on The Common Agricultural Policy and Global Food Security

(2008/2153(INI))

The European Parliament,

–   having regard to Article 33 of the EC Treaty,

–   having regard to its resolution of 25 October 2007 on rising feed and food prices(1), as well as its resolution of 22 May 2008 on rising food prices in the European Union and developing countries(2),

–   having regard to its resolution of 29 November 2007 on advancing African agriculture - A Proposal for Agricultural Development and Food Security in Africa(3),

–   having regard to 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),

-    having regard to the communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions - Tackling the challenge of rising food prices - Directions for EU action (COM(2008)0321),

–   having regard to the Conclusions of the 1996 World Food Summit and the objective of reducing by half the number of people suffering from hunger by 2015,

–   having regard to the Agricultural Outlook 2008-2017 released by the Food and Agricultural Organization (FAO) and the Organisation for Economic Co-operation and Development (OECD),

-    having regard to the recommendations of the International Assessment of Agricultural Knowledge, Science and Technology for Development (IAASTD),

–   having regard to the outcome of the "Health Check" of the Common Agricultural Policy,

–   having regard to the ongoing WTO negotiations on the Doha Development Round,

-    having regard to the Paris Declaration on Aid Effectiveness,

–   having regard to Rule 45 of its Rules of Procedure,

–   having regard to the report of the Committee on Agriculture and Rural Development and the opinions of the Committee on Development, the Committee on Foreign Affairs, the Committee on International Trade and the Committee on Industry, Research and Energy, (A6-0505/2008),

A. whereas, for the first time since the 1970s, the world is facing an acute food crisis, determined by both structural, long-term factors, as well as by other determinants, with world maize prices tripling since 2006 and world wheat prices increasing by more than 180% in the time span of two years, and an overall global food price increase of around 83%,

Β. whereas the significant, unforeseen price surge has taken place within a relatively short time, between September 2006 and February 2008; whereas, furthermore, world prices of other foodstuffs have doubled in the last 2 years and are expected to remain high, despite the current fall in prices of some cereals, as shown by the futures market,

C. whereas the rise in prices of animal feed increases the cost of production, which entails the risk that production of stockfarming products will fall when demand for them is rising and is forecast to continue doing so, particularly in the emerging economies,

D. whereas the FAO and the OECD predict that, while commodity prices may fall from the higher levels of the past year, they are not expected to fall back to pre-2006 levels; whereas, however, dramatic fluctuations in commodity prices may be a more pronounced and regular feature of the global market; whereas higher food prices do not automatically translate into higher farm incomes mainly due to the speed at which farm input costs increase and the increasing divergence developing between producer and consumer prices,

E. whereas world food stocks have fallen to critically low levels, from one year’s supply of food in stock after World War II to just 57 days in stock in 2007 to only 40 days in 2008,

F. whereas these and other factors have had immediate and serious consequences for a significant number of people; whereas, globally, the food price crisis has pushed millions more into poverty and hunger; whereas these developments have sparked riots and unrest around the world, further destabilising countries and regions around the globe; whereas, even in the EU stocks have been depleted in such measure that the emergency food programme has, at present, no more food to distribute,

G. whereas, according to current estimates from organisations fighting world hunger, in developing countries one person in five is currently undernourished and suffering from chronic hunger and each day over 30 000 children in the world die of hunger and poverty,

H. whereas agriculture provides employment and a livelihood for more than 70 % of the labour force in developing countries, and for more than 80 % in many African countries, and, as a consequence, rural development policies are essential in order to tackle poverty and hunger effectively,

I.  whereas women produce between 60 % and 80 % of food in developing countries and are responsible for half of the world’s food production; whereas women play an extremely important role in caring for their families; and whereas women have much less access to land and to means of production than men and must therefore be given appropriate help and support,

J.  whereas the present crisis impacts most heavily on low-income households in both the European Union and in the developing world, where the proportion of household income spent on food represents between 60 and 80 % of total income, in comparison to the EU average of less than 20 %,

K. whereas Parliament and the Council have called repeatedly for a strong response to the global problem, providing, in particular, the necessary financing for agricultural inputs and assistance in using market-based management instruments,

L. whereas the European Union remains a major food producer, accounting for 17 % of the world’s wheat, 25 % of world’s milk production, 20 % of the world’s pigmeat production and 30 % of the world’s beef production; whereas it is also a major importer of agricultural products, falling significantly short of self-sufficiency in numerous agricultural commodities,

M. whereas the European Union leads the way in setting food production standards at the highest level, concentrating on the farm to fork traceability system and guaranteeing the safety of EU produced food,

N. whereas the European Union is also a leader in environmental protection initiatives, which serve to protect natural resources, but which also lead to additional cost burdens for EU farmers,

O. whereas the European Union is the leading global donor of development and humanitarian aid, but at international level the share of aid allocated to agriculture, particularly from the European Union, has constantly diminished since the 1980s,

P. whereas the European Union traditionally finances around 10 % of worldwide development cooperation, in addition to Member States' contributions; this is confirmed by the current contribution through EC instruments (around EUR 1.8 billion: EUR 1 billion through the new facility for rapid response to soaring food prices in developing countries and the rest through currently available development and humanitarian aid instruments),

Q. whereas, against a background of pressure on natural resources, global food demand is expected to double by 2050 and global food production will need to increase,

R. whereas, according to the FAO, an investment of EUR 30 billion per year would be enough to ensure the food security of a world population which will reach 9 billion by 2050,

S. whereas present international and regional agreements have proved incapable of normalising market supply and trade; whereas the recent surge in food prices should be a wake-up call for governments throughout the world that agricultural production is not to be taken for granted,

1.  Affirms that global food security is a question of the utmost urgency for the European Union and calls for immediate and continual action to ensure food security for EU citizens and at global level; considers it important to recognise the value of all the world’s farming and food cultures; stresses that food should be available at reasonable prices for consumers, while at the same time a fair standard of living for farmers should be ensured;

2.  Stresses the importance of the Common Agricultural Policy (CAP) as the means to secure food production in the European Union; believes that the CAP has provided EU citizens with a secure food supply since its inception in 1962, in addition to protection and enhancement of the rural environment and EU food production standards that are the highest in the world; stresses the need for Community agriculture to continue to play that role in the future;

