Verbatim report of proceedings

Thursday, 11 November 2010 - Brussels

5. Crisis in the EU livestock sector (debate)

  President. – The next item is the debate on the oral question to the Commission by Esther Herranz García, Albert Deß, Mairead McGuinness, Giovanni La Via, Michel Dantin, Véronique Mathieu, Gabriel Mato Adrover, Herbert Dorfmann, Georgios Papastamkos, Mariya Nedelcheva, Filip Kaczmarek, Jarosław Kalinowski, Béla Glattfelder, Czesław Adam Siekierski, Rareş-Lucian Niculescu, Sergio Paolo Francesco Silvestris, Elisabeth Köstinger, Milan Zver, Peter Jahr and Maria do Céu Patrão Neves, on behalf of the Group of the European People’s Party (Christian Democrats), James Nicholson, on behalf of the European Conservatives and Reformists, and Luis Manuel Capoulas Santos, Paolo De Castro, Stéphane Le Foll and Iratxe García Pérez, on behalf of the Group of the Progressive Alliance of Socialists and Democrats in the European Parliament, on the crisis in the EU livestock sector (O-0141/2010/rév. 1) – B7-0559/2010).

  Esther Herranz García, author. – (ES) Commissioner, thank you very much for being here and for having shown so much sensitivity regarding this very important parliamentary initiative that is so necessary for the European livestock sector.

The sector is particularly vulnerable to the crises affecting EU agriculture as a whole, due to multiple factors: the high costs of inputs, the fall in market prices, imbalances of power in the food chain and the current increase in cereal prices.

The European livestock industry has to deal with these problems just like other agricultural sectors, but with an aggravating factor: the large investments that are particular to this type of production.

As the European Commission is on the verge of presenting its communication on the reform of the common agricultural policy (CAP), I think this is a very good time to send a message of solidarity and concern to this group of producers. In my country, Spain, as in other EU countries, we are talking about a structural crisis, and the cereal price rises have just aggravated a situation that has been dragging on for several years now.

The statistics show that a growing number of farms are being abandoned. However, this should not be the case in the context of global demand that will grow in the next few years thanks to the supposed improvement in people’s standard of living.

With a view to the forthcoming CAP reform, what measures is the Commissioner, or the European Commission, planning, taking into account the specific nature of the livestock sector? I am talking about market measures, and other initiatives to prevent the models of intensive production that respect EU environmental standards being penalised by the future aid system, among other detrimental effects. Common-sense measures should be implemented that guarantee greater security of supply of livestock feed, the establishment of sufficient cereal reserves and the speeding up of the release of those reserves.

Finally, to conclude, I would like to welcome the fact that this motion for a resolution makes special mention of pork and poultry, sectors that do not receive direct EU aid, but for which market and trade measures could also be established to alleviate their situation.

  James Nicholson, author. – Madam President, first of all, I welcome the fact that this issue is being discussed here today. I think it is very timely. At present, the EU livestock sector is experiencing difficulties caused by a range of factors, including rising production costs, competition from imports from third countries, and, of course, various issues which contribute to the rising cost of feed.

Although we have no control over droughts in Australia or severe weather conditions that affect the grain harvest in Russia, I do believe that Europe urgently needs to tackle its lack of self-sufficiency regarding protein crops. We are far too dependent on third countries for our feed and need to begin cultivating more ourselves. However, the situation at present is that we are forced to import a lot of our feed and I have said many times before that I strongly believe that the process of approving new types of GMO grain for import is taking far too long, and feedstuff from soya urgently requires to be speeded up. If this does not happen, livestock producers across the European Union will have to cope with rising prices, volatility and uncertainty for a long time to come.

May I also briefly mention how the situation is affecting the pig and poultry industry. Farmers in this sector are feeling the crisis quite acutely, as their costs are rising and the price of pigmeat is falling. I would like to ask the Commission to monitor the situation closely and utilise all the tools that it has at its disposal to rectify matters.

Beef producers, sheep producers, pig producers, poultry producers are all in a situation where they are making a loss. Need I go on telling the House that all these areas are actually suffering? But I have to say that ultimately, it will be the consumer who will pay because, if all the farmers stop producing, you are going to have to import this food from abroad, with all the problems this entails. So we have got to have security of our own food supply within Europe. If we do not do that, it will be at our own peril.

  Iratxe García Pérez , author. – (ES) Madam President, Commissioner, the profitability of livestock production is directly linked to feed costs. In the growing context of volatile raw materials prices, decision making is becoming very complex for feed manufacturers and livestock breeders, as we saw at the start of the political year.

The meat sector that is having the most difficult time is currently the pork sector. Therefore, I will focus my speech on the serious problems it is facing: the increase in the cost of animal feed, which represents 60% of production costs, and is therefore crucially important in terms of profitability for producers.

