REPORT on the proposal for a regulation of the European Parliament and of the Council establishing a facility for rapid response to soaring food prices in developing countries

31.10.2008 - (COM(2008)0450 – C6‑0280/2008 – 2008/0149(COD)) - ***I

Committee on Development
Rapporteur: Gay Mitchell
Rapporteurs for opinion (*):
Reimer Böge, Committee on Budgets
Stéphane Le Foll, Committee on Agriculture and Rural Development
(*) Associated committees – Rule 47 of the Rules of Procedure

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

on the proposal for a regulation of the European Parliament and of the Council establishing a facility for rapid response to soaring food prices in developing countries

(COM(2008)0450 – C6‑0280/2008 – 2008/0149(COD))

(Codecision procedure: first reading)

The European Parliament,

–    having regard to the Commission proposal to the European Parliament and the Council (COM(2008)0450),

–    having regard to Article 251(2) and Article 179(1) of the EC Treaty, pursuant to which the Commission submitted the proposal to Parliament (C6‑0280/2008),

–    having regard to Rule 51 of its Rules of Procedure,

–    having regard to the report of the Committee on Development and the opinions of the Committee on Budgets and the Committee on Agriculture and Rural Development (A6‑0396/2008),

1.   Approves the Commission proposal as amended;

2.   Considers that the reference amount indicated in the legislative proposal is not compatible with the ceiling of heading 4 of the multi-annual financial framework (MFF) without adjusting the ceiling according to the provisions laid down in the Interinstitutional Agreement between the European Parliament, the Council and the Commission, of 17 May 2006, on budgetary discipline and sound financial management[1] (IIA); considers that the financing of this facility instrument should not jeopardise the financing of other priorities and current commitments of the EU;

3.   Stresses that the provisions of Point 14 of the IIA shall be applied in the event that the legislative authority decides in favour of the adoption of the legislative proposal; stresses that Parliament will enter into negotiations with the other arm of the budgetary authority with a view to reaching a timely agreement on the financing of this facility instrument;

4.   Considers that, in the course of these negotiations, the two branches of the budgetary authority should examine all possibilities of financing, including the extension of the Emergency Aid Reserve; considers that this total financing must not exceed EUR 1 billion;

