FOOD
     
Dr. Franz Fischler
Dr. Franz Fischler (former Commissioner for Agriculture, Rural Development and Fisheries, European Commission, candidate to become the next Director General of FAO) and CEPS discussed Europe's role in fighting global food and environmental insecurity on 31 March 2011.

Food trade is more often disturbed by investment bankers and pension funds, who only are on the move for profit. It would be good to tie their activities. Prices for sugar, maize, flour and meal are as high as in 2008 and as thirty years ago. The Food Price Index of the FAO reached the highest level ever. People, living in countries which have to import food, walk in the streets. High priced bread played a role during the recent revolts in Tunisia and Egypt. Right on food is an universal human right. However, tirades against speculators and multinationals set somebody against oneselfs. The European Commission started the project 'TRANSFOP' (Transparency of Food Pricing).

Comparing the situation with 2008, there a two differences. Now the price of rice stays stable and some African countries has had now good harvests. But it is not less bad, for the economic crisis hit societies. Egypt imports 2/3 of their wheat. Subsidizing bread-prices, which started by some governments, will mean an extra strike on budgets. Reform is absolutely necessary. The EP should move the CAP reform debate beyond national agricultural interests and budgetary disputes. Developments at international markets are important, but of more importance is the local situation. When prices rise on the world markets, they will rise to locally. But if prices decrease on the world market, local prices stays often high. In many countries import is dominated by a small elite, that is earning on it very well. A small group of merchants and agents is managing the food chain.

away from their laMany measures are taking time, such as better storage facilities. Also a better look at growing production of biofuels have to be done and an approach for speculation should be achieved. Production of biofuels (Henry Ford ever said: 'the fuel of the future is going to come from fruit, seeds and sawdust') pushes the agriculture-products of fields up and is encouraging speculators to invest and to draw everything what is in it, without people on local level are absled to earn something. A noble aim in 2008 of the EU was to gain 20% in 2020 of energy supply from renewables. But results are other levels in food-production and social consequences too. Farmers were often movednd in order to raise biofuels.

Reasons for increase of prices are divers. Negligible of agriculture on small scale, crop failure and a growing mismatch between demand and supply. Speculation too has increased the rise of prices, started by behaviour of investors, who has nothing to do with food. This is getting more and more severe and has to stop. There are two kinds of speculators; traders who postpone purchases to earn better prices and derivatives-traders who are only active on the food-market due to profits. What is worrying are investments banks and pension funds, which are trading without showing any interest for the substance. They are taking decisions only based on financial considerations and not based on produced crops and therefore risks will increase for all persons concerned.

The whole trade could be lead up to imbalances and therefore we need different rules for food-traders and institutional-traders. For this, the US has recently signed the Dodd Frank Act.

Supervision, however is hardly implemented. Europe wants more transparency (who is buying what) and there is already a supervisiory body.

Some projects however, are good for agriculture. Producing jatropa for diesel and maize together is happening and there is not competition between food and fuel. Farmers stay on their country, but are involved due to structures of co-operations. The diesel serves locally for electricity. Ethanol however, is slurping away water and energy and is therefore no good and irresponsible.

In principle there is sufficient food production for all the people in the world. Unfortunately this is not the matter with availability. 20 Percent is getting lost and 50 percent with vegetables and fruit. There are natural calamities and crop failures (droughts) In the poor countries there is a lack of storage and a bad infrastructure. In rich countries shops are throwing away 35 percent. Working on this, we will win a lot.

CAP2020, a debate of more than agricultural interest. It affects the environment, climate change, food quality and food supplies, trade and developing countries, as well as rural communities.

FAO

25 September 2012 The European Food Security Conference
Though the demand has increased, it is not really a problem. Now, half of the our wheat supply we have to use for cattyle-food and that does mean that the production will have to increase enormously and that we need more land for agrivulture. The trend however, is that we have less field amoung other things by biofuels. Less consuming of meat is quite possible. That's not possible in for instance African countries. Two goats and a cow are enormous holdings. Besides they serve as provision for milk. World-wide 850 miljoen people are depending on herding. From all the people who are starving, half of these people are farmers. Countries are investing more in infrastructure for the export than for local consumption. Only 8 à 9 percent of all food is international dealt in. However, this part is disturbing more and more the development of agriculture. This is out of proportionality. Small farmers have no influence in this process. They have to become more influence to protect their income better. Now multinationals, a small club of agents and local elite who is managing the export, are deciding the total chain food.

The position of small farmes have to be strengthened. Governments are often afraid for the poor rebels and less for the farmers. Governments have to support the farmers, otherwise the problem of food famine is getting bigger and bigger. Then you will see insane rises of prices as we see now.