In two months, cereal prices have risen by 50%, not due to an imbalance between supply and demand, as there is sufficient production, but due to speculation from outside the sector.

Action must therefore be taken against speculation, along with a policy encouraging the holding of sufficient strategic stock to avoid speculation.

We welcome the fact that grain intervention stocks are being put on the market. We just have to hope that their final destination will be the EU market, otherwise they will not help the livestock sector. A tax on exporting European cereal, as in the case of wheat in 1994, would be a possible solution.

Another problem is the pressure of mass distribution with falling prices, which means that increases in production costs cannot be regained from the sale price.

Producers’ organisations need to be promoted that are capable of positioning themselves in the market, concentrating supply. The Commission is very much aware of the problem, but there is a lack of specific measures, which we hope will materialise in the future common agricultural policy, through efficient and flexible market management mechanisms to combat and act against the problems. This means combating speculation and using specific measures to promote the competitiveness of the sector in the market and increase its weight in the value chain.

I would also like to take this opportunity to ask for the activation of the market measures applicable to pork, export refunds and private storage. The Commission does not think that the situation in the sector justifies this. However, in recent months, there has been a continuous decline in prices, and the prices received by breeders are below the average for the last five years.

I believe it is justifiable for the Commission to trigger the existing market management measures, as some Member States have requested in the Council.

  Dacian Cioloş, Member of the Commission. – (FR) Madam President, my answer will be in two parts, because the problem in the livestock sector relates primarily to the food situation and, hence, to the situation in the cereals market, and then I will also refer to the mechanisms at our disposal for the livestock sector.

The Commission is following the situation in the cereals markets and its repercussions for farmers very closely. Cereal prices increased sharply over the summer due to supply shortages, particularly in the Black Sea countries. Thus, we have seen the price of barley and oats rise to as much as EUR 200 per tonne. At present, even though prices are very volatile, they are still well below the record prices of 2008. The strength of the euro against the dollar, which makes EU exports less competitive right now, is also a disruptive factor in the European market.

Globally, despite the shortage recorded in Russia and Ukraine, the level of cereals harvested is normal, and stocks have been replenished thanks to the last two record harvests. In the European Union, average cereal production is estimated at 276 million tonnes, and if we add to that the stock from the start of the harvest, we have almost 60 million tonnes more than we are expected to use.

The grain intervention stocks, which mainly consist of barley, currently stand at 5.6 million tonnes. A 2.8 million tonne batch has just been set aside for the implementation of the 2011 programme to help the poorest citizens, and the rest will be sold on the internal market shortly. The decision has, in fact, already been taken, and the cereals will be placed on the market at the end of this month.

The pressure on the market has eased somewhat since the Commission announced this measure, which I recently announced to the Council. With regard to the situation in the cereals market, then, no emergency measure can be justified because, as I explained to you, the problem is not one of supplying the European market with cereals, since the high price of cereals on the European market is not due to a lack of market supply.

The Commission is paying very close attention to market developments in the livestock sector, and more particularly in the pigmeat and poultry production sectors. The margins in this sector are, in fact, highly dependent on the costs of foodstuffs. Prices in the poultry sector are above the long-term average and appear to be at least partially offsetting the increased food costs. The price of slaughter pig is following the seasonal downwards trend. It is very slightly below last year’s level. Production is currently well absorbed by the internal market and exports. Between June and August 2010, pigmeat exports were up by 10% and poultry exports by 21% compared with the same period last year. Consequently, despite these price issues, pigmeat and poultry producers have still been able to export for some time.

The Commission will obviously continue to monitor developments in the market and will use the means at its disposal to intervene in the market if this proves necessary and useful. Indeed, two measures are currently available for the livestock sector: export refunds and private storage.

With regard to export refunds, this measure would not be effective at present because the world price is rather high; therefore, an export subsidy cannot be justified. The relationship between the dollar and the euro means that export problems and a lack of competitiveness are possible, but this problem is not exclusive to the agricultural sector. We shall see how the rate between the dollar and the euro changes, and depending on that change, if we have surpluses in the internal market, we can then discuss private storage measures. For the moment, there are no meat surpluses in the internal market, and that is why private storage measures cannot be justified at present. However, I am willing to consider the possibility of resorting to these measures depending on how the markets evolve.

On the issue of volatility, this will be addressed in the common agricultural policy reform for 2013. It is envisaged that this reform will include proposals for as yet non-existent mechanisms to address the issue of income volatility. As for the issue of transparency in the food chain, I am currently examining it with Commissioner Tajani to see how more information in this area could help clarify the way in which added value is shared out. Those are the answers I am able to give at this stage.