5.   Instructs its President to forward its position to the Council and Commission.

Amendment  1 Proposal for a regulation Recital 1
Text proposed by the Commission	Amendment
(1) The recent soaring of Food Prices has put numerous developing countries and their populations in a dramatic situation. This risks putting additional hundreds of millions of people in extreme poverty and calls for increased solidarity with those populations.	(1) The recent soaring of Food Prices, which was predictable given the supply and demand situation relating to global agricultural produce and food markets, has put numerous developing countries and their populations in a dramatic situation. This food crisis, accompanied by a financial and energy crisis and environmental deterioration (including global warming, water scarcity, loss of biodiversity), risks putting additional hundreds of millions of people in extreme poverty and calls for increased solidarity with those populations. All the data on the outlook for food markets lead to the conclusion that this food crisis affecting the most deprived populations in both the South and the North of the world will persist over the coming years.
Justification
La crise alimentaire que nous vivons n'est pas un accident. Nous avons une idée de l'évolution future de l'offre et de la demande mondiale en produits agricoles et alimentaires. D'ici 2050 il y aura 3 milliards d'habitants en plus sur la planète. Il faudra produire deux fois plus et mieux en valorisant plus efficacement l'ensemble des ressources et en préservant davantage les écosystèmes et les équilibres naturels. Il conviendra aussi d'assurer une certaine régulation de l'économie agricole afin d'éviter les catastrophes alimentaires et les trop grands risques de spéculations sur les marchés de l'alimentation.
Amendment  2 Proposal for a regulation Recital 1 a (new)
Text proposed by the Commission	Amendment
	(1a) At its last intergovernmental plenary session in Johannesburg, South Africa, in April 2008 the International Assessment of Agricultural Knowledge, Science and Technology for Development (IAASTD) has adopted a synthesis report on sustainable global agriculture,
Amendment  3 Proposal for a regulation Recital 2
Text proposed by the Commission	Amendment
(2) A financing facility for a rapid response to the crisis caused by high food prices in developing countries should therefore be established by this Regulation.	(2) Alongside the European Union’s current development policy, which has for too long neglected to support the agricultural sector, and food production in particular, a financing facility for a rapid response to the crisis caused by high food prices in developing countries should therefore be established by this Regulation.
Justification
La crise alimentaire révèle au grand jour les carences des politiques de développement engagées avec les pays les plus pauvres. L'aide à l'agriculture se situe autour de 4% de l'aide au développement, alors que ce secteur reste la base de tout développement puisqu'il permet de répondre aux besoins les plus élémentaires de population souffrant de malnutrition. Dans ces régions la majorité des populations vivent en zones rurales, la majorité des mal nourris sont d'abord des agriculteurs pauvres qui ont un accès difficile aux ressources (terre, eau, énergie, engrais semences, microcrédits, services, etc.) pour produire et nourrir leurs populations. Nos politiques de développement l'ont un peu vite oublié.
Amendment  4 Proposal for a regulation Recital 3
Text proposed by the Commission	Amendment
(3) The European Consensus on Development, adopted by the Council and the Representatives of the Governments of the Member States meeting within the Council, the European Parliament and the Commission on 22 November 2005, states that the European Community (hereafter "The Community") will continue to work to improve food security at international, regional and national level, to which goal this Regulation should contribute.	(3) The European Consensus on Development, adopted by the Council and the Representatives of the Governments of the Member States meeting within the Council, the European Parliament and the Commission on 20 December 2005, states that the European Community (hereafter "The Community") will continue to work to improve food security at international, regional and national level, to which goal this Regulation should contribute.
Justification
Corrects the date of signature of the Consensus on Development.
Amendment  5 Proposal for a regulation Recital 4
Text proposed by the Commission	Amendment
(4) The European Parliament adopted on 22 May 2008 a resolution on rising food prices in the EU and the developing countries, urging the Council to ensure coherence of all food-related national and international policies aiming at implementing the right to food of populations.	(4) The European Parliament adopted on 22 May 2008 a resolution on rising food prices in the EU and the developing countries, urging the Council to ensure coherence of all food-related national and international policies aiming at implementing the right to food.
Justification
This amendment brings the text into line with the content of the European Parliament Resolution, which does not refer to the right to food in the collective sense.
Amendment  6 Proposal for a regulation Recital 5
Text proposed by the Commission	Amendment
(5) The European Council meeting on 20 June 2008, concluded that action is required from the European Union from a development and humanitarian perspective. In addition it was stated that the European Union will mobilise resources to finance, beyond food aid, safety nets for poor and vulnerable population groups, that the EU will support a strong agricultural supply response in developing countries, providing in particular the necessary financing for agricultural inputs and assistance in using market-based risk management instrument and welcomed the Commission's intention to come forward with a proposal for a new fund to support agriculture in developing countries, within the current financial framework.	(5) The European Council meeting on 20 June 2008 concluded that action is required from the European Union from a development and humanitarian perspective. In addition it was stated that, in order to fully support progress towards the achievement of all Millennium Development Goals (MDGs), the European Union will mobilise resources to finance, beyond food aid, safety nets for poor and vulnerable population groups, that the EU will support a strong agricultural supply response in developing countries, providing in particular the necessary financing for agricultural inputs and assistance in using market-based risk management instrument and welcomed the Commission's intention to come forward with a proposal for a new fund to support agriculture in developing countries, within the current financial framework.
Amendment  7 Proposal for a regulation Recital 5 a (new)
Text proposed by the Commission	Amendment
	(5a) During its meeting of 20 June 2008, the European Council strongly reaffirmed its commitment to achieving a collective ODA (Official Development Assistance)-target of 0,56% Gross National Income (GNI) by 2010 and 0,7% GNI by 2015, as set out in the Council conclusions of 24 May 2005, the European Council conclusions of 16 and 17 June 2005 and the European Consensus on Development. Such commitments clearly make a multi-annual budget programming of EU development aid necessary.
Amendment  8 Proposal for a regulation Recital 5b (new)
Text proposed by the Commission	Amendment
	(5b) Acknowledging in its conclusions of 20 June 2008 that high food prices were affecting the situation of the world’s poorest populations and putting at risk progress towards the achievement of all MDGs, the European Council adopted an EU Agenda for Action on MDGs which states that the EU is committed, in line with the Food and Agriculture Organisation (FAO) Conference Declaration, to promote a global partnership for food and agriculture and wishes to play a substantial role in helping to bridge part of the financing gap by 2010 in the areas of agriculture, food security and rural development.
Justification
This Council text is particularly relevant for the objectives of this Regulation and should therefore be mentioned in a recital.
Amendment  9 Proposal for a regulation Recital 7
Text proposed by the Commission	Amendment
(7) Financial needs to fully address the immediate consequences of the high food prices are very high. The response should come from the international community in its entirety and the Community is endeavoured to contribute its fair share.	(7) Financial and material needs to fully address the immediate consequences of the high food prices are very high. The response should come from the international community in its entirety and the Community is endeavoured to contribute its fair share.
Justification
The most adequate and effective response to the present food crisis is to increase food aid to developing countries.
Amendment  10 Proposal for a regulation Recital 8
Text proposed by the Commission	Amendment
(8) The same conditions which lead to the need for the present financing facility (the high food prices), also lead to lower agriculture market expenditure under Heading 2 of the Financial Framework. Current estimates also indicate a significant unallocated margin under the ceiling of Heading 2 in 2009.	(8) The same conditions which jeopardise the very right to food in developing countries and lead to the need for the present financing facility (the high food prices), also lead to lower agriculture market expenditure under Heading 2 of the Multiannual Financial Framework (MFF). Current estimates also indicate a significant unallocated margin under the ceiling of Heading 2 in 2009. According to the principle of specificity, the actions provided for in this Regulation aim at strengthening cooperation with developing countries. The expenditure required to cover these actions should therefore be financed under Heading 4 of the MFF: "The EU as a global partner".
Amendment  11 Proposal for a regulation Recital 8 a (new)
Text proposed by the Commission	Amendment
	(8a) The Interinstitutional Agreement of 17 May 2006 between the European Parliament, the Council and the Commission on budgetary discipline and sound financial management1 (IIA) contains the appropriate instruments, especially those in point 23, for the adjustment of ceilings between various headings of the MFF.
	1 OJ C 139, 14.6.2006, p. 1
Amendment  12 Proposal for a regulation Recital 11
Text proposed by the Commission	Amendment
(11) Those instruments, however, have already been mobilised or re-programmed in 2008 to the fullest possible extent to address the negative effects of the high food prices situation in developing countries. To a very limited extent the same could be done in 2009; however, that would be far from being sufficient to respond to the needs.	(11) Those instruments, however, have already been mobilised or re-programmed in 2008 to the fullest possible extent to address the negative effects of the high food prices situation in developing countries. To a very limited extent the same could be done in 2009; however, that would be far from being sufficient to respond to the needs. Faced with the current world food supply shortage and the steep increase in prices, which could continue in the years to come, the development assistance instruments financed under Heading 4 of the Multiannual Financial Framework should be strengthened, without this jeopardising the EU’s agricultural interests.
Amendment  13 Proposal for a regulation Recital 13
Text proposed by the Commission	Amendment
(13) It is however necessary to protect the interest of the European farmers and to guarantee that this proposal will not under any circumstances trigger the mechanism of the financial discipline as provided in Council Regulations (EC) No 1782/2003 and (EC) No 1290/2005.	(13) It is however necessary to protect the interest of the European farmers, who are also suffering considerably from increased production costs in both the agricultural production and the fisheries sector, and to guarantee that this proposal will not under any circumstances trigger the mechanism of the financial discipline as provided in Council Regulations (EC) No 1782/2003 and (EC) No 1290/2005.
Justification
‘Soft landing’, accompanying measures for restructurings and other new challenges such as higher production costs resulting from higher energy prices need equal attention.
Amendment  14 Proposal for a regulation Recital 13 a (new)
Text proposed by the Commission	Amendment
	(13a) In accordance with Article 276 of the EC Treaty, the implementation of the financing facility for the food crisis is subject to the annual discharge procedure.
Amendment  15 Proposal for a regulation Recital 13 b (new)
Text proposed by the Commission	Amendment
	(13b)The new development assistance should be managed in such a way as to guarantee the supply of foodstuffs to local populations and to avoid encouraging the appearance of agriculture geared solely to the export of raw materials to developed countries, which would run counter to the objectives pursued by this measure by omitting to attend to local needs and engendering the risk of unfair competition with European products.
Amendment  16 Proposal for a regulation Recital 14
Text proposed by the Commission	Amendment
(14) As a consequence, it is necessary to adopt a specific financing facility, complementary to existing development instruments and the Humanitarian Aid Instrument, to adopt urgent and supplementary measures that address rapidly the consequences in developing countries of the present soaring food prices situation.	(14) As a consequence, it is necessary to adopt a specific financing facility, complementary to existing external financing instruments, to adopt urgent and supplementary measures that address rapidly the consequences in developing countries of the present soaring food prices situation.
Justification
Only the Financing Instrument for Development Cooperation (DCI) limits its application to development actions. It is clearer to refer to all instruments as "external financing instruments", which includes the Humanitarian Aid Instrument.
Amendment  17 Proposal for a regulation Recital 14 a (new)
Text proposed by the Commission	Amendment
	(14a) The results of the joint use of the financing facility for the food crisis and existing programmes in accordance with these objectives should be regularly evaluated in order to monitor the structuring of developing countries’ agricultural production apparatuses over the long term.
Amendment  18 Proposal for a regulation Recital 15
Text proposed by the Commission	Amendment
(15) The measures adopted with this facility should help developing countries to boost agricultural productivity in the next seasons, to respond rapidly to immediate needs of the countries and their population and to take initial steps needed to prevent as far as possible further food insecurity situations, and also contribute to mitigating the effects of the high food prices globally, to the benefit of the poorest people but also of the European consumers and farmers.	(15) The measures adopted with this facility should help developing countries to boost agricultural productivity in the next seasons, to respond rapidly to immediate needs of the countries and their population and to take initial steps needed to prevent as far as possible further food insecurity situations, and also contribute to mitigating the effects of the high food prices globally, to the benefit of the poorest people, of small-holder farmers, and also of the European consumers and farmers. Community assistance should be made dependent on fulfilment of certain minimum environmental conditions and compliance with the basic Conventions of the International Labour Organisation (ILO).
Justification
The European Union should encourage poor countries to comply with certain relevant environmental and labour standards. The Commission proposal completely overlooks these aspects, which are nowadays such a vital part of the various European policies.
Amendment  19 Proposal for a regulation Recital 15 a (new)
Text proposed by the Commission	Amendment
	(15a) The financing facility for the food crisis should focus on microcredit facilitation for small agricultural producers in the developing countries affected by the crisis. This microcredit facility should be developed by analogy with existing instruments (Financing Instrument for Development Cooperation (DCI) and European Development Fund (EDF)).
Amendment  20 Proposal for a regulation Recital 16
Text proposed by the Commission	Amendment
(16) The very nature of measures provided for under this Regulation calls for the establishment of efficient, flexible, transparent and rapid decision-making procedures for their financing, with a strong cooperation between all Institutions concerned. This Regulation should in particular allow for the financing of measures already initiated that International Organisations are supporting or ready to support before the adoption of this Regulation, as from 20 June 2008, corresponding to the date of the European Council Conclusions.	(16) The very nature of measures provided for under this Regulation calls for the establishment of efficient, flexible, transparent and rapid decision-making procedures for their financing, with a strong cooperation between all Institutions concerned. This Regulation should, inter alia, allow for the financing of measures already initiated before the adoption of this Regulation, as from the date set by a European Parliament decision.
Justification
Methods for aid delivery should not be limited to financing international or regional organisations as other means may be more suited to the particular circumstances of eligible countries.
Amendment   21 Proposal for a regulation Recital 16 a (new)
Text proposed by the Commission	Amendment
	(16a) A distinction must be made between short-term measures aimed at providing a ‘safety net’ for populations most directly and seriously affected by the soaring food prices, and more structural measures aimed at boosting production of food crops in developing countries with a view to preventing the recurrence of the current food crisis.
Justification
It is important to distinguish between actions of an immediate, short-term nature, such as the creation of social safety-nets to mitigate the negative effects of food prices for those whose access to food is compromised, and more structural actions seeking to provide a more sustainable solution to the crisis.
Amendment  22 Proposal for a regulation Recital 16 b (new)
Text proposed by the Commission	Amendment
	(16b) The financing of this regulation via international organisations should not hinder the budgetary control, effectiveness and visibility of EU spending.
Amendment  23 Proposal for a regulation Recital 18 a (new)
Text proposed by the Commission	Amendment
	(18a) The measures necessary for the implementation of this Regulation should be adopted in accordance with Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission*.
	________________ *OJ C 255, 21.10.2006, p.4
Justification
This new recital explains the need to include comitology provisions in the legal text.
Amendment  24 Proposal for a regulation Recital 18 b (new)
Text proposed by the Commission	Amendment
	(18b). This Regulation should also be followed by a long-term strategy for the target countries and a review of actions financed under this Regulation should be carried out in the following years.
Amendment   25 Proposal for a regulation Recital 18 c (new)
Text proposed by the Commission	Amendment
	(18c) The different development instruments and this Facility shall be applied so as to ensure continuity of cooperation, in particular as regards the transition from emergency to medium- and long-term response. From now on all development tools shall allocate a larger share to agriculture and agricultural production, without which a country cannot achieve sustainable development, a priority objective of which is to supply sufficient food to its population.
Justification
Un pays ne peut se développer quand il ne parvient pas à nourrir sa population. Dans le contexte de crise alimentaire dans lequel nous sommes l’urgence est donc bien d'augmenter durablement l'aide à l’agriculture trop longtemps négligée des politiques de coopération développement. Rappelons simplement que la majorité des populations des pays pauvres vivent dans les campagnes, que l’alimentation représente plus de 50% des dépenses des ménages, que les plus mal-nourris sont souvent des agriculteurs pauvres qui ne parviennent pas à produire faute de moyens suffisants, leur permettant d’accéder aux ressources (terre, eau, engrais, semences, services, crédits, etc.)
Amendment  26 Proposal for a regulation Recital 18 d (new)
	(18d) The European Parliament shall have the final say on expenditure.
Amendment  27 Proposal for a regulation Article 1 - paragraph 2 - subparagraph 2
Text proposed by the Commission	Amendment
The Commission shall adopt the measures referred to in paragraph 1. They shall finance international initiatives supporting the purpose and objectives of this Regulation and which are implemented through regional and global International Organisations. It shall inform the European Parliament and the Council thereof.	The measures referred to in paragraph 1 shall be adopted by the Commission in accordance with the procedure referred to in Article 10a(2). They shall finance initiatives supporting the purpose and objectives of this Regulation.
Justification
Introduces a comitology procedure for decision-making, which automatically gives Parliament the right to full information. Also removes the requirement for implementation to pass exclusively through regional and global international organisations as different delivery mechanisms may be more appropriate for the particular conditions of eligible countries.
Amendment  28 Proposal for a regulation Article 1 – paragraph 2 a (new)
Text proposed by the Commission	Amendment
	2a. Regardless of which bodies are chosen under the procedure referred to in paragraph 2 of Article 10a to establish the financing facility for the food crisis - whether international and regional organisations or other institutions - it shall be absolutely essential that the action programmes on agricultural growth be drawn up together with farmers’ organisations, producers' organisations and their NGO partners, and that those organisations are involved in monitoring and following up the implementation of these programmes.
Justification
The agricultural sector is the main source of employment and revenue for a large majority of the population. Taking West Africa as an example, some 142 million people - around 60% of the population - live in rural areas and are basically dependent on agricultural activities.
Amendment  29 Proposal for a regulation Article 1 - paragraph 3
Text proposed by the Commission	Amendment
3. Such measures will specify a list of target countries identified on the basis of the set of criteria laid down in the Annex, building on information, including on actual country needs, made available, in particular through its delegations and through internationally relevant evaluations made by organisations such as those of the UN system.	3. To optimise the utility and impact of this Regulation, resources shall be concentrated on a maximum of 35 high-priority target countries; target countries shall be identified on the basis of the set of criteria laid down in the Annex, and in coordination with other donors, building on relevant needs-assessment made available by specialist and international organisations, such as those of the UN system, including the World Bank.
Justification
Allows the use of evaluations made by organisations specialised in analysing the food and agricultural sectors of developing countries.
Amendment  30 Proposal for a regulation Article 1 – paragraph 3 a (new)
Text proposed by the Commission	Amendment
	3a. Wherever feasible, NGO involvement shall be guaranteed in the projects carried out by all international organisations.
Amendment  31 Proposal for a regulation Article 1 - paragraph 4
Text proposed by the Commission	Amendment
4. To ensure the coherence and effectiveness of Community assistance, where the programme to be implemented is of regional or cross-border nature, the Commission may decide that populations of other developing countries not belonging to that region can benefit from the programme in question.	4. To ensure the coherence and effectiveness of Community assistance, where the programme to be implemented is of regional or cross-border nature, the Commission may decide, in accordance with the procedure referred to in Article 10a(2), that populations of other developing countries not belonging to that region can benefit from the programme in question.
Justification
Allows for decision-making to be carried out using the appropriate comitology procedure.
Amendment  32 Proposal for a regulation Article 1 - paragraph 5
Text proposed by the Commission	Amendment
5. International Organisations, including Regional Organisations (hereafter "International Organisations") will be selected on the basis of their capacity to deliver a speedy and high quality response to the specific needs of the targeted Developing Countries in relation to the objectives of this Regulation.	5. Where support is to be provided for measures implemented by International Organisations including Regional Organisations,(hereafter "International Organisations"), such international organisations will be selected by the Commission in accordance with the procedure referred to in Article 10a(2) and on the basis of their capacity to deliver a speedy and high quality response to the specific needs of the targeted Developing Countries in relation to the objectives of this Regulation. In addition, such distributive organisations will be selected based on their ability to effectively and efficiently distribute funds with the minimum of administrative bureaucracy.
Justification
Removes the requirement for implementation to pass exclusively through regional and global international organisations and ensures decisions on choices of any such organisations pass through the comitology procedure.
Amendment  33 Proposal for a regulation Article 2 - paragraph 1
Text proposed by the Commission	Amendment
1. The primary objectives of the assistance and cooperation under this Regulation shall be to encourage a positive supply response of agricultural sector in target countries and regions in the context of their sustainable development and to support activities to respond rapidly and directly to mitigate the negative effects of high food prices in line with food security objectives.	1. The primary objective of the assistance and cooperation under this Regulation shall be to respond to soaring food prices in the short to medium term by:
	a) encouraging a positive supply response from the agricultural sector, including small-holder farmers, with a sustainable increase in agricultural productivity in target countries and regions in the context of their overall development in the medium term;
	b) supporting activities to respond rapidly and directly, and in the short term, to the food needs of local populations to mitigate the negative effects of high food prices in line with food security objectives and UN standards for nutritional requirements. .
Justification
Clarifies the main objective of the Regulation and establishes the distinction between short- and medium-term objectives.
Amendment  34 Proposal for a regulation Article 2 – paragraph 2 a (new)
Text proposed by the Commission	Amendment
	2a. Existing programmes and projects shall be scrutinised in advance, on the assumption that only properly inspected, future-oriented projects that sustainably serve small farmers and rural structures will receive additional support, in which process the use of resources must be optimised and deadweight effects avoided.
Amendment  35 Proposal for a regulation Article 2 - paragraph 3 - subparagraph 1
Text proposed by the Commission	Amendment
3. Notwithstanding Regulation (EC) No 1905/2006 of the European Parliament and of the Council, and Regulation (EC) No 1717/2006 of the European Parliament and of the Council, if the envisaged measures are in accordance with Articles 1(1) and 3.2 of this Regulation, they shall be financed under this Regulation.	deleted
Justification
The text compromises the additionality of financing under the Regulation by preventing support from other instruments for measures in line with the objectives of this Regulation. A financial allocation of EUR 50 million has been programmed for similar measures in 2008 under the Food Security Thematic Programme of DCI and this should not be prejudiced by the entry into force of this Regulation. The reference to the external instruments has been transferred to Article 2(3) 2nd subparagraph with the addition of the Cotonou Agreement.
It is important for the Commission to provide specific details about the use of the € 1 billion by submitting a forward plan, which should be adopted using the committee procedure, allowing Parliament to be informed. The plan will then enable the facility to be evaluated.
Amendment  36 Proposal for a regulation Article 2 - paragraph 3 - subparagraph 2
Text proposed by the Commission	Amendment
The different development instruments and this Facility shall be applied so as to ensure continuity of cooperation, in particular as regards the transition from emergency to medium- and long-term response.	3. Measures supported under this Regulation shall be coordinated with those supported under other instruments, including Council Regulation (EC) No 1257/96 of 20 June 1996 concerning humanitarian aid*, Regulation (EC) No 1905/2006 of the European Parliament and of the Council of 18 December 2006 establishing a financing instrument for development cooperation**, and Regulation (EC) No 1717/2006 of the European Parliament and of the Council of 15 November 2006 establishing an instrument for stability***, and the ACP-EU Partnership Agreement****, so as to ensure continuity of cooperation, in particular as regards the transition from emergency to medium- and long-term response.
	___________ *OJ L 163, 2.7.1996, p. 1. **OJ L 378, 27.12.2006, p. 41. ***OJ L 327, 24.11.2006, p. 1. ****Partnership Agreement between the Members of the African, Caribbean and Pacific Group of States, of the one part, and the European Community and its Member States, of the other part, signed in Cotonou on 23 June 2000 (OJ L 317, 15.12.2000, p. 13).
Justification
Prevents inconsistencies and undue duplication between this Regulation and other financing instruments applying to the same countries
Amendment  37 Proposal for a regulation Article 2 – paragraph 4
Text proposed by the Commission	Amendment
4. The Commission shall ensure that measures adopted under this Regulation are consistent with the Community's overall strategic policy framework for the eligible country or countries concerned.	4. The Commission shall ensure that measures adopted under this Regulation are consistent with the Community's overall strategic policy framework for the eligible country or countries concerned, and shall guarantee priority access for small-holder farmers.
Amendment  38 Proposal for a regulation Article 3 - paragraph 1
Text proposed by the Commission	Amendment
1. Community assistance and cooperation shall be implemented through a set of decisions to finance supporting measures as described in Article 1, paragraphs (1) (2) and (3) of this Regulation, which shall be adopted by the Commission.	1. Community assistance and cooperation shall be implemented through a set of decisions to finance supporting measures as described in Article 1, paragraphs (1) (2) and (3) of this Regulation, which shall be adopted by the Commission, in accordance with the procedure referred to in Article 10a(2). Before initiating the financing of this facility the Commission shall draw up a precise forward plan for the use thereof, detailing all the measures envisaged, together with quantified objectives, the share of financing allocated to each objective and the resources planned for administration of the facility.
	1 OJ L 184, 17.7.1999, p. 23.
Justification
Allows for decision-making to be carried out using the appropriate Comitology procedure.
Amendment  39 Proposal for a regulation Article 3 – paragraph 2 – point a
Text proposed by the Commission	Amendment
(a) measures to improve access to agricultural inputs and services, including fertilizers and seeds;	(a) measures to improve access in particular of small-scale and female farmers to locally adapted, sustainable agricultural inputs (tailored to the optimum use of local resources) and services (extension, vocational training), existing local markets and existing infrastructure, including fertilizers and seeds, as well as preferential measures to activate and involve local, regional and supra-regional producers in the developing countries; agricultural inputs and services must as far as possible be locally purchased, the negative impact of importing inputs and services on local producers and markets must be prevented and dumping excluded;
Amendment  40 Proposal for a regulation Article 3 – paragraph 2 – point b
Text proposed by the Commission	Amendment
(b) safety net measures aiming at maintaining or improving the agricultural productive capacity, and at addressing the basic food needs of the most vulnerable populations.	(b) safety net measures aiming at maintaining or improving the agricultural productive capacity, and at addressing the basic food needs of the most vulnerable populations such as food vouchers for school children; any cases of dumping and distortion of local production and markets must be prevented.
Amendment  41 Proposal for a regulation Article 3 – paragraph 2 – point b a (new)
Text proposed by the Commission	Amendment
	(ba) micro-credit facilities for small agricultural producers to boost production.
Amendment  42 Proposal for a regulation Article 3 – paragraph 2 a (new)
Text proposed by the Commission	Amendment
	2a. Assistance shall not be given to the production of raw materials for:
	- exotic or luxury goods (such as cocoa, tea, tobacco, coffee); or
	- biofuels.
Justification
The aim of this proposal is to address the food crisis in developing countries. Therefore assistance should be given to the production of staple foods.
Amendment  43 Proposal for a regulation Article 3 – paragraph 3
Text proposed by the Commission	Amendment
3. Support measures which meet the objectives of this Regulation may be financed up to a maximum of 1 % of the amount referred to in article 10(1).	3. Administrative support measures - including organising the involvement of farmers' organisations and NGOs - which meet the objectives of this Regulation may be financed up to a maximum of 2 % of the amount referred to in article 10(1).
Justification
The planned support measures may in particular seek to lend a more structural aspect to the operation, such as involving farmers' organisations or meetings with NGOs. It is therefore necessary to raise the funding possibilities from 1% to 2% of the amount referred to in Article 10(1).
Amendment  44 Proposal for a regulation Article 3 – paragraph 3 a (new)
Text proposed by the Commission	Amendment
	3a. Both the Commission and the European Parliament will rigorously scrutinise the disbursement of funds to the International Organisations, and the financial outlays of these Organisations in target countries, to ensure efficient and effective use of the European Union’s money to meet the goals stated above.
Amendment  45 Proposal for a regulation Article 4
Text proposed by the Commission	Amendment
Article 4 Eligibility	Article 4 Eligibility
The entities eligible for funding shall be International Organisations fulfilling the conditions laid down in Article 43 of Commission Regulation (EC, Euratom) No 2342/20021.	1. The entities eligible for funding shall be:
	(a) partner countries and regions, and their institutions;
	(b) decentralised bodies in the partner countries, such as municipalities, provinces, departments and regions;
	(c) joint bodies set up by the partner countries and regions with the Community;
	(d) international organisations, including regional organisations, UN bodies, departments and missions, international and regional financial institutions and development banks, insofar as their programmes contribute to the objectives of this Regulation;
	(e) Community institutions and bodies, but only for the purposes of implementing the support measures referred to in Article 3(3);
	(f) EU agencies;
	(g) the following entities and bodies of the Member States, partner countries and regions and any other third country complying with the rules on access to the Community's external assistance set out in Regulation (EC) No 1905/2006, insofar as they help to achieve the objectives of this Regulation:
	(i) public or parastatal bodies, local authorities and consortia or representative associations thereof;
	(ii) companies, firms and other private organisations and businesses;
	(iii) financial institutions that grant, promote and finance private investment in partner countries and regions;
	(iv) non-State actors operating on an independent and accountable basis;
	(v) natural persons;
	(vi) local and regional grassroots organisations, such as farmers' associations und agricultural cooperatives/producer groups.
	2. The bodies listed in paragraph 1(d) of this Article shall be eligible for a maximum of 40 % of the total financial reference amount specified in Article 10(1) of this Regulation.