3. Notes, however, that over the past 25 years the result of the many CAP reforms has been a reduction in agricultural output in the European Union, with a shift in emphasis from quantity to market-led, quality production; believes that this policy shift has resulted in a loss of potential market opportunities for EU producers and has lead to an increased reliance on imported food from outside the European Union, produced to very different production standards, thereby exposing EU agricultural products to unequal terms of competition;

Situation and causes

4. Points out that, prior to the most recent hike in food prices, over 860 million people globally experienced chronic hunger; notes that the World Bank predicts that the surge in food prices could push an additional 100 million people into deeper poverty;

5. Recognises the Food and Agriculture Organization (FAO) view that net food-importing countries are hardest hit by rising food prices and that many of these countries are the world's least developed; reaffirms the fact that poverty and dependence on food imports are leading causes of food insecurity; is mindful of the fact that only a small percentage of global food production is actually traded on the international markets, increasingly from a small number of exporting countries;

6.  Notes that harvests for staple cereals for 2007 and 2008 have been good; notes that the immediate problem of food insecurity in 2007 was due to the fall in supply and the increase in basic commodity prices; is deeply concerned by the low levels of global food stocks which, at present, provide only enough grain for the entire world for less than 40 days;

7.  Stresses that efforts to meet people's basic needs, in particular as regards food and water, can often be a source of conflict; notes that the growth in the world's population, which is expected to rise by 3 billion by 2050, will exacerbate such tensions in all regions of the world; calls, accordingly, for this geo-strategic factor to be taken into account in the future formulation of agricultural policy;

8.  Notes with concern the escalating costs of farm inputs (price-increases in fertilisers, seeds etc.) which have translated into a rise in costs for which farmers (particularly in the livestock sector) have not all been equally compensated and which significantly eroded any potential increase in farm incomes arising from the higher commodity and food prices, thus eroding the stimulus to increase production; is concerned that dramatic increases in input prices could result in less usage and potentially reduced output which will exacerbate the food crisis in Europe and the world;

9.  Notes that commodity markets have seen a sharp fall in prices in the current season, leading to producer concerns and eroding confidence among farmers;

10. Stresses the importance of a comprehensive analysis of rising food prices, taking into account rising energy prices for end consumers, stronger weather phenomena and increased demand for energy owing to the increased global population, and calls on the Commission to investigate further the possible link between high food prices and rising energy prices, in particular for fuel; Further stresses that steps must be taken to reduce the dependence of agriculture on fossil energy sources by using energy more efficiently and developing energy-saving systems of cultivation;

11. Calls for policy instruments aimed at averting such dramatic and damaging price fluctuations, and which are conscious of the need to provide a fair standard of living for producers; believes that the system of Single Farm Payment provides the opportunity for farmers to switch production according to market needs but may be insufficient to cope with dramatic market price fluctuations;

12. Draws attention to the longer term structural causes at play in the recent price increase of agricultural commodities, including steadily increasing global demand and sustained reductions in investment in production agriculture; notes that, among these factors, the increase in the price of energy, and in particular in the oil price, has had a major impact on global agricultural production (due to increasing farm-production and food-distribution costs) and on the occurrence of food crises in the poor countries (due to food transport costs within these countries);

13. Notes that 2% of EU cereal production was diverted to biofuels in 2007, compared with 25% of US maize production going to ethanol production in that year; calls for a global assessment of this trend and the impact on food prices and for policy coordination at the global level to ensure that food supply is not jeopardised by the push for renewable energy production; calls also for the inclusion in international and regional agreements of commitments that the subsidies granted for biofuel production will not jeopardise world food security and will be consistent with applicable rules so as not to affect competition between trading partners; calls, nevertheless, for firm commitment from the European Union in promoting second generation biofuels;

14. Emphasises the need to strike a balance between the production of biofuels and bio-energy on the one hand, and the requisite global food reserves on the other. The increase in biofuel and bio-energy production can have a positive impact on the agri-foods sector, which is currently feeling the effects of the high prices of raw materials necessary to the processing industry, such as fertilisers and diesel oil, etc. The development of renewable energy sources is therefore a viable economic and social development alternative for rural areas and one that simultaneously offers a sustainable approach to environmental protection, especially if one factors in the European Union's 2020 targets for renewable energy. At the same time, however, measures need to be taken to ward off the adverse effects that the increase in the production of energy crops may have on biodiversity, food prices and land-use patterns;

15. Notes that the European Union has made a considerable contribution to increasing the supply of agricultural commodities by abolishing its set-aside scheme;

16. Draws attention to rapidly changing consumer eating habits, particularly in emerging countries with a shift towards more meat and protein consumption requiring more grain; notes also the welcome increase in real income in countries such as China and India, which will continue to drive the demand for agricultural goods and processed foods;

17. Believes that increasing market concentration in the food retail sector needs to be monitored to prevent it leading to the development of monopolies, as the activities of large retailers may not always be in the best interests of producers, processors or consumers;

18. Calls for the adoption of alternative solutions that adjust the balance in favour of small farmers, who find themselves unable to negotiate with the large retailers. Despite the existence at EU level of an anti-monopolies legislative framework that prevents big producers abusing dominant positions on the EU market, there are as yet no specific regulations for combating the monopolistic practices carried on by supermarkets and hypermarkets;

European Union responses

19. Believes that the CAP should remain the cornerstone of EU food-security policy now and beyond 2013; considers that functioning ecosystems, fertile soils, stable water resources and a diverse rural economy are essential in the interests of long-term food security; considers also that it is of fundamental importance that the CAP, together with other Community policies, should play a greater part in the world food balance;

20. Strongly believes, however, that the CAP should be further adapted to meet food-security concerns; is disappointed that, in its Health Check proposals of May 2008, the European Commission has not fully faced up to the challenge; is opposed to the dismantling of market management measures and cuts in farmers’ support payments;

21. Calls, in light of the 2008-2009 Budget Review, for a stable and constant level of EU and Member States' expenditure on the CAP guaranteeing a fair income for farmers; recalls that farmers need a stable policy environment in order to plan for the future; stresses that the basic principle of such a policy is an income safety net against risks and crises arising either from adverse natural phenomena or from market distortions and an unusually long and widespread fall in prices; points out, in this respect, the fact that agriculture brings a significant added-value to national and EU economies;