  Albert Deß, on behalf of the PPE Group. – (DE) Madam President, Mr Cioloş, ladies and gentlemen, today’s motion for a resolution will help to set the European livestock sector on the right course. I would like to thank Mrs García for this initiative. The objective of the motion is not to cut Europe off from the rest of the world or to override the rules of the market. Its aim is to put in place fair market conditions for the European livestock industry, which will help to ensure food security for more than 500 million people in future. We must ensure that the European agricultural sector is not confronted with new and highly detailed production regulations on a daily basis and that farmers are not required to provide one certificate of competence after another, while maintaining high animal welfare and environmental standards. Rules of this kind apparently do not apply to imported agricultural products.

Therefore, I am grateful to all the 534 Members of this House who voted in Strasbourg in favour of requiring agricultural imports to comply with European consumer protection, animal welfare and environmental protection standards in future. Mr Cioloş, Parliament is ready to give you its full support. These standards must be applied to imports and this is why my group welcomes and supports this motion.

  Paolo De Castro, on behalf of the S&D Group. – (IT) Madam President, Commissioner, ladies and gentlemen, we are here today to call on the Commission to implement suitable efficient and flexible market instruments to combat the crisis into which the European livestock sector has plunged.

We hope that the proposal that the Commission will shortly present on market instruments for the milk and dairy sector will also include proposals to limit the impact of price volatility on the agricultural sector as a whole.

Many actions can still be deployed to send out a strong signal to European livestock breeders. We believe, for example, that it would be very useful to the livestock sector to review the current ban on the use of animal meal for non-ruminants, for example, for the avian and fisheries sectors. As you know, this ban was introduced following cases of BSE but now, a few years on, the scientific community agrees in stating that the ban can only be justified for ruminants. In the case of non-ruminants, conversely, there is no danger to human health and the environment and we therefore hope that this ban may be overturned with the aim of offering these animals a greater possibility of higher-energy diets.

  Liam Aylward, on behalf of the ALDE Group. – Madam President, the livestock sector is an important traditional farming industry which represents the livelihood of thousands of producers across the EU. This sector is central to the socio-economic contribution made by agriculture to the rural areas of the European Union. It is a key agri-industry in Europe and even more so in Ireland, as Ireland is the fourth largest exporter of beef in the world.

In particular, the high cereal prices exacerbate the problems for profitability amongst winter beef finishers, who have a higher dependency on cereal-based feed imports. There are three issues in particular that I wish to highlight: firstly, the necessity that the Commission put in place efficient and flexible markers and measures to curb extreme market price volatility. Action is also needed to close the gap between prices paid by consumers and prices received by producers.

Secondly, it is essential that the Commission steps up measures to support the livestock sector in less-favoured areas, in particular. The next CAP reform must focus on the special vulnerability of certain livestock sectors and the significant production costs that farmers undertake. Under the next CAP, the excessive bureaucratic burden on livestock farmers must be addressed and reduced.

Lastly, European producers comply with the most stringent regulations in the world in terms of food safety and quality, the environment, and animal health and welfare. These high standards must not put them at a disadvantage in comparison to third country competitors. It is crucial for the long term viability of the livestock sector overall that the Commission ensure that their actions on trade and agriculture do not compromise European farmers, but support the sustainability and viability of the European livestock sector into the future.

  José Bové, on behalf of the Verts/ALE Group. – (FR) Madam President, Commissioner, just as in 2007, world cereal prices are soaring, and farmers are seeing a sharp rise in their production costs as they did two years ago. Cattle feed accounts for 60-80% of their costs, and their revenues are plummeting: they survive on an average of EUR 700 per month. Must we wait for successive crises to destroy Europe’s small-scale agriculture before we act? Consumers pay EUR 17 per kilo of rib steak in the supermarkets, while producers receive EUR 3 per kilo – is that right?

On 7 September, Parliament gave its verdict by voting for the report on fair revenues for farmers. It urged the Commission to act swiftly and prohibit selling below purchase price. The MEPs took a stand, in Strasbourg, so as to strengthen producers’ organisations, to stop speculation on the international markets and to control the influence of businesses in the processing and distribution sectors.

Farmers expect even more: they want to see common market organisations established or strengthened, since they are the only means of stabilising costs and providing long-term economic visibility. Next week, Commissioner Cioloş will present his proposal to reform the common agricultural policy; he will have to give some clear answers to farmers. Europe’s credibility is at stake. Europe needs every single one of its farmers.

  Janusz Wojciechowski, on behalf of the ECR Group. – (PL) Madam President, I very much welcome the fact that we are dealing with the situation in the livestock sector, because it is a serious one. I would like to draw attention to the problem which is the subject of paragraph 15 of the motion, namely, the problem of animal welfare.

Standards of animal welfare should be obligatory and should be improved. I am emphatically in favour of ensuring that livestock have the best living conditions possible. However, the welfare of animals involves costs, and those costs are borne by the farmers, and there is a problem with unfair competition where meat products are imported into Europe from markets and third countries where no standards of animal welfare are maintained at all. This has to change. We should introduce these standards here, but we should also resolutely demand high standards – the same as we have in the Union – from all those who export their meat and livestock products to the European market.

