sizes, but that this was in significant jeopardy.
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