Justification

In order to assist small farmers in particular and lay a stable foundation for sustainable food production, it is necessary to strengthen and support the local and regional grassroots organisations.

Amendment  46 Proposal for a regulation Article 4 a (new)
Text proposed by the Commission	Amendment
	Article 4a
	Types of financing
	1. Community financing may take the following forms:
	(a) projects and programmes;
	(b) budget support, especially sectoral budget support, if the partner country's management of public spending is sufficiently transparent, reliable and effective, and if the conditions for budget support set out in the relevant geographical financing instrument have been met;
	c) contributions to international or regional organisations and international funds managed by such organisations;
	(d) contributions to national funds set up by partner countries and regions to attract joint financing from a number of donors, or contributions to funds set up by one or more donors for the purpose of the joint implementation of projects;
	e) Co-financing with entities eligible for funding as defined in Article 4.
	f) funds made available to the European Investment Bank (EIB) or other financial intermediaries on the basis of Commission programmes for the purpose of providing loans (in particular to support investment in and development of the private sector), risk capital (in the form of subordinated or conditional loans) or other temporary minority holdings in business capital, and contributions to guarantee funds in accordance with Article 32 of Regulation 1905/2006, to the extent that the financial risk of the Community is limited to these funds.
Justification
Aid delivery should not be limited to international and regional organisations, since different methods may be better suited to the particular circumstances of certain countries or regions. The list of types of finance is drawn from DCI, but simplified to reflect the emergency nature of this Regulation.
Amendment  47 Proposal for a regulation Article 5 - paragraph 1a (new)
Text proposed by the Commission	Amendment
	1a. In the event of co-financing and in other duly justified cases, the Commission may entrust tasks of public authority, and in particular budget implementation tasks, to the bodies referred to in Article 54(2)(c) of Regulation (EC, Euratom) No 1605/2002.
Justification
Required by the widening of the choice of aid delivery methods available. Text taken from DCI.
Amendment  48 Proposal for a regulation Article 5 - paragraph 1b (new)
Text proposed by the Commission	Amendment
	1b. In the case of decentralised management, the Commission may decide to use the procurement or grant procedures of the beneficiary partner country or region after verifying that they respect the relevant criteria set out in Regulation (EC, Euratom) No 1605/2002, provided that the conditions set out in Regulation (EC) No 1905/2006 are met.
Justification
Required by the widening of the choice of aid delivery methods available. Text taken from DCI.
Amendment  49 Proposal for a regulation Article 5 – paragraph 3 a (new)
Text proposed by the Commission	Amendment
	3a. The measures financed under this Regulation shall be in line with the Paris Declaration on Aid Effectiveness. The reports referred to in Article 9 of this Regulation shall pay particular attention to this requirement.
Justification
All measures financed under this Regulation should be in line with the Paris Declaration on aid effectiveness, especially because it concerns a temporary facility. I should be ensured that the facility is contributing in an effective way to a sustainable improvement of the situation.
Amendment  50 Proposal for a regulation Article 6 - paragraph 1
Text proposed by the Commission	Amendment
1. Budget commitments shall be made on the basis of decisions taken by the Commission.	1. Budget commitments shall be made on the basis of decisions taken by the Commission, in accordance with Article 10a(2).
Justification
Allows for decision-making to be carried out using the appropriate comitology procedure.
Amendment  51 Proposal for a regulation Article 6 - paragraph 2
Text proposed by the Commission	Amendment
2. Measures adopted under this Regulation may finance as from 20 June 2008 ongoing activities initiated in target countries or by organisations referred to in Article 4, before the entry into force of this Regulation.	2. Measures adopted under this Regulation may finance as from the date set by a European Parliament decision ongoing activities initiated by entities eligible under Article 4, before the entry into force of this Regulation. In this case support granted in the framework of this Regulation shall be used as additional resources.
Justification
More appropriate language for the wider choice of aid delivery methods.
Amendment  52 Proposal for a regulation Article 7 - paragraph 2
Text proposed by the Commission	Amendment
2. Financial agreements shall contain provisions granting the Commission and the Court of Auditors access to the information required to perform their duties, if necessary on the spot, in accordance with the verification agreements concluded with the international organisations concerned.	2. Agreements shall expressly entitle the Commission and the Court of Auditors to perform audits, including document audits or on-the-spot audits of any contractor or subcontractor who has received Community funds. They shall also expressly authorise the Commission to carry out on-the-spot checks and inspections as provided for in Regulation (Euratom, EC) No 2185/96 of 11 November 1996 concerning on-the-spot checks and inspections carried out by the Commission in order to protect the European Communities' financial interests against fraud and other irregularities*. ___________ *OJ L 292, 15.11.1995, p. 2.
Justification
Replaces the text with language taken from DCI, more appropriate for the wider choice of aid delivery methods.
Amendment  53 Proposal for a regulation Article 7 - paragraph 2 a (new)
Text proposed by the Commission	Amendment
	2a. All contracts resulting from the implementation of assistance shall ensure the rights of the Commission and the Court of Auditors under paragraph 2 during and after the performance of the contracts.
Justification
Further text taken from DCI, required to fit in with the wider choice of aid delivery methods.
Amendment  54 Proposal for a regulation Article 8 a (new)
Text proposed by the Commission	Amendment
	Article 8a
	Monitoring and Evaluation
	1. The Commission shall monitor and review activities implemented under this Regulation, where appropriate by means of independent external evaluations, in order to ascertain whether the objectives have been met and enable it to formulate recommendations with a view to improving future operations. Proposals by the European Parliament or the Council for independent external evaluations will be taken into due account.
	2. The Commission shall send its evaluation reports to the European Parliament and to the committee referred to in Article 10a for information. Member States may request to discuss specific evaluations in the committee referred to in Article 10a.
	3. The Commission shall involve all relevant stakeholders, including non-State actors and local authorities, in the evaluation phase of the Community assistance provided under this Regulation.
Justification
All activities supported with Community finance should be subject to evaluation to assess their effectiveness. Text taken from DCI.
Amendment  55 Proposal for a regulation Article 9
Text proposed by the Commission	Amendment
Reporting	Reporting
The Commission shall inform the European Parliament and the Council on the measures it has adopted pursuant to this Regulation no later than 31 December 2009. The Commission shall provide them with a report on the implementation of the measures, including, as far as possible, on the main outcomes and impacts of the assistance provided under this Regulation, no later than 31 December 2012.	The Commission shall inform the European Parliament and the Council on the measures it has adopted pursuant to this Regulation no later than 31 December 2009. The Commission shall provide them with a report on the implementation of the measures, including, on the main outcomes and impacts of the assistance provided under this Regulation, no later than 31 December 2011. In September 2009 the Commission shall provide the European Parliament and the Council with an initial interim report on the measures undertaken to allow the content of the financing facility for the food crisis to be adapted to its objectives, as appropriate.
Justification
It is important for the Commission to provide the European Parliament and the Council with regular information about the progress and results of the facility. Therefore it is appropriate to draw up an initial mid-term report, followed by a detailed final evaluation in order to measure the real impact on the populations most affected by the food crisis.
Amendment  56 Proposal for a regulation Article 10
Text proposed by the Commission	Amendment
1. The total financial reference amount for the implementation of this Regulation over the period 2008-2009 shall be EUR 1.0 billion.	1. The total financial reference amount for the implementation of this Regulation over the period 2008-2009 shall be EUR 1 billion. This reference amount shall be financed under Heading 4 of the Multiannual Financial Framework.
2. For 2008, the reference amount shall be EUR 750 million	2. The annual amount shall be decided in the context of the annual budgetary procedure.
3. For 2009, the maximum reference amount shall be EUR 250 million.
4. The amount committed shall, for each year, leave a margin under heading 2 of the financial framework of at least EUR 600 million, based on the forecast of the most recent early warning system report as established in Regulation (EC) No 1290/2005. Should that not be the case for a particular year, the maximum amount which can be committed for that year pursuant to this Regulation shall be reduced in order to restore such a margin under heading 2.	3. In order to cover the needs flowing from the proposed Regulation, the Multiannual Financial Framework shall be adjusted by all means provided for in the Interinstitutional Agreement of 17 May 2006. Should part or the entirety of the appropriations be used from the available margin of Heading 2 of the Multiannual Financial Framework, a margin of at least EUR 600 million, based on the forecast of the most recent early warning system report as established in Regulation (EC) No 1290/2005, shall be left, for each year, under this heading. Should that not be the case for a particular year, the maximum amount which can be committed for that year pursuant to this Regulation shall be reduced in order to restore such a margin under Heading 2.
Amendment  57 Proposal for a regulation Article 10 a (new)
Text proposed by the Commission	Amendment
	Article 10a
	Committee
	1. The Commission shall be assisted by a committee.
	2. Where reference is made to this paragraph, Articles 4 and 7 of Decision 1999/468/EC shall apply, having regard to the provisions of Article 8 thereof. The period laid down in Article 4(3) of Decision 1999/468/EC shall be set at 10 working days for measures adopted in 2008 and 30 days for measures adopted in 2009.
	3. The committee shall adopt its rules of procedure.
Justification
Introduces the most appropriate comitology structure - the Management Committee, as normally used for external financing instruments, but foresees shortened deadlines for 2008 in view of the urgent nature of procedures for that year.
Amendment  58 Proposal for a regulation Annex
Text proposed by the Commission	Amendment
ANNEX Indicative list of criteria to select target countries	ANNEX List of criteria to select target countries and criteria for financial allocations per country
Indicative criteria to select target countries:	Criteria to select target countries:
- Food price inflation and its potential socio-economic and political impact:	- Food price inflation and its potential socio-economic and political impact:
· Level of food price inflation (in comparison to general inflation)	· Level of food price inflation (in comparison to general inflation)
· Reliance on food imports, including imports of food aid	· Reliance on net food imports, including imports of food aid
· Social vulnerability and political stability	· Social vulnerability and political stability
· Food production as a percentage of farm consumption	· Food production as a percentage of farm consumption
	· Agricultural production capacity
- Capacity of the potentially eligible country to respond and implement appropriate response measures	- Capacity of the potentially eligible country to respond and implement appropriate response measures
· Measures taken by Government, including supply side and trade measures	· Measures taken by Government, including supply side (such as enhancing infrastructure of rural areas) and trade measures
· Export earnings	· Export earnings
· Fiscal vulnerability	· Fiscal vulnerability
Account will also be taken of other sources of financing available to the target country, at short term, from the donor community, to respond to the Food crisis, and of the potential of the country to increase agricultural production, in a long term sustainable manner.	Account will also be taken of other sources of financing available to the target country, at short term, from the donor community, to respond to the Food crisis, and of the potential of the country to increase agricultural production, in a long term sustainable manner.
	Indicative criteria for financial allocations per country:
	· A sufficient level of good governance;
	· The real needs of the population concerned;
	· Sufficient capacity to set up social safety nets for poor and vulnerable groups;
	· Sufficient capacity to increase agricultural production rapidly and efficiently;
	· Sufficient infrastructure to accommodate a rapid increase in production and to supply local and regional markets.

