British farm minister takes aim at EC grain surplus
British Minister of Agriculture Michael Jopling has embarked on a crusade to try to reduce the huge grain surpluses that have been accumulating in Europe since the European Community adopted a Common Agricultural Policy (CAP) in 1957. In his role as current president of the EC Council of Agriculture Ministers, Mr. Jopling recently presented a proposal called ``Setaside.'' It would involve taking 7.5 million acres of European land out of cereal production by offering farmers incentives of 76 for each acre left fallow and 15 for each acre used to grow non-surplus crops.
``Something must be done urgently about these grain surpluses,'' he said during a Monitor interview here in his parliamentary constituency in England's Lake District.
``We have been told that European Community intervention stocks or surpluses, which the Community have been buying from farmers to give them a guaranteed price, could increase dramatically from 15 million tons to 80 million tons in 1991 if not checked. We just can't let that happen.''
He said if EC continued to let the surpluses grow, the problem would get even bigger.
``The problem is that levels of support have not been adjusted to take account of increased productivity,'' he explained. ``As we have crossed the threshold of self-sufficiency in Europe in many commodities, overproduction has emerged and has not yet been adjusted. The CAP needs to be brought back into line with the realities of the market. . . .''
Jopling said that if the land under cereals was reduced by 7.5 million acres, production would come into balance.
He added that, in terms of unit cost, it would be more economical for the European Community to pay about 300 ECUs (187) per hectare to keep land fallow than to buy grain at 180 ECUs (112) per ton. (ECU stands for European Currency Unit. The current rate of exchange is 1.6 ECUs to 1.)
Officials estimate that the net savings to the EC over 5 years could exceed 10 billion ECUs (6.25 billion). The effect on the European Agriculture Guarantee Fund, which finances the intervention stocks, would be broadly neutral. The whole of the net gain would accrue from savings by member states on purchases into interventions.
The EC now spends about 11 billion a year (70 percent of the EC budget) on intervention stocks, which include not only grain but also butter (a present surplus of 1.4 million tons) and beef (.5 million tons).
But how are others responding to his ``Setaside'' proposal?
``There have already been kind comments about it from other agriculture ministers in Europe. Some say they don't like this or that part of the proposal, but they all agreed that something needs to be done urgently and on the whole the response has been favorable.''
He said the scheme was already being tried out in Germany, in Lower Saxony.
How do farmers feel about it?
``I went to a farmers' meeting this morning in Yorkshire, and they see the sense of it,'' said Jopling, who farms his own land at Thirsk in North Yorkshire.
``Farmers know that we have to reduce the land under cereals and appreciate that we are not asking them to take out the most productive land. We are only asking that, where they are finding it difficult to grow cereals, they accept our alternative, which, if they have only been getting a low yield, could mean a bigger return for them.''
``As a farmer, I appreciate that farmers are living in difficult times,'' he declared. ``But I want to do my utmost to stop the problem of surpluses building up -- for the sake of farmers as well as everyone else.''
As to the question of disposing of surplus stock, Jopling replied: ``I am prepared to support cost-effective measures to dispose of stock while surpluses exist. For instance, we sell beef and butter to Community processors on favorable terms; butter is also sold at no profit to charitable organizations. But the most cost-effective way is to sell them on the world market.''
He pointed out that intervention stocks were ``not a mechanism to provide cheaper food than is available elsewhere.
``I sympathize with the idea that our surpluses ought to go to feed the world's hungry,'' he stated. ``The conflict is not one of aims nor priorities, but a practical one.''
He said the EC did have a good aid program, through which surpluses benefited 50 countries. Last year the EC provided over 1 million tons in food aid to the eight most needy countries in Africa.
Jopling's proposal will be considered officially by the European Commission and by the EC Council of Agriculture Ministers in the months ahead. Jopling is also hoping that after more detailed study by officials and member states, his plan will emerge in the next round of European price-fixing arrangements in 1987.