COVID-19. On 22.4.20 the European Commission announces new measures to support agriculture and the food supply chain, in the sectors most affected by the emergency. (1) Peanuts unfortunately.
Support measures, the Commission proposal
Support measures presented in Brussels on 22.4.20, shortly to follow.
Private storage, aid in the dairy sectors (on skimmed milk powder, butter, cheese) and in the meat (beef, sheep and goat) sectors. In order to allow the withdrawal from the market of production quotas, for a variable period between 2-3 months and 5-6 months. Thus reducing the supply available, in view of a market rebalancing in the medium to long term.
Market self-organization of milk, floriculture and potatoes. Notwithstanding the rules on free competition established in the Common Organization of Markets, these sectors may adopt collective measures aimed at stabilizing the market. The dairy can thus collectively plan the production of milk, potatoes and floricultural products can be withdrawn from the market together.
Support programs wine, olive oils, beekeeping - as well as fruit and vegetables and milk, as regards their administration in schools - are subject to flexibility of implementation. So that funding can be redirected to crisis management measures, including in favor of other sectors.
Crisis management in derogation of free competition
The program of interventions in question intervenes in derogation of the principle of free competition that the Treaty for the Functioning of the European Union (TFEU), in article 101, places at the basis of the internal market. (2)
'During times of severe market imbalance, the Commission may adopt implementing acts to ensure that Article 101 (1) TFEU does not apply to agreements and decisions of farmers, farmers' associations or associations of such associations, or recognized producer organizations, associations of recognized producer organizations and recognized interbranch organizations [...]
to the extent that such agreements and decisions do not undermine the proper functioning of the internal market, are aimed exclusively at stabilizing the sector concerned and fall into one or more of the following categories:
a) withdrawal from the market or free distribution of their products,
b) transformation and treatment,
c) storage by private operators,
d) common promotional measures,
e) agreements on quality requirements,
(f) joint purchase of the means of production necessary to combat the spread of pests and diseases of animals and plants in the Union or of those necessary to cope with the consequences of natural disasters in the Union,
g) temporary production planning, taking into account the specific nature of the production cycle [...]. ' (2)
Implementation of the program
Measures they may be adopted - for a maximum period of six months - following the agreement of the Commission with the Member States, meeting in the Committee for the common organization of the markets. (3) Only after the decision will it be possible to know the details.
The Commission in any case, it is responsible for monitoring consumer prices, so that the measures adopted to rescue operators do not have a negative impact on final consumers.
Other European measures to support agriculture and rural development in the Covid-19 era
The first measures adopted by the European Commission in support of agriculture and rural development in the Covid-19 era are structured as follows:
- loans or guarantees for operating costs, up to 200 thousand euros, at favorable conditions,
- advances on CAP payments (Common Agricultural Policy). Only starting from 15.10.20 (!) Do agricultural businesses that survive the crisis receive from Brussels higher advances of direct payments (from 50% to 70%) and some payments for rural development (from 75% to 85%) . Peanuts to be dispensed late, compared to the legitimate ones industry demands,
- state aid. Member States may grant aid to agricultural businesses de minimis, to the extent of € 20.000 (25.000 in specific cases), additional to the state aid already allowed (€ 100.000 per company).
Peanuts, peanuts, are thus offered by the European Commission (on the cover the Commissioner for Agriculture, Janusz Wojciechowski) to a crucial sector for the physical and economic subsistence of European citizens. In a short-sighted policy unfortunately destined to revive anti-Europeanism rather than agricultural enterprises.
Footnotes to the story
(1) European Commission. Supporting the agriculture and food sectors amid Coronavirus. https://ec.europa.eu/info/food-farming-fisheries/farming/coronavirus-response_en
(2) The Treaty for the Functioning of the European Union (TFEU) declares incompatible with the internal market and therefore prohibitsall agreements between undertakings, all decisions by associations of undertakings and all concerted practices which may affect trade between Member States and which have the object or effect of preventing, restricting or distorting competition within the internal market '. In principle, agreements aimed at:
'a) directly or indirectly fix purchase or sale prices or other transaction conditions,
b) limit or control production, outlets, technical development or investments,
c) share markets or sources of supply,
d) apply, in commercial relations with other contracting parties, dissimilar conditions for equivalent services, so as to determine a disadvantage in competition for the latter,
e) make the conclusion of contracts subject to the acceptance by the other contracting parties of supplementary services which, by their nature or according to commercial usage, have no connection with the subject of the contracts. ' (TFEU 101.1)
(3) EU Reg. 1308/2013, establishing a common organization of the markets in agricultural products, the so-called OCM (Common Organization of Markets) or CMO (Common Market Organisation), article 222
(4) Committee for the common organization of agricultural markets. See reg. UE 182/2011