22. Points out that the market alone cannot provide the income security for producers which they need to continue farming because of the high cost of compliance with EU food production, food safety, environmental and animal welfare standards; welcomes, however, the increased market orientation of the CAP; regrets, on the other hand, that the objectives of the 2003 reforms to provide higher market prices and less bureaucracy for farmers have not been fully achieved;

23. Believes that the numerous cross-compliance rules provide a disincentive to producers and that, where possible, these rules should be made less complex; welcomes, in this respect, the Commission’s simplification initiatives;

24. Is alarmed that proposed EU legislation (for example on plant protection products) may have a dramatic impact by reducing the tools available to farmers to maximise yields and may, in effect, lead to a dramatic reduction in EU farm output; calls for a detailed impact assessment - in particular on the implications for food security - of all proposed measures;

25. Urges the Commission to look at the impact of climate change mitigation initiatives in the agriculture sector; considers that farming must make its contribution to efforts to combat climate change but must also receive resources in order to tackle the impact of climate change, being one of the most climate-sensitive sectors of the economy, in order not to depress EU farm output and result in its being replaced with imported production;

26. Believes that there is a need to review EU and other international production and market monitoring systems to provide a more rapid alert mechanism to determine production trends; believes there is a need for a global food inventory regime and a global system of food stocks and that the European Union should take the lead in devising such a system; urges the European Commission to act with global partners and to come forward with a proposal in this regard;

27. Calls for effective insurance policies to be made available, protecting against massive price and income fluctuations as well as weather-related impacts on production;

28. Calls on the Commission to devise an effective EU market monitoring system capable of recording the changes and trends in the prices of agricultural products and the cost of inputs; maintains that such a system must ensure transparency and facilitate cross-border comparisons of similar products;

29. Considers that an international observatory should be set up within the FAO to facilitate the monitoring of prices of agricultural products, inputs and food at international level;

30. Notes that, through successive reforms of the CAP, trade distorting elements of EU agriculture policy negatively impacting on farmers in the developing world have been addressed, but that trade relations remain unequal and that efforts still need to be made to construct a fairer system;

31. Notes, however, that EU policy reforms to meet WTO requirements have led to a reorientation of CAP supports away from production-linked payments, dismantling of market management measures and the opening up of markets, leaving consumers and producers increasingly exposed to world market instability; calls for policies under the CAP to incorporate provisions on food security and for trade agreements to incorporate equal commitments from partners to regulate trade in a way that does not jeopardise world food security; calls on the Commission, at the WTO negotiations, to advocate qualified market access, which will ensure that the high environmental standards of EU farming and the right of every State to food security are not undermined by cheap imports;

32. Notes that the European Union is pushing ahead with its commitments to abolish all export refunds by 2013 and that through the CAP Health Check further reforms of the market support instruments are being pursued, in line with WTO agreements;

33. Considers that the financing facility for rapid response to soaring food prices in developing countries is a necessary first step to tackle the immediate needs of those most affected by the food crisis; stresses, however, that this facility is a one-off measure designed to target funds from Heading 4 of the EU budget towards small-scale agriculture in the worst hit countries which will need to be reinforced by further investment; considers that the Commission should audit how the money is spent and ensure that it is always used where the need is greatest, and that regular reporting to Parliament should be carried out; furthermore, requests that Parliament have regular oversight of implementation, through the 'regulatory procedure with scrutiny';

34. Calls on the Commission to reinforce its present programmes designed to ensure food security in Europe and around the world; calls for a reinforcement of the Food Security Thematic Programme (2007-2010), currently endowed with EUR 925 million for the entire programming period; welcomes the proposal for an increase in the budgetary allocation for the Food Distribution Programme for the Most Deprived Persons of the Community (MDP) presented by the Commission on September 17, 2008; calls on the Commission to adopt a comprehensive strategy on food security issues so as to achieve coherence among all Community policies;

35.  Is alarmed by the current global financial crisis which may result in a reduction in finance available for farming; calls on the European Commission to analyse the effects of the financial crisis on the agricultural sector and to consider proposals to ensure the stability of the sector, also in terms of access to loans and credit guarantees;

36. Points to research which shows that consumers are for the most part unaware of the vital benefits provided through the CAP by way of food security and reasonably priced food(4); calls for citizen information policies and a renewed commitment to simplification, which would result in an increased awareness of the instruments and benefits of the CAP; proposes that the costs of not having a common agricultural policy should be explained to the public;

37. Believes that the CAP should play a significant role in the European Union's foreign affairs and development policies with special regard to the external food security policy; believes that, besides securing the European Union's food production, the CAP can contribute to meeting the increased demand for food globally;

38.     Notes that armed conflicts impact very negatively on production of and access to food; expresses its concerns about the serious consequences of conflict-proneness as regards food security, e.g. through mass migrations, paralysis of agricultural production, detrimental impact on vital infrastructure;

39.     Believes that it is crucial to avoid disruptive competitive scrambles for scarce food resources; therefore calls for more effective EU coordination with non-governmental organisations, the FAO and other international agencies at a technical level and with the UN at a political level to promote fair access to global food resources and to increase food production in key developing countries while consistently taking into account biodiversity and sustainable development criteria;

40.     Urges the European Union to help countries at risk of conflict to develop strong agricultural policies of their own based on easy access to raw materials, quality education and adequate funding, as well as on reliable infrastructure; believes that EU aid should be targeted at improving self-sufficiency with regard to food for recipient developing countries, which will improve regional food security and access to food for the poorest sections of society;

41.     Notes that some growing economies might be planning to lease large tracts of land in poorer parts of Africa and Asia for the purposes of growing crops and shipping them back to their markets so as to improve their own food security; believes that, together with the FAO, the European Union must take this phenomenon seriously as a major threat to food security and to effective agriculture policy in host countries;

Agriculture in the developing world

42.      Stresses that the current food challenges call for food production to be stepped up in order to keep pace with increasing demand, while improving quality, lowering costs and ensuring greater sustainability; considers that, in order to achieve this, public policies need to be overhauled with a view to improving production and stock management methods, as well as world market regulation;

43. Stresses the need for more medium and long-term action to develop agriculture and food production in developing countries, particularly in Africa, taking account of the recommendations of the United Nations' International Assessment of Agricultural Knowledge, Science and Technology for Development (IAASTD); is of the opinion that agricultural development can serve as the starting point for broad economic development in a country;