Justification

The criteria for selecting target countries should be fixed, so an indicative list is not appropriate. This also brings the annex into line with Article 1(3) which does not mention that the list is indicative.

• [1]  OJ C 139 del 14.6.2006, p. 1.

EXPLANATORY STATEMENT

A crisis that cannot be ignored

Soaring food prices are not just the stuff of newspaper headlines. For the 2.1 billion people in the world who try to survive on less than $2 a day and spend roughly 50% of their income on food, they are a real threat to survival. Record prices for staple cereal crops such as rice, corn and wheat have a direct impact on the numbers of hungry in the world - with another 50 million joining their ranks in 2007 alone, according to FAO figures. Street demonstrations have turned into riots in such countries as Haiti, Bangladesh and Egypt. And the chances of meeting the first of the UN Millennium Development Goals - halving world hunger by 2015 - are looking increasingly slim.

Much has been said about the multiple causes of the crisis - increased consumption of meat, rather than grain, in China and India, along with climate-change-related weather phenomena such as drought in Australia, diversion of food crops to biofuel production and world grain stocks at record lows. With such structural factors in play, it is understandable that most analysts expect prices to remain high for the foreseeable future. And speculation in agricultural commodity markets only fuels food price rises. But regardless of the origin of the crisis, the imperative now is to put together a coherent, coordinated and effective response.

For this purpose, the Commission has already redeployed as much funding as possible from the Community’s long term external cooperation instruments. The opportunity for doing the same in 2009 is very limited, and mobilisation of short-term resources would still fall far short of the levels required. Furthermore, it would place at risk the coherence of existing cooperation programmes. Another solution had to be found.

The Commission's proposal for a 1-billion-euro fund to address the food crisis is a major, and very timely, contribution to meeting this urgent challenge. Your rapporteur would like to offer his warm congratulations to the Commission for taking such a bold initiative. He looks forward to working closely with them and Council towards the urgent adoption of this important legislation.

Within the European Parliament, he anticipates – on the basis of his preliminary contacts with colleagues - close cooperation with the other committees interested in the subject, particularly the Agriculture Committee and the Budgets Committee. He is confident that this spirit of positive collaboration will allow for a speedy adoption of a Regulation acceptable to all.

A two-track approach

The need for a twofold response to the food crisis has been underlined by two high-profile visitors to Development Committee in the first half of this year.

In March, the Committee was addressed by Josette Sheeran, Executive Director of the World Food Programme, who outlined the impact of the crisis for the food aid operations run by her agency. Higher food prices meant food aid was more expensive, at precisely the time when more people needed it, she said - and the fuel price shock just compounded the problem. Her urgent appeal for increased funding was heeded both at EU level and by other donors worldwide.

In May, internationally-renowned economist Jeffrey Sachs spoke to the Committee, in his capacity as Special Advisor to the UN Secretary General on the Millennium Development Goals (MDGs). While not denying the importance of food aid and other humanitarian operations in the immediate term, he emphasised the need for a rapid reactivation of agriculture to provide a more sustainable solution in the medium and longer terms. In particular, he said it was vital to provide farmers in developing countries with the key inputs they need to boost production.

Proposal for a Food Facility - aimed at meeting real needs

With the aim of fitting in after the immediate, humanitarian response to the food crisis, the Commission's proposed "facility for a rapid response to soaring food prices in developing countries" responds to this double appeal.

It specifically makes provision for finance to cover improved access to agricultural inputs and services, including fertilizers and seeds[1], and also aims to support "safety-net" measures aiming at maintaining or improving the agricultural productive capacity, and at addressing the basic food needs of the most vulnerable populations"[2]. While the agricultural inputs should operate on a short- to medium-term timeline, the social safety-nets, by definition, will be more of an "emergency" nature, intended to establish systems which can provide relief until increased production improves the availability of food at reasonable prices.

Your rapporteur is satisfied that these two aspects cover the most pressing concerns at this moment. He is keen to discourage opening too wide a debate on the variety of actions to be financed, since this could make it more difficult to get a first-reading agreement with the required urgency.

The proposed text, however, raises a number of concerns, which your rapporteur's amendments are designed to remedy:

a) Comitology

Regulations allowing for the implementation of the Community budget normally set up a system for subsidiary decisions, of a technical nature, to be taken by a committee of Member State representatives and the Commission. The rules for such committees are laid down in the Comitology Decision[3], which also enshrines Parliament’s right to oversee the measures presented to the Committee. However, this structure is absent from the proposal for a new Food Facility.

The Commission's concerns about rapid implementation of the Regulation are understandable, especially for 2008 funding. However, in legal terms, there is no precedent for this type of decision to be taken without a committee structure. Furthermore, from the political perspective, this would be beneficial for Parliament and also, your rapporteur understands, the Member States would be most reluctant to allow such an innovation.

Amendments are therefore proposed to introduce the standard comitology structure for this type of legislation - a Management Committee - with specially reduced deadlines allowing for rapid decision-making in 2008.

b) Mechanisms for delivering assistance

The proposal presents a very limited choice of means through which the financing may be channelled, since it provides for initiatives to be implemented exclusively through regional and global International Organisations.

While understanding that this modality could be useful to ensure rapid implementation, your rapporteur feels the text is too restrictive in this regard. It is a characteristic of agriculture in developing countries that conditions vary widely from one country to another, and this is also true of the degrees of expertise, specialisation and effectiveness of different types of organisations which may be used to implement assistance. Furthermore, it must not be forgotten that there will be much less urgency for the implementation of funds in 2009.

Your rapporteur proposes amendments to widen the choice of bodies which may be selected by the Commission to implement measures under the Regulation, on the basis of the list already used for the Development Cooperation Instrument.

c) Evaluation

Provisions allowing for the evaluation of actions carried out under the Regulation are absent from the proposal. Since this is the best means to find out about the results of the assistance, your rapporteur proposes an amendment to include the necessary text.

d) Budgetary aspects

The Commission explains in the proposal that the 1-billion-euro financial envelope for the Regulation is to be drawn from funding that is not required for 2008, and is unlikely to be required for 2009, under the Common Agricultural Policy. The credits were foreseen to support agricultural prices within the Community, but are not being used precisely because of the same phenomenon of high food prices that resulted in the crisis for developing countries.

A delicate question is raised over the status of the proposal with regard to the Multiannual Financial Framework (MFF), included in the Budgetary Interinstitutional Agreement of 2006[4]. The Commission argues that the funding can be drawn directly from Heading 2 due to the agricultural nature of the actions to be financed, thereby avoiding the need for a revision of the MFF, but this view is not universally shared by others involved in the budgetary decision-making process.

Within Parliament, your rapporteur acknowledges the concerns of his Budgets Committee colleagues on this matter. He proposes to give full respect to their competence in budgetary questions, and avoid making any pronouncements which may be construed as impinging on their competence. Since a budgetary procedure will have to accompany the legislative procedure on this proposal, either on the basis of amendment of the 2008 and 2009 budgets as foreseen in the Commission proposal or on any other basis, he plans to leave the political space for Budgets Committee to take these decisions in parallel with consideration of the proposal in Development Committee. To this end, he has refrained from proposing any amendments to the financial provisions of the proposal, contained in Article 10. Arrangements agreed by the Budgetary Authority will be proposed as amendments to the legislative text at a later date.