  Patrick Le Hyaric, on behalf of the GUE/NGL Group. – (FR) Madam President, Commissioner, lessons really must be learnt from the policies currently in force. The decision must be taken to stop this wholesale liberalisation of agricultural markets, which results in farmers earning, as someone mentioned just now, between EUR 700 and EUR 800 per month – EUR 700 and EUR 800 per month! – while the retail price of meat has risen by 40%.

Make the decision to stop these excessive imports and stop the negotiations on that dreadful agreement to import 400 000 tonnes of beef from the Mercosur countries, as it would destroy entire regions. Have the courage, instead, to protect European agriculture and stop letting the World Trade Organisation decide the fate of our farms.

Implement new tools for regulating production. Say ‘no’ to lethal competition within the European Union itself and introduce fair, stable basic prices, by promoting farming based on grazing. Take action to stop this appalling speculation on cereals. Commissioner, this is urgent; the situation is starting to take a tragic turn in our rural areas. A laissez-faire policy discredits the European project itself.

  Giancarlo Scottà, on behalf of the EFD Group. – (IT) Madam President, ladies and gentlemen, cereal price volatility is having severe repercussions on all livestock sectors but also on consumers.

Cereal exporting is blocked due to the effect of the heat, fires, drought and floods – as is happening now in Italy. To aggravate the situation, Canada has reduced production following heavy rainfall this summer. Prices have been influenced not only by climate change but also by speculation on international markets. Cereal producers who are awaiting a price increase wait before selling their produce and put it in store, with the result that these agricultural products deteriorate. Speculation and severe climate change have led to a great increase in the prices of cereals used as animal feed and a knock-on increase in meat prices.

I believe it is essential for the Commission to ensure timely, targeted action to deal with the volatility in agricultural-product prices through innovative market interventions under the new CAP. The Commission must prevent speculative practices in agriculture to preserve the businesses of farmers and stock breeders and guarantee consumers genuine quality products at fair prices.

  Diane Dodds (NI). – Madam President, I would urge the House to support this extremely important motion before us this morning. It is apparent to those of us who are from rural constituencies, and those who sit on the Committee on Agriculture and Rural Development, that the current position that many livestock farmers find themselves in is simply unsustainable.

This is not an attempt to cry wolf, but if we do not rectify the problems identified within the motion, we will, as a consequence, face higher food prices and be more reliant on third country imports. Countries like China and the United States are all increasingly aware of the importance of food supply security and, as a result, are continuing to increase the support which they provide to agriculture.

In Northern Ireland, the beef price is well below the cost of production. As long as the cost of inputs keeps rising, and extra-regulatory requirements continue to increase, then many farmers will exit the industry, resulting in land abandonment, lack of economic activity in rural areas and a reduction in food production across the EU. It is high time we recognised the importance of food security and the value of the work carried out by farmers across Europe.

Finally, the current trade talks with the Mercosur bloc are having a destabilising effect within the industry. Coupled with difficult market conditionings and increasing costs, the livestock sector has been burdened with the further uncertainty created by reopening of the talks.

The Commission is carrying on the negotiations and, regardless of the utterances of the Trade Commissioner, producers in Northern Ireland so far believe that the results can only be negative for European farmers and the quality of food being provided to the citizens of Europe.

  Rareş-Lucian Niculescu (PPE). – (RO) I think that we need to say right from the start that it is consumers who are the main victims of the crisis we are debating today, and not farmers. It is a known fact that in farming, cereal prices affect approximately 80% of the price of animal feed. This, in turn, affects roughly 70% of production costs. It is impossible to increase proportionally the sale price of meat to the producer. Livestock farmers have no contact with the end consumer, but deal with the processors who always have the option to import. At the same time, processors pass on their large profit margin which they have been accustomed to hitherto in the sale price. Unfortunately, this period is coinciding with a general economic crisis and the decline in the population’s purchasing power is also affecting livestock production.

There is another factor to consider. At a time when farmers will find it difficult to provide feed for their animals during winter, a huge number of them will choose to slaughter their animals, which will help prolong the crisis for more years in the future. In order to maintain domestic prices at a reasonable level and ensure animals receive the feed they require, intervention stocks need to be released. I am therefore pleased by the announcement made by Commissioner Cioloş today. I share the view of my fellow Members who stressed the importance of growing new genetically modified organisms to provide cheap feed for animals and reduce the dependency on imports.

Last but not least, today’s debate is closely linked to the future of the common agricultural policy. We need a strong common agricultural policy which is well financed and well managed, and which can accommodate both structural development and modernisation measures, as well as market and direct support measures.

