State of union speech proves the union’s in a state

The European Commission president, Jean Claude Juncker, recently delivered his state of union speech – a term based on the annual speech a US president delivers to the Houses of Congress and Senate. In Mr Juncker’s case, the subject was the state of the European Union, and the audience the European parliament in Strasbourg. It was hard to disguise the reality that the EU is in a sorry state indeed. It has failed to find an effective solution to the refugee crisis; one of the key Member States, the UK, could well leave, and its two key common policies – the euro and agriculture – are in crisis. Making matters worse, Brussels seems incapable of solving the problems of the euro, and unwilling to show the imagination needed to solve the crisis in European agriculture.

When the emergency package emerged at the September farm council there was a sense of disappointment that 4,000 farmers protesting outside the building had not moved the Commission an inch – or should that be 25mm? Even more surprising was that pressure from some key players, including the French farm minister, seemed to melt away. Ministers accepted much too quickly that the €500 million aid package was the best they were going to get from Brussels.
Given the scale of the crisis, and the fact that the funds will be spread over 28 Member States and billions of litres of milk, it will amount to very little at an individual farm level and have no real impact on the financial crisis dairy farms are facing this autumn and winter.

It’s also worth remembering that this isn’t new money, but funds collected from dairy farmers through superlevies in the final year of the quota regime. It’s just over half the amount collected, and the only way this represents ‘new money’ is that it would normally not have been retained in agriculture, but would have gone to the general EU budget.

Beyond the headline €500m package the rest was equally disappointing. Aid for the Baltic states hit by the Russian import ban was always going to happen; so too was support to encourage exports and tackle countries with tariff barriers against EU products. Extra storage aid for dairy products and pigmeat was also predictable, but in general terms the scale of the crisis and that fact that many other sectors are suffering financial problems were ignored.

The Commission would argue that bringing forward from December to October the date when CAP payments can begin will help, but that’s irrelevant in any of the UK regions. There were sweeteners, including a commitment to look at unfairness along the food supply chain – but this was not a promise to act, but only to create another Brussels committee.

It was unfortunate that illness prevented the farm commissioner, Phil Hogan, being at the meeting. He might have brought more commitment than his fellow commissioner reading out a prepared text. This added to the sense of anticlimax about the emergency farm council and even the protest, despite the passion behind it. It was no surprise the Commission rejected any moves on dairy intervention, given how hard they were briefing against this before the meeting.

Even a commitment to review intervention would have helped put a floor in the market. But the Commission’s stance was as hostile as it has been all along and there was no weakening at the farm council. This is because to concede a review would be to concede the case for action – and that would involve admitting Brussels has failed to deliver the soft landing promised from the milk quota era. Face saved for the Commission; farming families let down – a predictable, but nonetheless disappointing outcome.

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