In reaching these agreements, your rapporteur requests the budgetary decision-makers to bear in mind the gravity of the crisis afflicting developing countries and the need for the Regulation to be put in place without delay if it is to be effective in the short term. He would also like to draw attention to the legitimate concerns about the likely difficulty of arranging for excessively large sums to be committed in the last few weeks of 2008.

e) Additionality

It is a particular concern of your rapporteur to press for funding under the new Regulation to be additional. Alleviating the crisis of high food prices must not come at the cost of development actions in other necessary areas. This concern applies equally to funding from the Community budget, where the Regulation must not be used to substitute actions under other financing instruments, and for the Member States for whom it would be unconscionable to divert resources from bilateral programmes to support the Regulation.

An accelerated legislative procedure

Given the urgency of the subject, and the fact that part of the funding is drawn from the 2008 budget and must be committed before the end of the year, decision-making for this Regulation must be especially expedited. Your rapporteur proposes to work to a timetable which will allow for adoption in the October II plenary session in Strasbourg, aware that even then it will be a difficult task for 2008 funds to be implemented in time. He appeals most sincerely to colleagues from all institutions to cooperate in the most positive way possible to meet the challenge of putting the Regulation in place in time.

Something must be done - and fast!

The food crisis is about real hardship, not just headlines. Faced with such a grave situation, the European public and wider world would not understand it if spare funding in the EU budget were not used for this. Legislators must not forget their responsibility to the world. And the world is watching and will hold us responsible for our actions.

• [1]  Article 3 (2) (a) of COM (2008) 450/5
• [2]  Article 3 (2) (b) of COM (2008) 450/5
• [3]  Council Decision (1999/468/EC) of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission
• [4]  Interinstitutional Agreement between the European Parliament, the Council and the Commission on budgetary discipline and sound financial management of 17 May 2006

OPINION of the Committee on Budgets (*) (2.10.2008)

for the Committee on Development

on the proposal for a regulation of the European Parliament and of the Council establishing a facility for rapid response to soaring food prices in developing countries
(COM(2008)0450 – C6‑0280/2008 – 2008/0149(COD))

Rapporteur (*): Reimer Böge

(*) Associated committee – Rule 47 of the Rules of Procedure

SHORT JUSTIFICATION

background

On 18 July 2008, the Commission presented its proposal on a facility for rapid response to soaring food prices. For several months, the Commission has been reflecting on the appropriate EU answer to be given to the dramatic food crisis that has arisen in developing countries.

From the outset, the European Parliament supported the Commission in its assessment of the urgent need for a concrete contribution by the EU to tackle this crisis. It underlined that the Commission had to mobilise all funds to ensure that the food operations are not interrupted, and that additional aid has to be provided to face this exceptional situation.

Since there are some fundamental budgetary elements in this proposal, the Committee on Budgets requested the application of the Rule 47 of the Rules of Procedure on enhanced cooperation between committees, and will limit itself solely to the budgetary aspects.

BUDGETARY ASPECTS

- As regards the financing of this new instrument, the draftsperson considers that the Commission has not proposed the adequate mechanism. The very essence of this instrument is direct assistance to third countries, which should clearly be financed under the specific heading foreseen by the Multi-annual Financial Framework (MFF), “The EU as a global partner”. This is even more relevant since the Commission intends to create the two new budget lines (financial instrument and administrative support) under Chapter 21 of the EU Budget (Development and relations with ACP States), which covers the similar existing programmes.

This being the case, the proposal to finance this new mechanism from the available margin of Heading 2 (“Preservation and management of natural resources”) is inappropriate and confusing.

- Since the margins under the ceiling of Heading 4 shall not suffice to finance the facility (merely EUR 750 million EUR from the 2008 budget and EUR 250 million from the 2009 budget), a modification of the respective ceilings is needed.

All the instruments provided for by the IIA of 17 May 2006 should therefore be used to finance the facility.

- The proposed instrument provides for specific measures, such as access to agricultural inputs and services, including fertilizers and seeds. Such measures are already foreseen in the existing Regulation (EC) No 1905/2006 establishing a Financing instrument for development cooperation (DCI).

The draftsperson therefore wishes to question the redundancy of legislation encouraged by the Commission.

- The creation of a new legal instrument to tackle this food crisis is symptomatic of the trend in tackling situations on a case-by-case and annual basis. The draftsperson points out that the recommendations made by the European Council in its conclusions (notably those of 19-20 June 2008) should be dealt with on the basis of a multi-annual approach.

AMENDMENTS

The Committee on Budgets calls on the Committee on Development, as the committee responsible, to incorporate the following amendments in its report:

Amendment  1 Draft legislative resolution Paragraph 1 a (new)
Draft legislative resolution	Amendment
	1a. Considers that the reference amount indicated in the legislative proposal is not compatible with the ceiling of heading 4 of the multi-annual financial framework (MFF) without adjusting the ceiling according to the provisions laid down in the Interinstitutional Agreement (IIA) of 17 May 2006 on budgetary discipline and sound financial management; considers that the financing of this facility instrument should not jeopardise the financing of other priorities and current commitments of the EU;
Justification
Before the final adoption of the legislative act, the two arms of the budgetary authority should enter into negotiations to reach an agreement on the financing of this facility exploring all the possibilities available under the IIA, including the creation of a new temporary fund.
Amendment  2 Draft legislative resolution Paragraph 1 b (new)
Draft legislative resolution	Amendment
	1b. Stresses that the provisions of Point 14 of the IIA of 17 May 2006 shall be applied in the event that the legislative authority decides in favour of the adoption of the legislative proposal; stresses that Parliament will enter into negotiations with the other arm of the budgetary authority with a view to reaching a timely agreement on the financing of this facility;
	1c. Considers that, in the course of these negotiations, the two branches of the budgetary authority should examine all possibilities of financing, including the extension of the Emergency Aid Reserve; considers that this total financing must not exceed 1 billion euros;
Amendment  3 Proposal for a regulation Recital 5
Text proposed by the Commission	Amendment
(5) The European Council meeting on 20 June 2008, concluded that action is required from the European Union from a development and humanitarian perspective. In addition it was stated that the European Union will mobilise resources to finance, beyond food aid, safety nets for poor and vulnerable population groups, that the EU will support a strong agricultural supply response in developing countries, providing in particular the necessary financing for agricultural inputs and assistance in using market-based risk management instrument and welcomed the Commission's intention to come forward with a proposal for a new fund to support agriculture in developing countries, within the current financial framework.	(5) The European Council meeting on 20 June 2008 concluded that action is required from the European Union from a development and humanitarian perspective. In addition it was stated that, in order to fully support progress towards all Millennium Development Goals, the European Union will mobilise resources to finance, beyond food aid, safety nets for poor and vulnerable population groups, that the EU will support a strong agricultural supply response in developing countries, providing in particular the necessary financing for agricultural inputs and assistance in using market-based risk management instrument and welcomed the Commission's intention to come forward with a proposal for a new fund to support agriculture in developing countries, within the current financial framework.
Amendment  4 Proposal for a regulation Recital 5 a (new)
Text proposed by the Commission	Amendment
	(5a) During the same meeting, the European Council reaffirmed its commitment to meeting the EU Official Development Assistance (ODA) targets in 2010 and 2015 (0,56 % and 0,70 % of EU GNI respectively), which would represent a doubling of the amount of annual EU ODA in 2010; such commitments clearly make a multi-annual budget programming of EU development aid necessary.
Amendment  5 Proposal for a regulation Recital 8
Text proposed by the Commission	Amendment
(8) The same conditions which lead to the need for the present financing facility (the high food prices), also lead to lower agriculture market expenditure under Heading 2 of the Financial Framework. Current estimates also indicate a significant unallocated margin under the ceiling of Heading 2 in 2009.	(8) The same conditions which lead to the need for the present financing facility (the high food prices), also lead to lower agriculture market expenditure under Heading 2 of the Financial Framework. Current estimates also indicate a significant unallocated margin under the ceiling of Heading 2 in 2009. According to the principle of specificity, the actions provided for in this Regulation aim at strengthening cooperation with developing countries. The expenditure required to cover these actions should therefore be financed under Heading 4 of the Multiannual Financial Framework (MFF): "The EU as a global partner".
Amendment  6 Proposal for a regulation Recital 8 a (new)
Text proposed by the Commission	Amendment
	(8a) The Interinstitutional Agreement of 17 May 2006 between the European Parliament, the Council and the Commission on budgetary discipline and sound financial management1 (IIA) contains the appropriate instruments, especially those in point 23, for the adjustment of ceilings between various headings of the MFF.
	1 OJ C 139, 14.6.2006, p. 1
Amendment  7 Proposal for a regulation Recital 13 a (new)
Text proposed by the Commission	Amendment
	(13a) According to Article 276 of the EC Treaty, the implementation of the facility is subject to the annual discharge procedure.
Amendment  8 Proposal for a regulation Recital 15 a (new)
Text proposed by the Commission	Amendment
	(15a) The facility should focus on microcredit facilitation for small agricultural producers in the developing countries affected by the crisis. This microcredit facility should be developed by analogy with existing instruments (Financing Instrument for Development Cooperation (DCI) and European Development Fund (EDF)).
Amendment  9 Proposal for a regulation Article 3 – paragraph 2 – point ba (new)
Text proposed by the Commission	Amendment
	(ba) micro-credit facilities for small agricultural producers to boost production.
Amendment  10 Proposal for a regulation Article 10
Text proposed by the Commission	Amendment
1. The total financial reference amount for the implementation of this Regulation over the period 2008-2009 shall be EUR 1.0 billion.	1. The total financial reference amount for the implementation of this Regulation over the period 2008-2009 shall be EUR 1.0 billion. This reference amount shall be financed under Heading 4 of the Financial Framework.
2. For 2008, the reference amount shall be EUR 750 million	2. The annual amount will be decided in the context of the annual budgetary procedure.
3. For 2009, the maximum reference amount shall be EUR 250 million.
4. The amount committed shall, for each year, leave a margin under heading 2 of the financial framework of at least EUR 600 million, based on the forecast of the most recent early warning system report as established in Regulation (EC) No 1290/2005. Should that not be the case for a particular year, the maximum amount which can be committed for that year pursuant to this Regulation shall be reduced in order to restore such a margin under heading 2.	3. In order to cover the needs flowing from the proposed Regulation, the Multiannual Financial Framework shall be adjusted by all means provided for in the Interinstitutional Agreement of 17 May 2006. Should part or the entirety of the appropriations be used from the available margin of Heading 2 of the Financial Framework, a margin of at least EUR 600 million, based on the forecast of the most recent early warning system report as established in Regulation (EC) No 1290/2005, shall be left, for each year, under this heading. Should that not be the case for a particular year, the maximum amount which can be committed for that year pursuant to this Regulation shall be reduced in order to restore such a margin under Heading 2.

PROCEDURE

Title	Facility for rapid response to soaring food prices in developing countries
References	COM(2008)0450 – C6-0280/2008 – 2008/0149(COD)
Committee responsible	DEVE
Opinion by        Date announced in plenary	BUDG 2.9.2008
Drafts(wo)man        Date appointed	Reimer Böge 3.9.2008
Discussed in committee	10.9.2008		22.9.2008
Date adopted	22.9.2008
Result of final vote	+: –: 0:	21 0 0
Members present for the final vote	Richard James Ashworth, Reimer Böge, Paulo Casaca, Brigitte Douay, James Elles, Salvador Garriga Polledo, Catherine Guy-Quint, Jutta Haug, Anne E. Jensen, Alain Lamassoure, Janusz Lewandowski, Eleonora Lo Curto, Mario Mauro, Jan Mulder, Margaritis Schinas, Theodor Dumitru Stolojan, László Surján, Helga Trüpel, Kyösti Virrankoski, Ralf Walter
Substitute(s) present for the final vote	Thijs Berman

OPINION of the committee on agriculture and rural development (*) (6.10.2008)

for the Committee on Development

on the proposal for a European Parliament and Council regulation establishing a facility for rapid response to soaring food prices in developing countries
(COM(2008)0450 – C6‑0280/2008 – 2008/0149(COD))

Draftsman(*): Stéphane Le Foll

(*) Procedure with associated committees - Rule 47 of the Rules of Procedure

SHORT JUSTIFICATION

I) Background: price rises at the origin of a food crisis

The past two years will be noted for a spectacular turnaround in global agricultural produce and food markets, in which trends over 30 years have accustomed us to a steady fall in prices in real terms. The soaring prices brought about by this change have led to macroeconomic disruption and a genuine food crisis, affecting most markedly the most vulnerable populations on the planet, particularly those living in countries at war and in the poorest countries, where people spend more than half their earnings just to feed themselves. A consequence of these price rises has been an increase in already high rates of poverty, malnutrition and famine risk, with an all-too-familiar impact on political stability and international geostrategic balances.