44. Believes that the European Development Fund should be more focused on agriculture, particularly small farms and processing of products on the spot, as the vast majority of the world's poor live in rural areas that are highly dependent on agricultural production; considers, moreover, that efforts should be made to establish rules for agricultural trade, which guarantee food supplies in all countries; believes that developing countries should be accorded trade advantages that support the strengthening of national production; calls on the Commission to take these considerations into account during the WTO negotiations, as well as when negotiating Economic Partnership Agreements (EPAs) with developing countries;

45. Considers that one serious obstacle to increased agricultural output in developing countries is the lack of access for small farmers to loans and micro-credits for investment in improved seeds, fertilisers and irrigation mechanisms; stresses, further, the issue of loan guarantees that in most cases are not available; calls on the European Investment Bank to look into means to provide programmes for local food producers in developing countries with loan guarantees to support access to credit and micro-credit;

46. Reaffirms its belief in the need for regionally integrated agricultural markets; calls on the Commission to support regional cooperation and integration; reminds African, Caribbean and Pacific (ACP) Group of States of the success of agricultural integration in Europe and the stability it has provided for over 50 years; therefore encourages regional economic communities of ACP states to step up their activities in the agricultural field and calls on developing countries to reduce trade barriers amongst themselves;

47. Stresses, further, the fact that agriculture needs to be transformed from a system of subsistence farming to a job-creating rural economy; considers, further, that in order to develop robust agricultural sectors, a particular emphasis should be put on measures to support young farmers in the developing world; believes the European Union should increase cooperation and support efforts to modernise food chains in developing countries, making them more effective; considers, further, that the European Union should support initiatives such as the common seeds programme, started by the African Union and its national and regional partners;

48. Considers that, if the developing countries are to pursue an effective development policy, they must adopt a national or joint regional strategy for rural development with clear support measures for producers and products; considers, in this context, that EU development aid will not be of a piecemeal nature but will form part of the cofinanced national or joint regional strategy for rural development;

49. Demands that a permanent food-security fund be created in support of the world's poorest, under Heading 4 of the General Budget of the European Union to complement other development measures financed by the European Union;

50. Welcomes global initiatives such as the United Nations High-Level Task Force on the World Food Price Crisis and considers that the European Union should coordinate its efforts with the Task Force; stresses the importance of the Voluntary Guidelines on the right to adequate food adopted by members of the FAO; proposes, furthermore, that, in order to ensure the availability of food, a worldwide stockholding obligation programme should be created, as well as a better basic storage system for key production inputs (protein, fertilisers, seeds, pesticides), preferably based on private-sector players, including farmers' cooperatives;

51. Is mindful of EU commitments to the developing world and our current and future WTO obligations; requests that EU support measures assist the goals as stated in the Maputo declaration of 2002 of African governments; calls on Member States to respect their commitments towards achieving the UN Millennium Development Goals, and in particular the provision of 0.7 % of their Gross National Product to development assistance; is of the opinion, however, that the quality of development assistance is more important than the amounts spent thereon;

52. Regrets the reduction in the amount of development aid being devoted to agriculture and rural development, which was 17 % in 1980 and only 3 % in 2006; urges the Commission to direct and monitor the contribution of the EU financial support towards achieving agricultural-led growth and to do all in its power to induce governments to spend the amount of 10 % of the national budget on the agricultural sector, as they have committed to (e.g. by setting objectives targeted at national agricultural policies);

53.                Reaffirms that, for countries belonging to the African, Caribbean and Pacific (ACP) Group of States, agriculture is a sector which is more capable than others of generating growth for poor rural people, thereby making a tangible contribution to the attainment of the first Millennium Development Goal on the eradication of extreme poverty and hunger, and underlines how it is therefore crucial to act immediately and to promote greater investment in agriculture and rural development;

54.                Emphasises that agricultural development must be based primarily on the right to food and the right to produce food, enabling all people to have the right to safe, nutritious and culturally appropriate food produced using environmentally sound and sustainable methods in an autonomous farming structure;

55. Calls on the European Union to recognise developing countries’ right to food sovereignty and to support this with targeted measures, primarily using and developing the available structures and resources – such as seeds, manure and means of production – as well as fostering regional integration;

56.                Calls on the European Union to put agriculture back at the centre of its development agenda, giving specific priority to programmes for agricultural development including clear targets for poverty reduction and feasible objectives, particularly measures promoting small-scale agriculture and the production of food for local markets through the use of biodiversity, with a particular focus on capacity-building for small-holder farmers and women;

57. Calls for the European Union to join forces with Members States, ACP Governments, international organisations, regional development banks and private foundations, non-governmental organisations and local authorities, to incorporate new projects and programme interventions for soaring food prices into regional programmes in a better way;

58. Calls for measures to improve training to enable young people to pursue higher education in agriculture, including training on how to meet EU sanitary and phytosanitary standards, as well as to create job opportunities for agriculture graduates for the purpose of reducing poverty and migration from rural to urban areas, and for the purpose of avoiding ‘brain drain’ – migration from developing countries to developed countries;

59. Recalls the Food Crisis Prevention Network’s 2008 Code of Good Conduct in Food Crisis Prevention and Management, and calls for it to be implemented and observed in the Common Agricultural Policy; furthermore supports and urges involving civil society and promoting the interests of women, small-scale farming cooperatives and producer groups in order to ensure food security and food self-sufficiency;

60. Is very concerned by the fact that, in many instances, military and defence budgets are larger than budgets for agriculture and food;

61. Believes that smallholders represent the cornerstone of agricultural development; stresses some of the most severe problems facing small farmers in the developing world, such as access to markets, land, training, financing, inputs and technology; reaffirms the importance of developing rural infrastructure and investment in small farms and traditional low-input methods production suited to its location;

62. Whereas a significant factor in global food production is a lack of trade in foodstuffs, notes that according to the United Nations Food and Agriculture Organisation, global rice production increased in 2007 while trade in rice fell in the same year;

63. Believes that further, unregulated liberalisation of agricultural trade would lead to a further increase in food prices and even higher price volatility; stresses that the worst affected would be the most vulnerable, food-importing developing countries; stresses, furthermore, that world trade rules must under no circumstances undermine the right of countries or regions to support their farming sectors with a view to ensuring food security for their population;