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The future of the common agricultural policy (CAP)

TRANSFOP

The overall objective of this project is to address the key aspects of the food chain both that determine the transmission of price changes from farm to consumer levels, emphasising the role of competition in the intermediate and retail stages of the food chain and the broader regulatory environment in which firms in food supply chains across the EU compete. Given that the characteristics of the food sector vary considerably throughout the member states of the EU, and the observation that experience resulting from the recent commodity price spikes were significantly different across many countries, a key feature of the project will be to address how the variation in the structure of the food chain across different EU Member States contributes to food price adjustment in individual countries.

Further, the project will address on-going developments in the food chain with regard to various aspects of vertical coordination in food supply chains, consolidation in the food sector, how the regulatory environment in which firms compete affects the overall functioning of food supply chains across the EU and the extent to which these issues also impact on SMEs. To this end, the project will address the issue of price adjustment in various dimensions across EU Member States, the selection of Member States reflecting differences in industry structure, the regulatory environment in which firms compete and the experiences they have recently faced with regard to commodity price shocks. In addressing these issues, a selection of different commodity chains (both 'long? and 'short?) will form the basis of the analysis. The research project will be expected to result in significant new insights that address the functioning of food supply chains across the EU Member States that impact on food pricing transparency throughout the EU. To this end, the researchers will interact with stakeholder groups representing interests throughout the food chain in forming a potential Action Plan.

During an event on 30 March 2011 on the future of the common agricultural policy (CAP) not only explanation, some historic figures and facts came on the table, but also Europe's CAP after 2013. This has to do too with the European Financial Framework post 2013. After all, it takes up 40% of EU's budget.

Remarks on development over time spoke about agreements (initial objectives were set out in Article 39 of the Treaty of Rome 1957, Agenda 2000, concerning CAP 2020 the Lyon Report), analytic data (prices, subsidy, compensatory payments, quota's), views on behaviours, policies and a role for the EU in FAO.
Common policy includes productivity, standard of living for farmers, stable markets, food security, export, reasonable prices for consumers and consists of 2 pillars: market & price policy (direct income support) and countryside policy
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In 1968 there has been price supporting import levies, intervention, export subsidies and relativiliy low prices. Some 15 years later there was over production and supply control in order to change in 1992 to price reductions and compensatory payments (budgetizing CAP, transparency), to a single payment scheme and cross compliance in 2003 and finally to a health check in 2008.
Present situation with new member-states is, that there are now other farm-structures (fragmentated and on large scale former state-owned). Market policy, single market and rural policy play an important role nowadays

Sequence (1 as far as 5 inclusive) of drawing-up on direct payments: France, Germany, Spain, United Kingdom and Italy. Sequence (1 as far as 5 inclusive) of drawing-up on country-side balance: Poland, Hungary, Rumania, Czech Republic and Bulgaria.

On agenda's is export support, market access, domestic support (WTO), EU budget review (policy priorities, benefits and costs, financial perspectives 2013-2020) and health check CAP (market situation, single payment, dairy quota - soft landing? - beyond 2013). OECD pays attention to agriculture in relation to climate change. There is scarcity of natural resources (soil, water, phosphate), the role of global foodchains (power and income distributions within the chains, public and private standards) and new expectations by consumers and societies.

Attention should be focussed for policies on agro-activities / foodproduction, on rural development and on landscape / spatial rural planning. And after 2013 for new policies on trends, market perspectives and new challenges such as climate change, energy and water.

France wants to go back to the old CAP, UK wants less regulation and subsidizing. Global food prices continue to rise. The World Bank’s Food Price Index increased by 15% between October 2010 and January 2011 and is only 3% below its 2008 peak. The last six months have seen sharp increases in the global prices of wheat, maize, sugar and edible oils.

Other information about food put the case that there is insufficient food supply in the EU if there is a sudden famine, caused by catastrophes. Focussing on only liberalizing of agriculture is not enough. Making supplies is also a component of attention. Although food security is not in in immediate danger, prices can rise high from 50 to 100 percent.

Possible catastrophes could be food terrorism, abrupt climate change, collapse of infrastructure or energy supply and failures of food-industry. Economic consequences could be large and it is possible it will take 5 or 10 years to bring production back to old levels.

Apart from danger of nuclear energy, new animal diseases is of high danger. A difference between food certainty and food security have to be distinguished. Managing of grain and lay out of fields can solve. Several years ago, the European Union wrongly abolished these two buffers. Furthermore, there is too much dependence on the imports of soy and forage from out other continents. The EU self have to produce more.