On Tuesday, the EU Parliament’s agriculture committee, discussing changes under the next Common Agriculture Policy (CAP), voted to help farmers to cope with volatile prices, through new risk and crisis management tools and efforts strengthen their bargaining position in the food supply chain. The supply chain should be made more transparent, and the EU budget more flexible, so that funds can be deployed faster to tackle crises like the dairy price crash that affected farmers over the past two years, MEPs said.

“I am really happy with the result of the vote. We are paving the way for the upcoming Common Agricultural Policy. The long-term aims of the CAP must be to ensure fair standards of living for the agricultural community, stabilise markets and guarantee viable food production. That's why we have to push for a better organisational capability in various sectors and to strengthen the contractual systems for farmers, processors, and distributors at the same time”, said rapporteur Angélique Delahaye.

Her resolution was adopted by 29 votes in favour to 11 against, with three abstentions.

The MEP’s resolution states that the current Common Agricultural Policy lacks effective tools to address growing market volatility and help farmers cope with price changes, and adds that existing risk management tools, such as mutual funds, income stabilisation and insurance are implemented slowly, unevenly and are poorly funded. MEPs therefore said the EU must develop new climate, health and economic risk management tools - and improve use of existing strategies - to safeguard food production, ensure competitive and sustainable farming on the continent and encourage new entrants into the sector.

MEPs want to see:

• Early warning systems that could help head off crises or at least offer warnings of periods of volatility;
• Research into preventing crises and cycles of volatility;
• A “crisis reserve” for support funding to be kept outside the EU budget;
• Measures to keep farmers informed about risk management, market data and the options available to them;
• Standard, transparent, balanced and collectively negotiated contracts to improve farmers’ bargaining power in the supply chain (MEPs said “The size of a producer organisation representing farmers in collective negotiations should ideally correspond to that of its negotiating partner”);
• A more transparent supply chain, with information on prices and costs made available for all stakeholders (MEPs are calling for “An EU-wide electronic map providing real-time information on the availability of agricultural products, EU agricultural price observatories covering the entire chain from producer price to final retail price, and sufficient funding to enable observatories to make recommendations”)

The Agriculture Committee’s resolution will go before the full Parliament (most likely in mid-December), and will then go on to inform the Commission’s Agriculture Market Task Force, and act as a starting point for negotiations on the next CAP reform process.

The next reforms of the Common Agricultural Policy - which is the EU’s largest single spend - are set to come into force in 2020, by which time the UK may have completed its withdrawal from the Union, if Theresa May’s scheduled triggering of Article 50 in early 2017 comes off as planned.

The vote came as the EU Commission adopted a higher budget for promotion of agricultural products in 2017 - €133 million compared to the €111 million available for 2016. The funding will go to target new export markets in countries outside the Union.