64. Believes that market opening policies for agricultural products in the framework of the WTO and bilateral free trade agreements have significantly contributed to a loss of food security in many developing countries and in the context of the current global food supply crisis; calls on the Commission to re-assess its free market approach to agricultural trade accordingly;

65. Calls on the large food exporting countries (Brazil, Argentina, Thailand, etc.) to act as reliable suppliers of staple foods and to avoid export restrictions, which could have disastrous consequences, especially on poor food-importing developing countries;

66. Is alarmed by the current world financial crisis which could lead to a reduction in the funding available for public development aid; calls on the Commission to analyse the impact of the financial crisis on the development aid sector and to continue devising proposals with a view to supporting agriculture in the world’s poorest countries;

67. Notes that the global food crisis is among the great threats to peace and security in the world; welcomes, in that respect, the recent efforts of the Commission to investigate ways of tackling the global food security issue; calls on the Member States to support such initiatives at national and local level;

Research and development

68. Reaffirms its commitment to investment in technology and innovation in agriculture and farm production;

69. Stresses the importance of publicly funded research which serves to promote food security rather than focusing one-sidedly on industrial interests; calls for investment in research not only into individual new technologies but also into comprehensive farming systems which will serve the aim of long-term food security; stresses in this connection the pioneering role which could be played in this field, for example, by a EU technology platform for ecological agricultural research;

70. Stresses the importance of research but also of transferring the knowledge gained through research down to farm level through an effective farm extension service, particularly in the developing world; calls for a strengthening of agricultural research and knowledge generation;

71. Is concerned that the emphasis in the European Union on cross-compliance may be to the detriment of farm production research and advice; stresses the need for both;

72. Calls for an accelerated programme of research and development on sustainable and energy-efficient agriculture, suited to its location; encourages Member States to support research aimed at increasing productivity in respect of applications to agriculture; is mindful of the concerns of EU consumers;

Sustainable world agriculture

73. Is concerned by the alterations to weather patterns brought about by climate change, which, it is predicted, will make droughts and floods more common, with negative impacts on harvest yields and predictability of global agricultural production;

74. Is concerned that the implementation in the European Union of proposals to further reduce greenhouse gases may adversely affect EU food production, particularly livestock production;

75. Recognises that improved energy efficiency is needed in the agricultural sector, which generates a significant share of total CO2 emissions;

76. Considers that expansion of biofuels and bioenergy production could impact positively on the agricultural and food processing sector which is suffering from higher prices for inputs such as fertilisers, pesticides, and diesel, as well as transport and processing costs;

77. Recognises that the agricultural sector supports the livelihood of the majority of the population in many developing countries, and therefore encourages these countries to develop a mechanism of stable and transparent agricultural policies that will ensure long-term planning and sustainable development;

78. Asks the Commission to monitor closely the effects of increased bioenergy production in the European Union and in third countries as regards changes in land use, food commodity prices and access to foodstuff;

79. Reiterates that incentives for sustainable cultivation of energy crops should not jeopardise food production;

80. Calls on the Commission and the Member States to promote research and development to prevent and adapt to climate change, including, inter alia, research into the next generation of biofuels, in particular the use of high-yield energy crops, environmentally friendly fertilisers that are as effective as possible, new agricultural technologies with minimum negative effects on land use, the development of new plant types that are resistant to changes in climate and related diseases and research into ways to use waste in agriculture;

81. Believes that there is a need for further agricultural research, in order to increase sustainable farm productivity, and calls on the Member States to exploit fully the opportunities offered in this respect by the Seventh Framework Programme for research and technological development, and to adopt measures that will improve agricultural output in a sustainable and energy efficient way.

82. Instructs its President to forward this resolution to the Council and the Commission.

(1) OJ C 263E, 16.10.2008, p.621. (2) Texts Adopted, P6_TA(2008)0229. (3) Texts Adopted, P6_TA(2007)0577. (4) Agri Aware TNS/Mrbi research conducted in Ireland, August 2008, Hats off to the CAP

Food security – access to sufficient, safe and nutritious food supply - is now a key political priority both at EU and global level.

However, even before the current problems posed by the food price crisis, over 860 million people globally suffered from chronic hunger and malnutrition. The situation has been exacerbated by the unprecedented and unpredicted steep increase in global food commodity prices in 2006, which has pushed a further 100 million people into chronic hunger and poverty.

The increase in food prices follows decades of decreasing food prices in real terms. While there has been some easing of global commodity prices, experts predict that food prices will remain at a relatively higher level than in the past and that action is needed in the short, medium and long-term to secure global food production and to assist the most vulnerable to meet their basic food security needs.

Between September 2006 and February 2008, world agriculture commodity prices rose by 70pc in dollar terms.

Globally food stocks are also at a critically low level. After World War II, there was one year’s supply of food in stock; by 2003 this had reduced to 133 days’ supply and to 40 days in 2008.

While experts predict that the past trend of declining agricultural world market prices – the so-called agricultural treadmill - has ended, fluctuations in agricultural world market prices are likely to be greater. These price fluctuations will lead to dramatic swings in food prices and agricultural incomes, exacerbating efforts to provide a stable supply of food at reasonable prices.

A key challenge for policy makers is to design agriculture and food policies to meet the needs of an expanding world population which is expected to increase by 40% by 2050, with global demand for food, which is expected to double by then.

The more immediate focus should be on how to alleviate the worst effects of rising food prices on the world’s poorest people. The Euro one billion fund proposed by the EU Commission to assist poor developing countries to buy seeds and fertilisers is part of that short-term response. However, more medium and longer term responses are required to deal with food security, particularly in the developing world. This will require a re-focus on agriculture development, on agriculture research and on agriculture extension services in these countries, looking at ways to stimulate agriculture production in regions which can produce.

There is a major political imperative to act, given that in many developing countries, higher food prices have led to food riots and political unrest.

The UN has predicted that the food price trend will push back by several years the attainment of the millennium development goals of halving the number of people suffering from hunger and malnutrition by 2015.

In addition, there is a danger that the global financial and banking crisis could see developed countries reneging on their aid commitments to the developing world. Your Rapporteur believes be regrettable.

Food aid budgets have been severely challenged by higher food prices, with a need for greatly increased funding to buy emergency supplies of food.