This food crisis, dramatically illustrated by the hunger riots last spring, is set against a context of a structural increase in global demand for agricultural produce, linked to a demographic expansion, changes in food habits and the development of agro-fuels.

It is combined with a financial crisis marked by increased speculation on agricultural markets. And it comes at a time when, in the North and the South, we are beginning to gauge the impact of global warming and scarcity of natural resources (water, energy, loss of biodiversity, etc.) on the planet’s agriculture.

This crisis, which is not simply a passing phenomenon, affects agriculture in all parts of the world and is putting the question of agricultural production and the major food balances at the centre of the debate.

The situation in which we find ourselves has not come about by accident. It is largely the result of previous choices, for the most part influenced by the rich countries:

- The deregulation and structural adjustment policies imposed for 20 years by the IMF and the World Bank on the poorest countries made their food supply strongly dependent on imports. International food prices being too low by comparison with their local production costs discouraged their own agricultural development. Remember that these international prices result from competition between high-productivity areas of production, some of which are subsidised.

- The WTO negotiations on global trade in farm products (less than 10% of production) designed to liberalise trade between solvent actors do not allow food to be provided to the poorest consumers.

- Commitments were made to development aid polices on the basis of financial promises that were not kept. Furthermore, they radically moved away from agriculture, which is the decisive sector for kick-starting any development and vital for 75% of the world’s poor living in rural areas. Today the European Union allocates only 4% of appropriations under its development policy to agriculture.

The food demonstrations were a wake-up call. As a result, various EU and international bodies have tried to react to what can be viewed as a food emergency.

II) A rapid response by the Union to soaring food prices in developing countries

A) The Commission proposal

The Commission has endeavoured to respond to requests from the European Parliament and then the Member States (General Affairs Council followed by the European Council of 19 and 20 June) by undertaking a collective action in support of developing countries.

After marginally adjusting the existing development policy instruments by way of response to rising food prices, it proposed an additional short-term financing of € 1 billion, to come from funds available under the CAP.

This initiative, part-way between emergency aid and development, aims to support agricultural supply in the developing countries most affected by the rise in food prices, as well as activities that will mitigate its negative effects.

The measures involved concern improving access to agricultural inputs and services (including fertilizers and seeds) and ‘safety net’ measures aimed at maintaining or improving the agricultural productive capacity and addressing the basic food needs of the most deprived populations.

B) The rapporteur’s overall assessment 

In view of the dramatic consequences of the food crisis on populations in the poorest countries, the rapporteur expresses his solidarity for those affected by supporting the Commission’s initiative.

However, to that support in principle the rapporteur would add a number of observations:

Budgetary considerations:

- Without calling into question the initiative, the rapporteur would point out that drawing on unused CAP funds must be an exception. It is important that the Union continues to be able to meet all its commitments to farmers, particularly those in the new countries, who still do not receive the same level of support as their counterparts in the 15 old Member States. It should also be pointed out to the Commission and the Council that the rise in agricultural prices has also had negative, not to say disastrous, repercussions for certain European farmers, particularly stock farmers. It is important, therefore, also to understand their situation both when the budget is being prepared and also in the rescheduling of the CAP provided for in the ‘health check’. Finally, in the context of the most recent financial perspectives, the rapporteur would draw the Member States’ attention to the fact that we cannot constantly desire ‘more Europe’ through the creation or strengthening of Community policies without providing more budget resources, which had they been available earlier could have avoided the need for the expedient proposed by the Commission.

Considerations on the agricultural aspect of the initiative:

- The rapporteur welcomes the fact that more attention is finally being paid to agriculture, and particularly to agricultural production in the poorest countries. He believes it is vital to develop all the world’s agricultures and food cultures so that every region is best able to meet the needs of its population.

- The rapporteur welcomes the Commission’s emphasis on measures intended to kick-start production - access to resources and services for the poorest farmers (who account for close to 80% of the undernourished) - and on ‘safety net’ measures to help markets for local production by improving the purchasing power of poor consumers. However, he would like to see the Commission provide more detail on production-related actions that could be financed: access to water and to microcredits, support for producer organisations for production and marketing and storage.

- For the sake of efficiency, the rapporteur recommends that the Commission incorporate this facility into a genuine global strategy intended to help kick-start agricultural production within a sustainable development framework adapted to the needs of the populations concerned and to the natural potentials of the territories concerned. This presupposes two conditions:

1) Action over a sustained period:

The rapporteur questions the duration of this initiative. This facility is envisaged as a short-term commitment, whereas developing a potential in agriculture requires time and continuity. Farmers always need to make choices looking ahead over a year or more (crops, investments, etc.). They need a framework and predictability, not least concerning the stability of prices for their products. What will happen a year down the road when the resources for access to inputs and services and then the ‘safety net’ measures financed by the facility have disappeared? Has sufficient account been taken of these dimensions in the existing medium- and long-term development instruments, which, we are told, have been readjusted at the margins to incorporate the rise in food prices but in which the share devoted to agriculture remains extremely small.

2) Action on economic regulation:

In an increasingly liberalised and globalised economy, international markets in agricultural and food products, unstable by their very nature, result in confrontation between the extremely different levels of competitiveness of the world’s agricultures. It is this which is at the origin of the serious disturbances in the local markets of the poorest countries, which, as indicated above, have practically no protection at their borders any longer. This situation handicaps the development of domestic production when global prices are low. But inversely, when they are high, as now, it is impossible to shift them downwards without to some extent regulating production and global prices. On this point the rapporteur does not understand how the Commission can expect this ‘modest facility’ to mitigate the rise in food prices.

- As far as the implementation of the facility is concerned, the Commission makes no mention of the participation of local actors (farmers, consumers, officials) or indeed NGOs, even though successful development always involves people taking responsibility for their own destiny.

Considerations on the implementation of the facility:

The rapporteur wants to be sure that the Union has the administrative capacity to use the € 1 billion appropriation effectively. To that end he calls on the Commission to act within an overall strategy and coherently with the other development programmes and actions.

He also calls on the Commission to secure the maximum possible guarantees as regards the capacities of the organisations it contracts. To that end, the rapporteur would like to see the range of structures able to provide aid opened up to include experienced NGO-type organisations which have appropriate resources and recognised know-how.

He would like the Commission to spend the € 1 billion as transparently as possible. He therefore calls on the Commission to draw up a precise forward plan on the use of the funds, detailing the measures envisaged, together with quantified objectives, the share of financing allocated to each objective and the resources planned for administering the facility. The plan should be validated in a committee procedure enabling the European Parliament to be informed. This would make a final evaluation much easier. He also proposes that an initial interim report should be drawn up in September 2009 to allow the measures to be adapted, as appropriate, to the most pressing needs of the poor populations in the target countries.

Conclusions

The European Union, with its substantial human and financial resources, should act more energetically and longer term and commit to a more ambitious, more proactive policy on the international stage to help improve the food balance and support global development. To that end it will need to involve the other global actors and convince them to participate in a number of specific proposals:

- Setting up at the UN an ‘International Council on Food Security and Development’, responsible for crisis management. By coordinating the strategic choices of the FAO, the IMF, the World Bank and the entire international community, this tool should facilitate the establishment of agricultural and food policies in each of the world’s regions. The creation of regional integrations would constitute a first step in this direction.

- It is important to re-establish a minimum of regulation in international markets to ensure supply and a degree of price stability, in the interests of all the world’s consumers and producers. The restoration of security stocks is vital in order to respond to emergency situations, anywhere in the world (including for the needs of European food banks) and to limit the speculation that has occurred in food markets in recent months.

- Development aid must be enhanced and the share allocated to agriculture seriously re-assessed.

AMENDMENTS

The Committee on Agriculture and Rural Development calls on the Committee on Development, as the committee responsible, to incorporate the following amendments in its report:

Amendment  1 Proposal for a regulation Citation 1 a (new)
Text proposed by the Commission	Amendment
	- having regard to the International Assessment of Agricultural Knowledge, Science and Technology for Development (IAASTD),
Amendment  2 Proposal for a regulation Recital 1
Text proposed by the Commission	Amendment
(1) The recent soaring of Food Prices has put numerous developing countries and their populations in a dramatic situation. This risks putting additional hundreds of millions of people in extreme poverty and calls for increased solidarity with those populations.	(1) The recent soaring of Food Prices, which was predictable given the supply and demand situation on global agricultural produce and food markets, has put numerous developing countries and their populations in a dramatic situation This food crisis, accompanied by a financial and energy crisis and environmental deterioration (global warming, water scarcity, loss of biodiversity, etc.), risks putting additional hundreds of millions of people in extreme poverty and calls for increased solidarity with those populations All the data on the outlook for food markets lead to the conclusion that this food crisis affecting the most deprived populations in both the South and the North will persist over the coming years.
Justification
La crise alimentaire que nous vivons n'est pas un accident. Nous avons une idée de l'évolution future de l'offre et de la demande mondiale en produits agricoles et alimentaires. D'ici 2050 il y aura 3 milliards d'habitants en plus sur la planète. Il faudra produire deux fois plus et mieux en valorisant plus efficacement l'ensemble des ressources et en préservant davantage les écosystèmes et les équilibres naturels. Il conviendra aussi d'assurer une certaine régulation de l'économie agricole afin d'éviter les catastrophes alimentaires et les trop grands risques de spéculations sur les marchés de l'alimentation.
Amendment  3 Proposal for a regulation Recital 2
Text proposed by the Commission	Amendment
(2) A financing facility for a rapid response to the crisis caused by high food prices in developing countries should therefore be established by this Regulation.	(2) Alongside the European Union’s current development policy, which has for too long neglected to support the agricultural sector, and food production in particular, a financing facility for a rapid response to the crisis caused by high food prices in developing countries should therefore be established by this Regulation.
Justification
La crise alimentaire révèle au grand jour les carences des politiques de développement engagées avec les pays les plus pauvres. L'aide à l'agriculture se situe autour de 4% de l'aide au développement, alors que ce secteur reste la base de tout développement puisqu'il permet de répondre aux besoins les plus élémentaires de population souffrant de malnutrition. Dans ces régions la majorité des populations vivent en zones rurales, la majorité des mal nourris sont d'abord des agriculteurs pauvres qui ont un accès difficile aux ressources (terre, eau, énergie, engrais semences, microcrédits, services, etc.) pour produire et nourrir leurs populations. Nos politiques de développement l'ont un peu vite oublié.
Amendment  4 Proposal for a regulation Recital 5 a (new)
Text proposed by the Commission	Amendment
	(5a) During the meeting of 20 June 2008, the European Council strongly reaffirmed its commitment to achieve a collective ODA(Official Development Assistance) target of 0.56% of the Union's Gross National Income by 2010 and 0.7% of this income by 2015, as set out in the May 2005 European Council conclusions and in the European Consensus on Development of 20 December 2005. The national efforts of Member States towards achieving this goal should be taken into account within the framework of the facility provided by this Regulation.
Amendment  5 Proposal for a regulation Recital 7
Text proposed by the Commission	Amendment
(7) Financial needs to fully address the immediate consequences of the high food prices are very high. The response should come from the international community in its entirety and the Community is endeavoured to contribute its fair share.	(7) Financial and material needs to fully address the immediate consequences of the high food prices are very high. The response should come from the international community in its entirety and the Community is endeavoured to contribute its fair share.
Justification
The most adequate and effective response to the present food crisis is to increase food aid to developing countries.
Amendment  6 Proposal for a regulation Recital 8
Text proposed by the Commission	Amendment
(8) The same conditions which lead to the need for the present financing facility (the high food prices), also lead to lower agriculture market expenditure under Heading 2 of the Financial Framework. Current estimates also indicate a significant unallocated margin under the ceiling of Heading 2 in 2009.	deleted
Amendment  7 Proposal for a regulation Recital 11
Text proposed by the Commission	Amendment
(11) Those instruments, however, have already been mobilised or re-programmed in 2008 to the fullest possible extent to address the negative effects of the high food prices situation in developing countries. To a very limited extent the same could be done in 2009; however, that would be far from being sufficient to respond to the needs.	(11) Those instruments, however, have already been mobilised or re-programmed in 2008 to the fullest possible extent to address the negative effects of the high food prices situation in developing countries. To a very limited extent the same could be done in 2009; however, that would be far from being sufficient to respond to the needs. Faced with the current world food supply shortage and the steep increase in prices, which could continue in the years to come, the development assistance instruments financed under heading 4 of the Union budget should be strengthened, without this jeopardising the Union’s agricultural interests.
Amendment  8 Proposal for a regulation Recital 12
Text proposed by the Commission	Amendment
(12) In the current situation where high food prices lead to lower CAP expenditure, the Commission proposes to redirect parts of those savings to agricultural production in developing countries.	(12) In the current situation where high food prices lead to lower CAP expenditure, the Commission proposes to step up measures to redirect parts of those savings, which must be used as a stabilising factor, to agricultural production in developing countries, bearing in mind that there is a binding obligation, in the case of new, unforeseen financial need, first to examine the possibilities for transferring unused resources and to apply the usual budgetary procedures in a consistent manner.
Justification
The budgetary authority is under a binding obligation under Articles 21-23 to examine transfer possibilities.
Amendment  9 Proposal for a regulation Recital 13
Text proposed by the Commission	Amendment
(13) It is however necessary to protect the interest of the European farmers and to guarantee that this proposal will not under any circumstances trigger the mechanism of the financial discipline as provided in Council Regulations (EC) No 1782/2003 and (EC) No 1290/2005.	(13) It is however necessary to protect the interest of the European farmers, who are also suffering considerably from increased production costs in both agricultural production sectors and the fisheries sector, and to guarantee that this proposal will not under any circumstances trigger the mechanism of the financial discipline as provided in Council Regulations (EC) No 1782/2003 and (EC) No 1290/2005. In addition, it should be emphasised that, in the course of the reforms in the context of the Health Check, appropriations are needed to introduce accompanying measures for restructuring and support measures, particularly in the dairy sector, the sheep and goat sectors, and for the needs of particularly sensitive regions.
Justification
‘Soft landing’, accompanying measures for restructurings and other new challenges such as higher production costs resulting from higher energy prices need equal attention.
Amendment  10 Proposal for a regulation Recital 13 a (new)
Text proposed by the Commission	Amendment
	(13a) The new development assistance provided for by this Regulation should be managed in such a way as to guarantee the supply of foodstuffs to local populations and to avoid encouraging the appearance of agriculture geared solely to the export of raw materials to the developed countries, which would run counter to the objectives pursued by this measure by omitting to attend to local needs and engendering the risk of unfair competition with European products.
Amendment  11 Proposal for a regulation Recital 14
Text proposed by the Commission	Amendment
(14) As a consequence, it is necessary to adopt a specific financing facility, complementary to existing development instruments and the Humanitarian Aid Instrument, to adopt urgent and supplementary measures that address rapidly the consequences in developing countries of the present soaring food prices situation.	(14) As a consequence, it is possible to adopt a specific financing facility under heading 4 of the Union budget, complementary to existing development instruments and the Humanitarian Aid Instrument, to adopt urgent and supplementary measures that address rapidly the consequences in developing countries of the present soaring food prices situation. Checks on the funding given should take place in accordance with the rules in force within the Union.
Justification
This must not be allowed to turn into an automatic mechanism. Performance checks are necessary.
Amendment  12 Proposal for a regulation Recital 14 a (new)
Text proposed by the Commission	Amendment
	(14a) The results of the joint use of the financing facility and existing programmes in accordance with these objectives should be regularly evaluated in order to monitor the structuring of developing countries’ agricultural production apparatuses over the long term.
Amendment  13 Proposal for a regulation Recital 15
Text proposed by the Commission	Amendment
(15) The measures adopted with this facility should help developing countries to boost agricultural productivity in the next seasons, to respond rapidly to immediate needs of the countries and their population and to take initial steps needed to prevent as far as possible further food insecurity situations, and also contribute to mitigating the effects of the high food prices globally, to the benefit of the poorest people but also of the European consumers and farmers.	(15) The measures adopted with this facility should help developing countries to boost agricultural productivity in the next seasons, to respond rapidly to immediate needs of the countries and their population and to take initial steps needed to prevent as far as possible further food insecurity situations, and also contribute to mitigating the effects of the high food prices globally, to the benefit of the poorest people but also of the European consumers and farmers. It will only be possible to mitigate the effects of high global food prices if all the countries in the world - and the rich countries having a major responsibility - consider together the planet’s food balance and act to stabilise global prices so that all the world’s regions are able to develop their agriculture and meet the needs of their populations. This objective requires intelligent regulation of the agricultural economy and the compiling of security food stocks to deal with emergencies (natural disasters, etc.). Furthermore, the Union should promote regional integration among developing countries, which, over and above any geopolitical interest, has the advantage of taking a first step towards the emergence of agricultural policies along the lines of what the Community undertook over fifty years ago. Community assistance should be made dependent on fulfilment of certain minimum environmental conditions and compliance with the basic Conventions of the International Labour Organisation (ILO).
Justification
Il serait illusoire de croire que le laisser faire économique permettra à tous les être humains de la terre de se nourrir alors que l'accès à la nourriture constitue le premier droit à la vie. Cela tient pour beaucoup au fonctionnement économique et aux particularités des marchés agricoles dont on connaît la très grande instabilité notamment au plan international (ce sont des marchés résiduels hautement spéculatifs). Par ailleurs les différents niveaux de compétitivité des agricultures du monde qui se confrontent sur ces marchés n'aident pas l'agriculture des pays les plus pauvres dont l'économie est souvent très ouverte. Il faut donc admettre les bienfaits d'une certaine régulation de l'économie agricole. On a d'ailleurs ainsi justifié l'existence de toutes les des politiques agricoles du monde.
Amendment  14 Proposal for a regulation Recital 16
Text proposed by the Commission	Amendment
(16) The very nature of measures provided for under this Regulation calls for the establishment of efficient, flexible, transparent and rapid decision-making procedures for their financing, with a strong cooperation between all Institutions concerned. This Regulation should in particular allow for the financing of measures already initiated that International Organisations are supporting or ready to support before the adoption of this Regulation, as from 20 June 2008, corresponding to the date of the European Council Conclusions.	(16) The very nature of measures provided for under this Regulation calls for the establishment of efficient, flexible, transparent and rapid decision-making procedures for their financing, with a strong cooperation between all Institutions concerned. This Regulation should in particular allow for the financing of measures already initiated before the adoption of this Regulation, as from 20 June 2008, corresponding to the date of the European Council Conclusions.
Amendment  15 Proposal for a regulation Recital 16 a (new)
Text proposed by the Commission	Amendment
	(16a) The implementation of this regulation should be strongly monitored and should be subject of the annual discharge procedure. The financing of this regulation via international organisations should not hinder budgetary control, effectiveness and visibility of Union spending.
Amendment  16 Proposal for a regulation Article 1 – paragraph 1
Text proposed by the Commission	Amendment
1. The Community shall finance measures aimed at supporting a rapid and direct response to the increased food prices in developing countries, addressing the period between emergency aid and medium- to long-term development cooperation.	1. The Community shall finance, in addition to small loans, capital equipment, which must be obtained in the Union and is aimed at supporting a rapid and direct response to the increased food prices in developing countries, addressing the period between emergency aid and medium- to long-term development cooperation. These measures shall form part of an overall development strategy defining precise objectives and resources and establishing coherence among all emergency aid and development instruments.
Justification
La facilité des 1 milliard doit s’inscrire dans une stratégie d’ensemble coordonnant tous les efforts de la Communauté en faveur du développement. Par ailleurs la crise alimentaire impose des réponses urgentes mais aussi des réponses à plus long terme afin d'aider le développement de l'agriculture et de stimuler l'offre en produits alimentaires. Les processus de valorisation des ressources par l'activité agricole et de modernisation de l'agriculture nécessitent du temps. Par ailleurs les agriculteurs ont besoin de perspectives et de stabilité pour produire. C'est pourquoi les moyens accordés à l'agriculture doivent être sérieusement accrus mais doivent aussi être répartis dans un temps long.
Amendment  17 Proposal for a regulation Article 1 – paragraph 2 – subparagraph 1
Text proposed by the Commission	Amendment
2. Measures shall benefit developing countries, as defined by OECD/DAC, and their populations, in accordance with the following provisions.	2. Measures shall benefit developing countries, as defined by OECD/DAC, their populations and European Union producers, in accordance with the following provisions.
Justification
European producers should be given an equal measure of protection.
Amendment  18 Proposal for a regulation Article 1 – paragraph 2 – subparagraph 2
Text proposed by the Commission	Amendment
The Commission shall adopt the measures referred to in paragraph 1. They shall finance international initiatives supporting the purpose and objectives of this Regulation and which are implemented through regional and global International Organisations. It shall inform the European Parliament and the Council thereof.	The Commission shall adopt the measures referred to in paragraph 1. They shall finance international initiatives supporting the purpose and objectives of this Regulation and which are implemented through regional and global public or private International Organisations in conjunction with local producer organisations. It shall inform the European Parliament and the Council thereof. The European Parliament shall thus be regularly informed on the implementation of the facility through meetings arranged at the Commission's initiative, and then through an initial written interim report in June 2009.
	The European Parliament shall have the last word over expenditure.
Amendment  19 Proposal for a regulation Article 1 – paragraph 3 a (new)
Text proposed by the Commission	Amendment
	3a. A developing country is not eligible for assistance - even if otherwise meets the criteria defined by the Annex - if:
	- its natural forest area is decreasing,
	- it is a net exporter of agricultural products,
	- desertification, overpasture or irrational use of water is taking place.
Justification
Community assistance should be compatible with the objectives of sustainable development and environment policy.
Food crisis should be addressed in countries which are net food importers.
Amendment  20 Proposal for a regulation Article 1 – paragraph 4
Text proposed by the Commission	Amendment
4. To ensure the coherence and effectiveness of Community assistance, where the programme to be implemented is of regional or cross-border nature, the Commission may decide that populations of other developing countries not belonging to that region can benefit from the programme in question.	deleted
Justification
Only selected countries should be supported.
Amendment  21 Proposal for a regulation Article 1 – paragraph 5
Text proposed by the Commission	Amendment
5. International Organisations, including Regional Organisations (hereafter "International Organisations") will be selected on the basis of their capacity to deliver a speedy and high quality response to the specific needs of the targeted Developing Countries in relation to the objectives of this Regulation.	5. International Organisations, including Regional Organisations (hereafter "International Organisations") will be selected on the basis of their capacity to deliver a speedy and high quality response to the specific needs of the targeted Developing Countries in relation to the objectives of this Regulation. In addition, International Organisations will be selected based on their ability to effectively and efficiently distribute funds with the minimum of administrative bureaucracy.
Amendment  22 Proposal for a regulation Article 2 – paragraph 1
Text proposed by the Commission	Amendment
1. The primary objectives of the assistance and cooperation under this Regulation shall be to encourage a positive supply response of agricultural sector in target countries and regions in the context of their sustainable development and to support activities to respond rapidly and directly to mitigate the negative effects of high food prices in line with food security objectives.	1. The primary objectives of the assistance and cooperation under this Regulation shall be to encourage the sustainable development of farm production and local markets in order to allow a positive supply response of agricultural sector in target countries and regions in the context of their sustainable development and to support activities to respond rapidly and directly to the food needs of local populations to mitigate the negative effects of high food prices in line with food security objectives.
Amendment  23 Proposal for a regulation Article 2 – paragraph 2 a (new)
Text proposed by the Commission	Amendment
	2a. Existing programmes and projects shall be scrutinised so that only duly inspected, future-oriented projects that sustainably serve small farmers and rural structures receive additional support, in which process the use of resources must be optimised and deadweight effects avoided.
Amendment  24 Proposal for a regulation Article 2 – paragraph 3 – subparagraph 2
Text proposed by the Commission	Amendment
The different development instruments and this Facility shall be applied so as to ensure continuity of cooperation, in particular as regards the transition from emergency to medium- and long-term response.	The different development instruments and this Facility shall be applied so as to ensure continuity of cooperation, in particular as regards the transition from emergency to medium- and long-term response. From now on all development tools shall allocate a larger share to agriculture and agricultural production, without which a country cannot achieve sustainable development, one of the priority objectives of which is to supply sufficient food to its population.
Justification
Un pays ne peut se développer quand il ne parvient pas à nourrir sa population. Dans le contexte de crise alimentaire dans lequel nous sommes l’urgence est donc bien d'augmenter durablement l'aide à l’agriculture trop longtemps négligée des politiques de coopération développement. Rappelons simplement que la majorité des populations des pays pauvres vivent dans les campagnes, que l’alimentation représente plus de 50% des dépenses des ménages, que les plus mal-nourris sont souvent des agriculteurs pauvres qui ne parviennent pas à produire faute de moyens suffisants, leur permettant d’accéder aux ressources (terre, eau, engrais, semences, services, crédits, etc.)
Amendment  25 Proposal for a regulation Article 3 – paragraph 1
Text proposed by the Commission	Amendment
1. Community assistance and cooperation shall be implemented through a set of decisions to finance supporting measures as described in Article 1, paragraphs (1) (2) and (3) of this Regulation, which shall be adopted by the Commission.	1. Community assistance and cooperation shall be implemented through a set of decisions to finance supporting measures as described in Article 1, paragraphs (1) (2) and (3) and Article 3, paragraph (2) of this Regulation, which shall be adopted by the Commission. Before initiating the financing of this facility the Commission shall draw up a precise forward plan for the use thereof, detailing all the measures envisaged, together with quantified objectives, the share of financing allocated to each objective and the resources planned for administration of the facility. The decision validating the forward plan shall be taken in accordance with the regulatory procedure with scrutiny provided for in Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission.
	1 OJ L 184, 17.7.1999, p. 23.
Justification
It is important for the Commission to provide specific details about the use of the € 1 billion by submitting a forward plan, which should be adopted using the committee procedure, allowing Parliament to be informed. The plan will then enable the facility to be evaluated.
Amendment  26 Proposal for a regulation Article 3 – paragraph 2 – point a
Text proposed by the Commission	Amendment
(a) measures to improve access to agricultural inputs and services, including fertilizers and seeds;	(a) measures to improve the infrastructure and means of production of the poorest small-scale farmers to support local and sustainable development, i.e.:
	- access to agricultural inputs (tailored to the optimum use of local resources) and services (extension, vocational training),
	- access to land, water and financing (microcredits),
	- the collective organisation of producers (for the purposes of production and setting up local markets and local seed banks),
	- crop storage;
Amendment  27 Proposal for a regulation Article 3 – paragraph 2 – point b
Text proposed by the Commission	Amendment
(b) safety net measures aiming at maintaining or improving the agricultural productive capacity, and at addressing the basic food needs of the most vulnerable populations.	(b) safety net measures aiming at maintaining or improving the agricultural productive capacity, and at addressing the basic food needs of the most vulnerable populations; any cases of dumping and distortion of local production and markets must be prevented;
Amendment  28 Proposal for a regulation Article 3 – paragraph 2 – point b) a (new)
Text proposed by the Commission	Amendment
	(ba) measures to support partner governments in defining and implementing effective national policies for food security in close cooperation with local farmer organisations and consumers;
Amendment  29 Proposal for a regulation Article 3 – paragraph 2 – point (b b) (new)
Text proposed by the Commission	Amendment
	(bb) technical consultancy and training measures on fulfilling the environmental standards set out in Union legislation.
Amendment  30 Proposal for a regulation Article 3 – paragraph 2 a (new)
Text proposed by the Commission	Amendment
	2a. The measures taken shall not support the production of raw materials for the manufacture of:
	- exotic or luxury goods (cacao, tea, tobacco, coffee) or
	- biofuels.
Justification
The aim of this proposal is to address the food crisis in developing countries. Therefore assistance should be given to the production of staple foods.
Amendment  31 Proposal for a regulation Article 3 – paragraph 3
Text proposed by the Commission	Amendment
3. Support measures which meet the objectives of this Regulation may be financed up to a maximum of 1 % of the amount referred to in article 10(1).	deleted
Justification
Since the resources are intended to go to activities that are already ongoing, there is no need for additional administrative costs.
Amendment  32 Proposal for a regulation Article 3 – paragraph 3 a (new)
Text proposed by the Commission	Amendment
	3a. Both the Commission and the European Parliament will rigorously scrutinise the disbursement of funds to the International Organisations, and the financial outlays of these Organisations in target countries, to ensure efficient and effective use of the Union’s money to meet the goals stated above.
Amendment  33 Proposal for a regulation Article 4
Text proposed by the Commission	Amendment
The entities eligible for funding shall be International Organisations fulfilling the conditions laid down in Article 43 of Commission Regulation (EC, Euratom) No 2342/2002.	The entities eligible for funding shall be local banks active in the agricultural sector. If possible, also the European Investment Bank and affiliated organisations are eligible for funding.
Justification
Instead of International Organisations, local banks active in the agricultural sector and, if possible, the European Investment bank and affiliated organisations, should be eligible for funding.
Amendment  34 Proposal for a regulation Article 5 – paragraph 2 a (new)
Text proposed by the Commission	Amendment
	2a. Community assistance shall be conditional on compliance with certain minimum environmental requirements and the basic Conventions of the International Labour Organisation (ILO).
Amendment  35 Proposal for a regulation Article 5 – paragraph 3
Text proposed by the Commission	Amendment
3. Participation in the appropriate contractual procedures shall be open to all natural and legal persons who are eligible pursuant to the geographical development instrument applicable to the country in which the action takes place, as well as to all natural and legal persons who are eligible pursuant to the rules of the implementing international organisation, care being taken to ensure that equal treatment is afforded to all donors. The same rules shall apply in respect of supplies and materials. Experts may be of any nationality.	3. Participation in the appropriate contractual procedures shall be open to all natural and legal persons who are eligible pursuant to the geographical development instrument applicable to the country in which the action takes place, as well as to all natural and legal persons who are eligible pursuant to the rules of the implementing international organisation, care being taken to ensure that equal treatment is afforded to all donors. Experts of any nationality may be deployed, but capital equipment, goods and materials shall be obtained in the Union.
Amendment  36 Proposal for a regulation Article 5 – paragraph 3 a (new)
Text proposed by the Commission	Amendment
	3a. The measures financed under this Regulation shall be in line with the 2005 Paris declaration on aid effectiveness. The reports as provided for in Article 9 shall address particular attention to this requirement.
Justification
All measures financed under this Regulation should be in line with the Paris Declaration on aid effectiveness, especially because it concerns a temporary facility. I should be ensured that the facility is contributing in an effective way to a sustainable improvement of the situation.
Amendment  37 Proposal for a regulation Article 6 – paragraph 1
Text proposed by the Commission	Amendment
1. Budget commitments shall be made on the basis of decisions taken by the Commission.	1. Budget commitments shall be made on the basis of decisions taken by the Commission and the European Parliament on an equal basis.
Amendment  38 Proposal for a regulation Article 6 – paragraph 2
Text proposed by the Commission	Amendment
2. Measures adopted under this Regulation may finance as from 20 June 2008 ongoing activities initiated in target countries or by organisations referred to in Article 4, before the entry into force of this Regulation.	2. Measures adopted under this Regulation may finance as from their adoption by the European Parliament ongoing activities initiated in target countries or by organisations referred to in Article 4, before the entry into force of this Regulation. In this case support granted under the present Regulation is to be used as additional resources.
Amendment  39 Proposal for a regulation Article 9
Text proposed by the Commission	Amendment
Reporting	Monitoring and evaluation
The Commission shall inform the European Parliament and the Council on the measures it has adopted pursuant to this Regulation no later than 31 December 2009. The Commission shall provide them with a report on the implementation of the measures, including, as far as possible, on the main outcomes and impacts of the assistance provided under this Regulation, no later than 31 December 2012.	The Commission shall inform the European Parliament and the Council regularly on the measures it adopts pursuant to this Regulation. In September 2009 the Commission shall provide them with an initial interim report on the measures undertaken to allow the content of the facility to be adapted to its objectives, as appropriate. In connection with the forward plan on the detailed use of the financing under the facility submitted prior to its implementation, the Commission shall provide the European Parliament and the Council, by 31 December 2010 at the latest, with a precise evaluation of the implementation of the facility in order to assess the real results and impact in the target countries.
Justification
It is important for the Commission to provide the European Parliament and the Council with regular information about the progress and results of the facility. Therefore it is appropriate to draw up an initial mid-term report, followed by a detailed final evaluation in order to measure the real impact on the populations most affected by the food crisis.
Amendment  40 Proposal for a regulation Article 10 – paragraph 1
Text proposed by the Commission	Amendment
1. The total financial reference amount for the implementation of this Regulation over the period 2008-2009 shall be EUR 1.0 billion.	1. The total financial reference amount for the implementation of this Regulation over the period 2008-2009 shall be EUR 1.0 billion. This reference amount shall be financed under Heading 4 of the Financial Framework for 2007-2013.
Amendment  41 Proposal for a regulation Article 10 – paragraph 4
Text proposed by the Commission	Amendment
4. The amount committed shall, for each year, leave a margin under heading 2 of the financial framework of at least EUR 600 million, based on the forecast of the most recent early warning system report as established in Regulation (EC) No 1290/2005. Should that not be the case for a particular year, the maximum amount which can be committed for that year pursuant to this Regulation shall be reduced in order to restore such a margin under heading.	4. The amount committed shall be financed under heading 4 of the EU budget.
Amendment  42 Proposal for a regulation Article 10 – paragraph 4 a (new)
Text proposed by the Commission	Amendment
	4a. Within the framework of the forthcoming review of the Union budget, the European Commission shall submit a report to the European Parliament and the Council assessing the need to strengthen development assistance through an increase in resources under heading 4, in order to cope with the rise in agricultural prices in poor countries and the food shortages suffered by local populations. That increase shall not be to the detriment of the budgetary needs of European Union farmers.