  Luís Manuel Capoulas Santos (S&D). – (PT) We are all aware of the enormous difficulties that the European livestock sector is undergoing, the pig-farming sector in particular. This situation has a number of causes that are very clearly spelt out in the text of the resolution that we are debating today, the most important of which is high cereal costs.

The European Parliament cannot remain indifferent to this situation. It is therefore necessary to act immediately using the available mechanisms, and on this issue, I welcome the Commission’s decision to release 2.8 million tonnes of cereals, a measure that is positive but manifestly insufficient. New instruments must be found in the short and medium terms, for combating speculation in particular; in fact, the Commissioner has just said that that is the crux of the problem. Long-term solutions will need to be found in the context of the debate that we are about to begin on the new common agricultural policy. I therefore call on the Commission to take into account the recommendations made in the resolution signed by several political groups, including my own, because action is needed, in fact, and needed very quickly, Commissioner.

  Martin Häusling (Verts/ALE). – (DE) Madam President, Mr Cioloş, there is no question that the crisis must be resolved. However, this motion proposes solutions which we cannot support. Making the import of GM soya easier will not help to resolve the crisis in the livestock sector. On the contrary, we must begin to redevelop our own source of plant protein in Europe. Around 75% of our plant protein is imported. This is not acceptable and we need to introduce urgent changes.

I also do not understand why many people are questioning the compromise which has been negotiated by all the groups and why they want to open the door to GM soya imports. That is not a solution. We also need to discuss what type of livestock farming we want in Europe. Once again, the small farms have been hit hardest by the crisis. On the other hand, industrial-scale livestock farming is developing in Europe which is not livestock friendly and which is not fair in agricultural terms. We ultimately need to do something in this area as well.

My final point is that I am very surprised that EUR 450 million from the agriculture budget is being transferred to the ITER nuclear fusion project. I would like Mr Cioloş to explain what we should think about this.

  Bairbre de Brún (GUE/NGL). – (GA) Madam President, the result of the substantial increase in the costs relating to animal feed is instability within the European agricultural industry. The fluctuation of prices has an adverse effect on an already vulnerable livestock industry. The increase in costs of compound feed is pushing up production costs for the livestock sector, and more flexibility is needed in respect of assistance to this sector.

It is time for the Commission to propose measures for reducing price instability and stabilising the price of feed. I am glad to hear from the Commissioner that he is considering a new instrument to deal with price volatility post-2013. Appropriate measures and instruments are needed now too.

  John Stuart Agnew (EFD). – Madam President, I support Mr De Castro’s remarks about meat and bone meal; deregulation in this area is highly necessary. The British livestock sector is struggling with high feed costs at present, and this is not helped by impediments which are placed in our way by the Commission. Top of the list is the individual electronic identification of sheep – a rule which is not applied to many other Member States, and nor is it a requirement for imports of sheepmeat from third countries.

The impending ban on battery cages is producing huge distortions in our egg market, as caged eggs from non-compliant Member States can undercut our more expensively produced colony eggs. We have producers in this area running the two systems side-by-side before the deadline to try to recoup some of the GBP 400 million pounds we have spent complying with your rules which, of course, is putting more eggs on the market.

Overhanging the entire British livestock sector like a lead balloon is the spectre of the EU opening bilateral trade talks with Mercosur. The British livestock farmer will be the sacrificial lamb in this deal and we are not happy about it.

  Béla Glattfelder (PPE). – (HU) There are many reasons for the crisis in the livestock sector. Those who say that one reason is the unfair competition caused by imports and mention the dangers of the Mercosur negotiations are right. I wish to raise the issue of the surge in grain prices. It was foreseeable that grain prices would rise, and I have said this several times here in the European Parliament too. The European Commission has done nothing to prevent this. One reason for this problem is the reduction in intervention, which was a serious mistake. We must wake up to the fact that global grain trade is concentrated in the hands of fewer and fewer companies. Incidentally, the same thing is happening in many of the EU Member States. The European Union decided not to keep emergency stocks, a decision which will further increase speculation in the future.

The fluctuation of grain prices causes losses not only to grain producers but also to livestock breeders and consumers. In addition to this, the costs are also borne by European taxpayers. Remember that the European Union sold the 2004/2005 intervention stocks at an enormous profit. Grain prices were low in the past period. If the European Union had intervened then, a huge profit could now be realised from the sale of grains, which would also help livestock breeders. However, we have no such stocks, and this is not only bad for producers and consumers, but it also means that the European Union is deprived of the opportunity of providing aid to countries afflicted by famine, such as Pakistan.