The impact of higher commodity prices has been exacerbated by actions taken by food exporting countries in placing export taxes and restrictions on food exports in attempts to address internal food security concerns.

It is also worth noting that developing countries will not come close to securing food supply for their rapidly expanding population through domestic production, therefore the increasing food import needs of developing countries can only be met if the industrialised countries produce and export more food.

This will require productivity improvements in agriculture, which will be difficult to achieve. Since the Green Revolution of the 1960's and 1970's agricultural productivity growth has been in decline.

The extent of the food price hike and the food supply and demand balance that gave rise to it was largely unpredicted. This points to the need for information systems at a global level to monitor production, consumption and stock levels and to provide adequate advance warnings of dramatic changes in food stock levels.

The EU is the largest aid donor in the world contributing 60 per cent of overall development aid. It is in a unique position to exert influence on the current crisis by greater coherence in its trade, agriculture and development policies and in providing leadership at a global level to address the underlying causes of the food security crisis. In the 1980´s some 17pc of development aid was directed towards agriculture, in 2006 this had fallen to just 3pc.

EU food security policy is addressed in Article 33 (39) of the Treaty of Rome, which sets out the internal objectives of the Common Agriculture Policy, namely:

•         to increase agricultural productivity by promoting technical progress and ensuring the optimum use of the factors of production, in particular labour;

•         to ensure a fair standard of living for farmers;

•         to stabilise markets;

•         to assure the availability of supplies;

•         to ensure reasonable prices for consumers.

Your Rapporteur seeks to address the role of agriculture policy in ensuring food security for citizens, specifically how the Common Agriculture Policy (CAP) is meeting the food security needs of the EU and how it impacts on global food security policies.

The report looks at how successive reforms of the CAP have shifted the focus of EU agriculture away from quantity to quality production and how this fits with the new global concerns about food security.

The Health Check of the CAP acknowledges the new situation with the abolition of set-aside, bringing land back into production. But efforts to ease milk production restrictions in the run up to the abolition of the quota regime are less ambitious. The new reality of food security is not sufficiently addressed in the Health Check and this new political reality needs to be in sharp focus in any future changes in the CAP post 2013. The emphasis needs to be on securing the EU food production base and meeting increased demand for food globally.

The challenge posed by climate change is addressed, with demands on agriculture to play its part in mitigation measures. Ironically, moves to increase the global land base for agriculture production which result in deforestation adds significantly to the problems of climate change. In addition, world food production will be negatively affected as a result of climate change in the long term.

The report also explores the contentious issue of land use and the issue of conflicting policy objectives. Can the world meet the need to develop alternative renewable energy sources without impacting on global food prices? Is there a balance to be struck between food, feed and fuel production. The main driver of increased EU demand for grains and oilseeds is bio-energy.

EU environmental legislation, both current and planned does impact on farm production and your Rapporteur calls for assessments to be made of all new legislative proposals on food security.

In order to meet the challenges of food security we need a renewed focus on agriculture research and development. In particular research needs to address the complex issues of scarce natural resources including water and land, environmental pressures, climate change and depleting supplies of fossil fuels on which agriculture is heavily dependent.

Above all the report seeks to highlight the neglect of agriculture in successive development aid budget programmes and calls for a refocus on agriculture policy and programmes appropriate to the needs of developing countries.

But within the EU there is also a need to ensure that investment in agriculture research and development is maintained and enhanced to allow the sector to meet new challenges and to improve productivity.

The key issue for policy makers is to devise policies which ensure that farmers – in both the developing and developed worlds earn a decent income from producing food.

This is key to securing food production and if the market cannot deliver this, then policies need to do so.

While higher commodity prices are a stimulus to production, increasing commodity prices in recent times have been matched by significant increases in farm input costs.

Looking to the future, the CAP is set for further reform post 2013. The move towards fully decoupled payments will continue. In addition, the EU budget review of 2009 will examine all EU spending and receipts. There is little doubt that the CAP budget will be carefully scrutinised. This analysis must take into account the issue of food security and the need to develop policies which enhance food security.

It is also worth noting that the failed WTO talks will, at some point, reopen. When they do the issue of food security must be adequately addressed, given that the talks failed because of the concerns of India and China about the impact of import surges on their rural populations.

An agreement at the WTO which establishes fair trade rules, while recognising each country's concerns about national food security also has a part to play.

Putting food security at the heart of any future WTO deal may help provide the impetus for reaching agreement.

Overall, the impact of high food prices has been extremely serious for the world's almost one billion poor, hungry and malnourished people. However, it may also have provided the necessary stimulus for action to alleviate the problem, starting with a much clearer focus on agriculture production and productivity.

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

SUGGESTIONS

The Committee on Development calls on the Committee on Agriculture and Rural Development, as the committee responsible, to incorporate the following suggestions in its motion for a resolution:

A.  whereas, according to current estimates from organisations fighting world hunger, in developing countries one person in five is currently undernourished and suffering from chronic hunger and each day over 30 000 children in the world die of hunger and poverty,

B.   whereas agriculture provides employment and livelihoods for more than 70 % of the labour force in developing countries, and for more than 80 % in many African countries, and, as a consequence, rural development policies are essential in order to tackle poverty and hunger effectively,

C.  whereas women produce between 60 % and 80 % of food in developing countries and are responsible for half of the world’s food production, whereas women play an extremely important role in caring for their families and whereas women have much less access to land and to means of production than men and must therefore be given appropriate help and support,

1.   Reaffirms that for countries belonging to the African, Caribbean and Pacific (ACP) Group of States, agriculture is a sector which is more capable than others of generating growth for poor rural people, thereby making a tangible contribution to the attainment of the first Millennium Development Goal on the eradication of extreme poverty and hunger, and underlines how it is therefore crucial to act immediately and to promote greater investment in agriculture and rural development;

2.   Emphasises that agricultural development must be based primarily on the right to food and the right to produce food, enabling all people to have the right to safe, nutritious and culturally appropriate food produced using environmentally sound and sustainable methods in an autonomous farming structure;

3..  Calls on the European Union to recognise developing countries’ right to food sovereignty and to support this with targeted measures, primarily using and developing the available structures and resources – such as seeds, manure and means of production – as well as fostering regional integration;