PROCEDURE

Title	Facility for rapid response to soaring food prices in developing countries
References	COM(2008)0450 – C6-0280/2008 – 2008/0149(COD)
Committee responsible	DEVE
Opinion by        Date announced in plenary	AGRI 2.9.2008
Associated committee(s) - date announced in plenary	23.9.2008
Drafts(wo)man        Date appointed	Stéphane Le Foll 9.9.2008
Discussed in committee	10.9.2008
Date adopted	6.10.2008
Result of final vote	+: –: 0:	21 2 2
Members present for the final vote	Luis Manuel Capoulas Santos, Giovanna Corda, Albert Deß, Gintaras Didžiokas, Constantin Dumitriu, Carmen Fraga Estévez, Friedrich-Wilhelm Graefe zu Baringdorf, Esther Herranz García, Lily Jacobs, Elisabeth Jeggle, Heinz Kindermann, Stéphane Le Foll, Véronique Mathieu, Mairead McGuinness, Rosa Miguélez Ramos, Neil Parish, María Isabel Salinas García, Agnes Schierhuber, Alyn Smith, Petya Stavreva, Dimitar Stoyanov
Substitute(s) present for the final vote	Katerina Batzeli, Esther De Lange, Jan Mulder, Maria Petre, Brian Simpson, Kyösti Virrankoski

PROCEDURE

Title	Facility for rapid response to soaring food prices in developing countries
References	COM(2008)0450 – C6-0280/2008 – 2008/0149(COD)
Date submitted to Parliament	18.7.2008
Committee responsible        Date announced in plenary	DEVE 2.9.2008
Committee(s) asked for opinion(s)        Date announced in plenary	AFET 2.9.2008		INTA 2.9.2008		BUDG 2.9.2008		CONT 23.9.2008
	AGRI 2.9.2008
Not delivering opinions        Date of decision	AFET 23.9.2008		INTA 9.9.2008		CONT 9.9.2008
Associated committee(s)        Date announced in plenary	AGRI 23.9.2008		BUDG 23.9.2008
Rapporteur(s)        Date appointed	Gay Mitchell 15.7.2008
Discussed in committee	25.8.2008
Date adopted	7.10.2008
Result of final vote	+: –: 0:	27 1 0
Members present for the final vote	Alessandro Battilocchio, Thijs Berman, Josep Borrell Fontelles, Danutė Budreikaitė, Nirj Deva, Alexandra Dobolyi, Fernando Fernández Martín, Juan Fraile Cantón, Alain Hutchinson, Romana Jordan Cizelj, Filip Kaczmarek, Glenys Kinnock, Maria Martens, Gay Mitchell, José Javier Pomés Ruiz, Horst Posdorf, Toomas Savi, Frithjof Schmidt, Jürgen Schröder, Johan Van Hecke, Anna Záborská
Substitute(s) present for the final vote	Ana Maria Gomes, Fiona Hall, Miguel Angel Martínez Martínez, Manolis Mavrommatis, Anne Van Lancker, Renate Weber, Gabriele Zimmer
Substitute(s) under Rule 46(6) present for the final vote	Stéphane Le Foll