  Csaba Sándor Tabajdi (S&D). – (HU) Firstly, Commissioner Cioloş’s efforts for the European Union to establish, at last, an appropriate protective mechanism against the global volatility of food prices deserve full support. Secondly, the high grain and animal feed prices point to the emergence of a shortage of protein in the European Union, on which Mr Häusling will draft a report. Thirdly, the fact that the common agricultural policy system is distorted, it over-subsidises grain farmers, and supports neither pig nor poultry farmers or livestock farmers in general, is another factor contributing to the current livestock crisis. Fourthly, livestock keepers are at a disadvantage in the supply chain compared to processors and traders. Fifthly, livestock keepers are forced to make disproportionately large environmental protection investments. This is particularly serious in the new Member States. This, too, should be addressed and remedied.

  Herbert Dorfmann (PPE). – (DE) Madam President, Mr Cioloş, ladies and gentlemen, I would like to thank Mrs García very much for this initiative and I would also like to refer specifically to the situation of livestock farming in mountain areas. In many regions of the European Union, there are agricultural alternatives to livestock farming, but this is generally not the case in mountain regions. If there were to be no grazing stock in the mountains, then many of the agricultural areas there would simply be useless and would be abandoned. This would not only restrict the business opportunities in mountain regions, but would also change the landscape and eventually reduce biodiversity.

The dairy sector plays a special role in this respect, because it creates jobs and generates income in mountain regions and in other areas. This is why I believe that we must focus specifically on three issues in the reform of agricultural policy. We need a common agricultural policy (CAP) which takes into account livestock farming in mountain regions and provides subsidies to livestock farmers there. Secondly, we need a flexible second pillar of the CAP which makes it possible to provide special support for livestock farms in mountain areas. Thirdly, we need a quality policy which focuses, in particular, on products from mountain regions and which provides options for special labelling, so that added value can be obtained on the market for these products from the livestock sector in mountain areas.

  Luís Paulo Alves (S&D). – (PT) We are probably on the way to another commodities bubble. Prices on the international market have increased by more than 16% on average since June. Never has there been so much negotiating on the futures market, nor has there been so much money involved. Extremely low interest rates and too much money in search of good deals are leading to an increase in dealing and financial speculation on futures contracts, without any contact with the real economy. The figures for the largest cereals exchange in the world, the Chicago Mercantile Exchange, are impressive, and transaction records are being broken in purchases of soya, maize and wheat. The practical result is the transfer of these increases to real market prices, even in a year when cereals are widely available. These increases in animal feed prices are causing terrible damage to the already difficult situation of many of our livestock farms, which will be unable to pass on the increases in what they sell because of the crisis and are unlikely to be able to absorb them. It is, therefore, time to take action and protect our food from financial speculation. I would like to know, then, what the Commission intends to do about this.

  Michel Dantin (PPE). – (FR) Madam President, Commissioner, ladies and gentlemen, what a funny old world the agricultural world is! A year ago, in this Chamber, we were all bemoaning the general production situation. Today, one production sector, the cereal sector, is doing better than the others – and I think we should, all the same, welcome that. However, its success is unfortunately having very serious repercussions for another sector, the livestock sector.

The real issue today is the agricultural industry’s inability to pass on the costs it has to incur to consumers. Therefore, as has already been said this morning, we need to help organise producers so that they can make their presence felt in their dealings with their customers and, in particular, in their dealings with the large-scale distribution sector.

However, the chain, the functioning of the markets is more pernicious. How can we explain the fact that, for years, decades, we said that South American countries were placing a strain on production and bringing prices down? How can we explain that, although prices are today increasing again in those countries, we cannot pass on that increase to our producers because, yes, there has been an increase in costs, but – and this must also be said – there has been no increase in producer prices?

How can we fail to mention the cost differentials that exist between our countries? Admittedly, this is partly a question of national responsibilities. However, the dumping that goes on today between our various countries helps destabilise markets, and I believe that Europe should tackle this issue.

Yes, solutions must be found. European cereal producers are aware, I think, of the situation faced by their main customers – farmers. They are prepared to enter into a contractual agreement. Are you prepared, Commissioner, to support that agreement?

  Alan Kelly (S&D). – Madam President, again we are here having a debate about farmers’ incomes being destroyed by markets that are, to be quite frank, slightly dysfunctional in make-up and also cannot cope with major shocks like the grain price hike we are seeing. Surely it is time our farming and market system was stronger and I hope the Commission and the Commissioner notice yet again that the political groups in this House are further calling for an adequate CAP budget post-2013.

The costs of inputs and overbearing regulations are making EU farms uncompetitive and the viability of our farm sector is deteriorating. Our grassland system of quality and environmentally sustainable beef production is being undercut by third country imports. We must give our farmers a fair chance and, in my experience, that is all they want. The EU’s lack of self-sufficiency in grain is becoming a serious issue, not just for the beef but also for the pig and poultry industries. This motion is a statement of the seriousness with which this House takes ongoing developments in our agricultural markets. We as a Parliament must intervene when we feel the situation is urgent and, to be quite frank, Commissioner, our beef, poultry and pig sectors immediately need positive intervention. I look forward to your response.