4.   Calls on the European Union to put agriculture back at the centre of its development agenda, giving specific priority to programmes for agricultural development including clear targets for poverty reduction and feasible objectives, particularly measures promoting small-scale agriculture and the production of food for local markets through the use of biodiversity, with a particular focus on capacity-building for small-holder farmers and women;

5.   Calls also on ACP Governments to include the agricultural sector among their political priorities in order to achieve the commitment made in the Maputo Declaration of 2003 to allocate at least 10 % of public expenditure to agriculture; asks the Commission to encourage them to do this, particularly on the occasion of the mid-term review of the 10th EDF;

6.   Requests, in particular, immediate additional funding for food aid and humanitarian aid to developing countries with the lowest incomes and the greatest need in the short term; therefore welcomes the positive initiative of a EUR 1 billion facility for rapid response to soaring food prices in developing countries; urges however that this food facility and short term food aid be part of a wider, long-term policy of investment in agriculture;

7.   Calls for the European Union to join forces with Members States, ACP Governments, international organisations, regional development banks and private foundations, non-governmental organisations and local authorities, to incorporate new projects and programme interventions for soaring food prices into regional programmes in a better way;

8.   Encourages ACP countries to promote better coordination and a greater involvement on the part of governments, local authorities and both national and regional parliaments in decision-making processes relating to agricultural policy and food security, and also to facilitate more extensive participation by civil society and farmers’ organisations;

9.   Calls for measures to improve training to enable young people to pursue higher education in agriculture, including training on how to meet EU sanitary and phytosanitary standards, as well as to create job opportunities for agriculture graduates for the purpose of reducing poverty and migration from rural to urban areas, and for the purpose of avoiding ‘brain drain’ – migration from developing countries to developed countries;

10. Calls on the Council and the Commission, in close consultation with the ACP countries, to give priority to the question of the impact on the ACP countries of EU subsidies on the export of EU agricultural products and to commit to providing specific, sustainable responses aimed at avoiding dumping, in compliance with the commitments made in this area;

11. Recalls the Food Crisis Prevention Network’s 2008 Code of Good Conduct in Food Crisis Prevention and Management, and calls for it to be implemented and observed in the common agricultural policy; furthermore supports and urges involving civil society and promoting the interests of women, small-scale farming cooperatives and producer groups in order to ensure food security and food self-sufficiency;

12. Reminds the Council and the Commission that agrofuels are only a partial and temporary element of the response to the impact of transport on the warming of the climate and on the diminishing sources of oil, and asks them henceforth to ensure that they authorise the production of agrofuels at European level only where they comply with strict sustainability criteria and do not compete with food products.

RESULT OF FINAL VOTE IN COMMITTEE

SUGGESTIONS

The Committee on Foreign Affairs calls on the Committee on Agriculture and Rural Development, as the committee responsible, to incorporate the following suggestions in its motion for a resolution:

1.   Regards food security as a key global priority; believes that agricultural production is the basis of food security;

2..  Considers that the CAP is an important element of global food security policies;

3..  Believes that the CAP should play a significant role in the EU's foreign affairs and development policies with special regard to the external food security policy; believes that, besides securing the EU's food production, the CAP can contribute to meeting the increased demand for food globally;

4.   Notes that armed conflicts impact very negatively on production of and access to food; expresses its concerns about the serious consequences of conflict-proneness as regards food security, e.g. through mass migrations, paralysis of agricultural production, detrimental impact on vital infrastructure;

5.   Believes that it is crucial to avoid disruptive competitive scrambles for scarce food resources; therefore calls for more effective EU coordination with non-governmental organisations, the Food and Agriculture Organization (FAO) and other international agencies at a technical level and with the UN at a political level to promote fair access to global food resources and to increase food production in key developing countries while consistently taking into account biodiversity and sustainable development criteria;

6.   Urges the EU to help countries at risk of conflict to develop strong agricultural policies of their own based on easy access to raw materials, quality education and adequate funding, as well as on reliable infrastructure; believes that EU aid should be targeted at improving food self-sufficiency for recipient developing countries, which will improve regional food security and access to food for the poorest sections of society;

7.   Notes that some growing economies might be planning to lease large tracts of land in poorer parts of Africa and Asia for the purposes of growing crops and shipping them back to their markets so as to improve their own food security; believes that, together with the FAO, the EU must take this phenomenon seriously as a major threat to food security and to effective agriculture policy in host countries;

8.   Believes that rising food prices and accelerated development in the field of biotechnology must not lead to an environmentally less sensitive stance on the use of genetically modified food.

RESULT OF FINAL VOTE IN COMMITTEE

SUGGESTIONS

The Committee on International Trade calls on the Committee on Agriculture and Rural Development, as the committee responsible, to incorporate the following suggestions in its motion for a resolution:

1.  Considers that Europe’s and the world's food security are increasingly threatened by the high volatility in food prices, which was recently reflected in a major price increase after 30 years of decreasing prices in real terms; stresses that it is the poorest population groups in both developing and developed countries that are the hardest hit;

2.  Estimates that the recent sudden soar in prices can be primarily explained by the structural growth in world demand for agricultural products, stemming from population growth, changing eating habits and the growth in agri-fuel production, as well as unfavourable developments such as poor harvests and speculation on world markets, which is causing significant problems for poorer segments of the population both within Europe and even more so in poor countries around the world; stresses that this is therefore not a passing crisis and that a global, long-term response is required;

3.  Stresses that efforts to meet people's basic needs, in particular as regards food and water, can often be a source of conflict; notes that the growth in the world's population, which is expected to rise by 3 billion by 2050, will exacerbate such tensions in all regions of the world; calls, accordingly, for this geo-strategic factor to be taken into account in the future formulation of agricultural policy;

4.  Stresses that the current food challenges call for food production to be stepped up in order to keep pace with increasing demand, while improving quality, lowering costs and ensuring greater sustainability; considers that, in order to achieve this, public policies need to be overhauled with a view to improving production and stock management methods, as well as world market regulation;

5.  Whereas a significant factor in global food production is a lack of trade in foodstuffs, notes that according to the United Nations Food and Agriculture Organisation, global rice production increased in 2007 while trade in rice fell in the same year;

6.  Believes that further, unregulated liberalisation of agricultural trade would lead to a further increase in food prices and even higher price volatility; stresses that the worst affected would be the most vulnerable, food-importing developing countries; stresses, furthermore, that world trade rules must under no circumstances go against the right of countries or regions to support their farming sectors with a view to ensuring food security for their population;

