2012年-CEPS欧洲政策研究中心_The_EU_Budget_at_Risk_of_a_New_Policy_Blunder_2页_57kb

EU Budget at Risk of a New Policy Blunder Summary

Core Content

The document discusses the potential risks of the European Union's (EU) budget review process, particularly in relation to the Common Agricultural Policy (CAP). It highlights the current global food sector crisis and the political pressures that may lead to misguided policy decisions.

Main Points

1. Delay in Budget Review

• The EU is facing delays in reviewing its budget, with the European Commission postponing proposals until after the French Presidency and the European Parliament elections in 2009.
• These delays may be used as a pretext to avoid meaningful reform of the CAP, similar to past attempts to block changes.

2. Global Food Sector Crisis

• The food sector is experiencing a crisis due to bad harvests and the use of food crops for biofuel production.
• This has led to shortages and increased food prices, with some cereals seeing price increases of over 100% in dollar terms.

3. CAP and Food Security

• The French Presidency is using the current price crisis as a justification to defend the CAP, citing food security and price stability.
• However, the CAP is not well-suited to address the current challenges, and increasing subsidies is seen as unjustifiable.

4. Agricultural Price Trends in the EU

• Agricultural product prices in the EU have declined in real terms over the past decade.
• Recent price increases are relatively limited compared to historical trends, as shown in the deflated price index (year 2000 = 100).

5. Impact of the Strong Euro

• The strong euro has helped EU consumers and producers by reducing the impact of rising oil and food prices in dollar terms.

6. Agricultural Income Trends

• Real agricultural incomes in the EU have increased over the past few years, with notable rises in countries like Lithuania, Sweden, Finland, Germany, Spain, and France.
• Income disparities exist due to the type of products produced, with cereal prices rising significantly while others, such as pig meat and olive oil, have fallen.

7. Contradictions in Policy Response

• The political response to high prices is seen as contradictory, as the CAP historically kept prices above world levels.
• The current situation is attributed to market forces rather than policy interventions.

8. Supply Response to High Prices

• High prices are expected to increase supply, which in turn will bring prices down.
• There is no shortage of agricultural land, with substantial idle land in the former Soviet Union that could be cultivated under high global prices.

9. Alternative Policy Approaches

• Investing in technical assistance for developing countries could improve their agricultural production and reduce reliance on subsidies.
• Subsidized excess production in developed countries is considered a cause of low local production in poor countries.

10. Long-Term Agricultural Research

• Investment in agricultural research, which has been declining, could lead to more sustainable and efficient food production.
• Examples include developing second-generation biofuel technologies and high-yielding, resilient crop varieties.

Key Information

• Price Increases: The export prices of key agricultural products like wheat, maize, barley, and soybeans have increased significantly in the period from June 2007 to June 2008.
• Income Trends: Agricultural incomes in the EU have generally increased, with some countries seeing substantial gains.
• Land Availability: There is a large amount of unused agricultural land in the former Soviet Union, which could be brought back into production.
• Policy Concerns: The document warns against using the current crisis as an excuse to maintain or increase CAP subsidies, advocating instead for market-driven solutions and investment in research and development.
• Political Context: The French Presidency is likely to push for maintaining the current CAP budget, similar to past agreements, which could lead to budgetary stagnation and inefficiency.

Conclusion

The EU is at risk of repeating past policy mistakes by responding to the current food price crisis with increased CAP subsidies rather than addressing the root causes through market mechanisms and long-term investment in agricultural research. The document emphasizes the need for a more rational and forward-looking approach to EU agricultural policy.