  Jarosław Kalinowski (PPE). – (PL) Madam President, Commissioner, the situation this year is teaching us that an appropriate level of cereal reserves is essential to ensure food security and market stability. This security should be guaranteed by appropriate decisions at EU level.

Another very important matter is the search for new sources of protein – this is a very good route towards the independence of European agriculture. We must, therefore, promote the cultivation of protein-rich crops. Let us remember, however, that it is our unconditional obligation to guarantee farmers permanent access to feed. For this reason, I support the motion which calls on the European Commission to establish a minimum threshold for the level of unauthorised varieties of GMOs permissible in imports of soya. Continuation of the policy of zero tolerance constitutes a threat to the entire food production chain.

  Kriton Arsenis (S&D). – (EL) Madam President, there are currently two threats to global livestock farming and food. On the one hand, we have the seed monopolies, and we have seen the disastrous consequences of modified seed in this sector in India. On the other hand, we have the games played by financial organisations with the prices of basic products.

In 2008, we had the biggest global production of cereals. In 2008, and here lies the absurdity, unless it is explained by financial games, we had the biggest food crisis, a food crisis that caused social disruption and the loss of many human lives. We need to monitor these two issues. We need to increase local resources, ensure that farmers have free access to seed and that livestock farmers also pay lower prices, and regulate the operation of financial organisations.

  Izaskun Bilbao Barandica (ALDE). – (ES) Madam President, livestock farms are suffering the consequences of the crisis. Moreover, they have to comply with the strictest standards in the world, increasing their production prices, with the disadvantage that this gives them in comparison with third countries. I therefore think that the common agricultural policy firstly needs to guarantee sufficient funding after 2013 in order to ensure the viability of agricultural producers and breeders. Secondly, it needs to adopt specific measures for breeders that use sustainable protection measures. Thirdly, it needs to strengthen the measures to support the livestock sector in the most disadvantaged areas. Fourthly, it needs to stipulate that imports from third countries meet EU standards in order to prevent unfair competition.

Finally, I ask the Commission to defend the interests of European producers in all trade negotiations, in order not to endanger the production of the livestock sector. Failing to adopt these measures could mean that Europe becomes a region without a sector that is dependent on imports and third countries.

  Struan Stevenson (ECR). – Madam President, the crisis in the EU’s livestock sector has hit farmers hard in Scotland and there are many things we could do to help. Firstly, we could reduce the regulatory burden. It is madness that we apply more stringent red tape and regulation to our own EU producers than we apply to our competitors outside the EU. Our farmers are bound hand and foot by red tape, and yet we import vast quantities of foodstuffs produced under welfare and hygiene conditions that would constitute a criminal offence in the EU.

The high cost of complying with all of this red tape is not reflected in the prices our beef farmers are getting for their cattle. British beef is now being sold well below the cost of production; lowland suckler-cow producers reckon they are losing around GBP 260 per cow; our dairy farmers have suffered a long spiral of decline. We have to stop the rot.

  João Ferreira (GUE/NGL). – (PT) The increase in cereal prices is another factor that is adding to and exacerbating the crisis in the livestock sector. The current common agricultural policy and the European Union’s trade policies do not ensure a fair income for farmers, particularly small and medium-sized producers, nor do they prevent the effects of the increasing costs of the factors of production and the volatility of agricultural product prices: they worsen them instead. This volatility has causes that are not only, or even mostly, natural: amongst these is speculation on foodstuffs. Any measures that are taken in this area will always be limited in scope if they do not include banning the instruments that make it profitable, specifically derivatives. Safeguarding production, the right to produce, and food sovereignty and security require an end to the subjugation of agriculture and food production to the market and competitiveness. It requires effective measures for regulating and intervening in the markets, without which price volatility will get worse and concentration processes will occur, only to be survived by a small number of large producers.

  Dacian Cioloş, Member of the Commission. – (FR) Madam President, I am very pleased to see the interest shown, including in the European Parliament, in a sector that is essential not only for market supply, but also for the stability of our regions: I am talking about the livestock sector.

The answers to many of the issues and problems raised will no doubt be found in the proposals that the Commission will shortly be presenting on the future of the common agricultural policy. Parliament will also be able to discuss these proposals as early as next week. We will doubtless also address in them the issue of the fair distribution of aid among the various sectors, including the livestock sector. We will also address the issues of support for the livestock sector in more specific and more difficult areas and of mechanisms for managing income volatility. However, some specific questions have been asked which I should like to answer. The first one concerns the problem of cereal prices and intervention stocks.

It is true that we no longer have the intervention stocks we had in the past, but this is because prices are higher now. Market intervention cannot be justified when prices are high. I believe that we must consider other kinds of mechanisms and, although stocks can play a part, we shall have to consider types of stock other than the intervention stock on the market that we had in the past. This issue should perhaps be dealt with at an even broader level than the European level alone, given that the market is now more open than in the past.

