Covid-19, European Commission announces measures to support agriculture and food supply chain

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Covid-19. On 4/22/20, the European Commission announced 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’s proposal

Support measures presented in Brussels on 4/22/20, in brief to follow.

Private storage, aid in the dairy (on skimmed milk powder, butter, cheese) and meat (beef, sheep and goat) sectors. So that production quotas can be withdrawn from the market for a period ranging from 2-3 months to 5-6 months. Thus reducing the available supply, with a view to rebalancing the market over the medium to long term.

Self-organization of milk, flower and potato markets. Notwithstanding the free competition rules established in the Common Market Organization, these sectors may take collective measures to stabilize the market. Dairy can thus collectively plan milk production, potatoes and floriculture products can be withdrawn from the market in concert.

Support programs for wine, olive oils, beekeeping-as well as fruit and vegetables and milk, as far as their administration in schools is concerned-are subject to flexibility in implementation. So that funding can be redirected on crisis management measures, including to other sectors.

Crisis management as an exception to free competition

The program of measures under consideration intervenes as a derogation from the principle of free competition that the Treaty on the Functioning of the European Union (TFEU), in Article 101, sets as the basis of the internal market. (2)

During periods of severe imbalance in the markets., the Commission may adopt implementing acts to ensure that Article 101(1) TFEU does not apply to agreements and decisions by farmers, associations of farmers 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 solely at stabilizing the sector concerned, and fall into one or more of the following categories:

(a) market withdrawal or free distribution of their products,

(b) processing and treatment,

(c) storage by private operators,

(d) joint promotion measures,

(e) Agreements on quality requirements,

(f) joint purchase of the means of production necessary to combat the spread of animal and plant pests and diseases in the Union or 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 may be taken–for a period of up to six months–following agreement by the Commission with member states meeting in the Common Market Organization Committee. (3) Only after the decision can the details be known.

The Commission in any case has a responsibility to monitor consumer prices so that measures taken to rescue operators do not adversely affect end consumers.

Other European measures to support agriculture and rural development in era Covid-19

The first measures taken by the European Commission to support agriculture and rural development in Covid-19 era are as follows:

loans or guarantees for operating costs, up to 200 thousand euros, on favorable terms,

Advances on CAP (Common Agricultural Policy) payments. Only as of 15.10.20 (!) do farms surviving the crisis receive higher advances of direct payments (from 50% to 70%) and some rural development payments (from 75% to 85%) from Brussels. Peanuts to disburse late, relative to the legitimate demands of the industry,

STATE AID. Member states may grant de minimis aid of €20,000 (€25,000 in specific cases) to agricultural enterprises in addition to the state aid already allowed (€100,000 per farm).

Peanuts, peanuts, are thus offered by the European Commission (on the cover, Agriculture Commissioner Janusz Wojciechowski) to a sector that is crucial to the physical and economic livelihood of European citizens. In a short-sighted policy unfortunately destined to revive anti-Europeanism instead of agricultural enterprises.

Dario Dongo

Notes

(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 prohibits ‘‘all agreements between undertakings, all decisions by associations of undertakings and all concerted practices which may affect trade between member states and which have as their object or effect the prevention, restriction or distortion of competition within the internal market’. Agreements aimed at:

‘a) directly or indirectly fix purchase or sale prices or other transaction conditions,

(b) restrict or control production, outlets, technical development or investment,

(c) allocate markets or sources of supply,

(d) apply dissimilar conditions for equivalent services in business dealings with other contractors, so as to result in a competitive disadvantage for the latter,

(e) make the conclusion of contracts subject to the acceptance by the other contractors of additional services, which, by their nature or according to commercial usage, have no connection with the subject matter of the contracts.” (TFEU 101.1)

(3) Reg. EU 1308/2013, establishing a common organization of the markets in agricultural products, so-called CMO (Common Market Organization) or CMO, Article 222

(4) Committee for the Common Organization of Agricultural Markets. Cf. reg. EU 182/2011

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Dario Dongo, lawyer and journalist, PhD in international food law, founder of WIISE (FARE - GIFT - Food Times) and Égalité.