7.  Believes that market opening policies for agricultural products in the framework of the WTO and bilateral free trade agreements have significantly contributed to a loss of food security in many developing countries and in the context of the current global food supply crisis; calls on the Commission to re-assess its free market approach to agricultural trade accordingly;

8.  Calls on the large food exporting countries (Brazil, Argentina, Thailand, etc.) to act as reliable suppliers of staple foods and to avoid export restrictions, which could have disastrous consequences, especially on poor food-importing developing countries;

9.  Insists that the EU must play a part in matching food supply to demand worldwide and that all forms of agriculture must be involved in order to achieve this; considers, furthermore, that the EU must guarantee its food security by maintaining the fundamental principles and objectives of the Common Agricultural Policy (CAP): reasonable prices, ensuring availability of supplies, stabilising markets, to ensure a fair standard of living and increased productivity by technological progress and better crops, and creating safety nets to react to crises akin to those being faced today;

10. Regrets that the new measures proposed by the Commission as part of the Health Check of the CAP do not take sufficient account of the lessons learnt from the current food crisis;

11. Invites the Commission to steer agri-fuel production towards the use of second-generation technology, in order to avoid a reduction in food supply and to revise and adapt agri-fuel production targets on the basis of clearly identified economic, social and environmental criteria.

RESULT OF FINAL VOTE IN COMMITTEE

SUGGESTIONS

The Committee on Industry, Research and Energy calls on the Committee on Agriculture and Rural Development, as the committee responsible, to incorporate the following suggestions in its motion for a resolution:

1.  Stresses the importance of a comprehensive analysis of rising food prices, taking into account rising energy prices for end consumers, stronger weather phenomena and increased demand for energy owing to the increased global population, and calls on the Commission to investigate further the possible link between high food prices and rising energy prices, in particular for fuel;

2.  Notes that the global food crisis is among the great threats to peace and security in the world; in that respect welcomes the recent efforts of the Commission to investigate ways of tackling the global food security issue; calls on the Member States to support such initiatives at national and local level;

3.  Recognises that the agricultural sector, which generates a significant share of total CO2 emissions, needs improved energy efficiency;

4.  Considers that expansion of biofuels and bioenergy production could impact positively on the agricultural and food processing sector which is suffering from higher prices for inputs such as fertilisers, pesticides, and diesel, as well as transport and processing costs;

5.  Recognises that the agricultural sector supports the livelihood of the majority of the population in many developing countries, therefore encourages these countries to develop a mechanism of stable and transparent agricultural policies that will ensure long-term planning and sustainable development;

6.  Asks the Commission to monitor closely the effects of increased bioenergy production in the EU and in third countries as regards changes in land use, food commodity prices and access to foodstuff;

7.   Reiterates that incentives for sustainable cultivation of energy crops should not jeopardise food production;

8.  Stresses that it is necessary to reach an equilibrium on the sustainability criteria for biofuels, which, on the one hand, allows any negative effects of increased bioenergy production on biodiversity, foodstuff prices and land use patterns to be avoided and which, on the other hand, does not undermine the prospects of attaining the 2020 renewable energy targets;

9.  Calls on the Commission and the Member States to promote research and development to prevent and adapt to climate change, including, inter alia, research into the next generation of biofuels, in particular the use of high-yield energy crops, environmentally friendly fertilisers that are as effective as possible, new agricultural technologies with minimum negative effects on land use, the development of new plant types that are resistant to changes in climate and related diseases and research into ways to use waste in agriculture;

10. Believes that there is a need for further agricultural research, in order to increase sustainable farm productivity, and calls on the Member States to exploit fully the opportunities offered in this respect by the Seventh Framework Programme for research and technological development, and to adopt measures that will improve agricultural output in a sustainable and energy efficient way.

RESULT OF FINAL VOTE IN COMMITTEE

D(2008) 64227

                                                                             Mr Neil Parish

Chairman

Committee on Agriculture and Rural Development

Subject:           AGRI Draft report on Common Agricultural Policy and Global Food security INI 2008/2153 (rapporteur Mairead McGuiness)

Dear Chairman,

The above-mentioned report has raised great interest in the Committee on Budgets. Many of the budgetary aspects had been addressed in the framework of the recent Development Committee report by Gay Mitchell on "a facility for rapid response to soaring food prices in developing countries" and the recent Budget Conciliation of 21 November has brought a breakthrough on the Food Facility. Therefore, instead of a formal opinion we transmit our comments by letter.

We fully support most of the findings of the draft report of Ms. McGuiness, in particular abolishing all export refunds by 2013 and pursuing further reform in line with WTO agreements. I would like just to recall some main budgetary aspects related:

1. European Parliament and Council agreed to finance the "rapid response to soaring food prices in developing countries" (Food Facility) over a 3-year period within heading 4 (“The EU as a global partner”) of the multiannual financial framework, at an amount of EUR 1 billion, the financing of which will be shared out over the years as follows: EUR 262 million in 2008, EUR 568 million in 2009 and EUR 170 million in 2010, mainly drawing by redeployment from the Instrument for Stability, the Flexibility Instrument and the Emergency Aid Reserve. For this purpose, in 2008 an additional amount of EUR 240 million in commitments will be entered into the budget for the Emergency Aid Reserve, and the budget line for the Food Facility will be inserted. For 2009, an amount of EUR 490 million in commitments and of EUR 450 million in payments will be entered into the budget for the Food Facility.

The payment schedule for the Food Facility is expected to be EUR 450 million in 2009, EUR 350 million in 2010 and EUR 200 million in 2011 and the following years, subject to authorisation of the budgetary authority in each annual budgetary procedure.

2. On the same occasion the Commission was requested to ensure consistency and complementarity of the food facility with the EDF.

3. Consistency should also be pursued concerning EU contributions to the World Food Programme and other UN programmes in favour of agriculture and food security. The joint declaration agreed during the conciliation meeting has underlined the importance of improving the visibility of Community assistance in general.

4. Concerning Paragraph 28 of the McGuiness report, I recall that in the opinion of 24.9.2008 of the Committee on Budgets to the Development Committee an amendment had been voted on the importance of microcredit facilitation for small agricultural producers in 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)) and shall be aimed at boosting production.

Yours sincerely,

R. Böge