On ITER, Mr Häusling: just because part of the 2010 budget has not been used for agriculture and is going to ITER does not mean that we do not have the resources to intervene in the agricultural sector. I can assure you that these additional funds that are going to ITER have not been taken from any CAP mechanisms; this money is still available and has not been used, because there has been no need to use it. Even with this transfer, however, I can assure you that we have the budget we need to be able to apply the requisite measures.

I shall conclude by saying that the issue of volatility – and the impact that speculation on the market has on volatility – is one that the Commission is addressing more extensively, for derived products and commodities alike. I am working with my colleague, Mr Barnier, on this issue. The Commission will present some proposals.

As for the distribution of added value along the food chain, together with Commissioner Tajani, we will organise a first meeting of the High Level Group on this issue no later than next week.

  President. − I have received four motions for resolutions⁽¹⁾ tabled in accordance with Rule 115(5) of the Rules of Procedure.

The debate is closed.

The vote will take place shortly.

Written statements (Rule 149)

  Sandra Kalniete (PPE) , in writing. – (LV) These days, Europe’s livestock farmers are experiencing difficulties that we must all overcome together in order to enable the livestock sector to develop and generate enough revenue for farmers. In the last few months, there has been a significant increase in cereal prices, made more acute by extraordinary events, such as the floods in Pakistan and the forest fires in Russia, for example. Of course, we have no influence over these climatic disasters, but it is within our power to draw up legislative proposals that could help Europe’s farmers to overcome the consequences of these cataclysms. What is certain is that we can and must restrict speculation in cereals, which is also one of the causes of these difficulties. It is intolerable that such dishonest dealings cause losses for a sector that is one of the foundation stones of European agriculture. I should additionally like to remind you that it is essential for the Commission to defend the interests of European farmers in its discussions with the Mercosur nations on a new trade agreement and to ensure the conditions for fair competition. I call upon the Commission to begin working actively to help European farmers to overcome the existing difficulties in the livestock sector, as our support is vital for farmers.

  Franz Obermayr (NI), in writing. – (DE) The livestock sector presents a number of problems for European farmers, including the rising cost of inputs, competition from third country imports, major fluctuations in feed costs and relatively low prices for meat. If we are to put in place a lasting policy for the livestock sector, we must take into consideration all the stakeholders, including farmers, consumers and the animals themselves. The objective must be to move away from industrial-scale livestock farming and towards more natural, respectful treatment of animals on small farms. All of this must be combined with the highest possible levels of safety for consumers in the form of comprehensive animal health services and clear labelling of all food products from animals, in particular, with regard to their origin and the way in which the animals are reared. The EU must put in place the basic conditions needed to safeguard the future of our farmers so that they can stay competitive internationally and their businesses can remain economically viable, despite the fact that we have the strictest animal welfare standards in the world.

  Pavel Poc (S&D), in writing. – (CS) The increase in cereal prices is also a threat to the livestock sector in the EU on account of its dependence on feed imported from third countries. The situation is critical in the area of pork production, where feed accounts for 60% of production costs, but rising costs may gradually threaten all branches of livestock production in the EU. Europe should therefore reduce its dependence on the import of feed from third countries.

It is surely no solution to switch to genetically modified feeds imported from the US. In the EU, it takes almost two and a half years to approve such feeds, in Argentina around three years, in Brazil three to five years, and China is also adopting strict measures in this area. In the US, on the other hand, approval takes only 15 months. The crisis in the EU livestock sector must not be exploited for the commercial ends of US companies, which see significant export potential in the European market.

The European Union should aim to reduce production costs, to ensure that third countries comply with EU standards, and to ensure that producers get a decent price for their products. It is not acceptable for consumers to bear the consequences of higher prices, for producers to receive ever less money and for distributors to make ever greater profits.

I do not agree with the Commission’s view that no urgent measures are required, because we are facing a structural crisis which needs solving, and not only from the perspective of food security.

  Daciana Octavia Sârbu (S&D), in writing. – (RO) European livestock farmers have been facing ever-growing difficulties recently. They are finding it difficult to cope with competition from third countries as the latter do not comply with the high standards which local producers comply with, and they are always victims of the European Union’s commercial negotiations. However, we hope that we will see a different attitude adopted by the European Commission in future because it is not normal for European farmers to always lose out as a result of commercial agreements. The Commission also needs to be more involved in strengthening producer organisations in all livestock sectors, in order to enable them to negotiate better prices for their products, while taking into account production costs. At the same time, I call on the Commission to release as quickly as possible cereals from the intervention stocks to support this sector which has been hit hard by the crisis.

(The sitting was suspended for a few minutes)

IN THE CHAIR: ALEJO VIDAL-QUADRAS
Vice-President

(1) See Minutes