Local view for "http://purl.org/linkedpolitics/eu/plenary/2008-06-17-Speech-2-361"
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"en.20080617.39.2-361"2
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"As the two questions, as rightly said by the President, are more or less linked, I would like to take the opportunity to give a joint reply to both questions.
In order to be able to particularly address the needs of the most deprived people in the EU, a modernisation and an upgrade of the scheme are envisaged and we will be presenting a proposal later this year.
I think it is also important that we continue to encourage and promote investments in agricultural research, to enhance sustainable productivity growth in the agricultural sector, not only in Europe but worldwide.
Regarding agricultural market price formation, the Commission is committed to monitoring activities by speculative investors in commodity-related financial markets and also on their impact on price movements.
As regards the question of the dominant position, any abuse of dominant positions is subject to Article 82 of the Treaty or its equivalent in national laws. The Commission and the national competition authorities are vigilant to any infringement of the European Union’s competition law.
The Commission takes specific care to ensure that concentration of a Community dimension will not significantly impede effective competition to the detriment of consumers and of different businesses. In this context, the Commission will also examine the functioning of the food supply chain in parallel with the monitoring of the retail sector established in the context of the Single Market Review.
As provided by the Treaty, the measures taken by the Member States and the Community shall be conducted in accordance with the principles of the internal market and cross-border competition. The setting of maximum selling prices for certain basic foods is not foreseen at the moment.
The Commission is aware of governments currently increasing indirect taxes in a bid to boost public finance. Moreover, the Commission shares the view expressed by the Finance Ministers that distortive fiscal and other policy measures that prevent the necessary adjustments should be avoided.
Finally, the Commission considers that short-term targeted measures taken to alleviate the impact of higher energy prices on poorer sections of the population might be justified. However, they should of course not have a distortive effect or delay the necessary structural adjustments. A general decrease – I think we can all agree on that, in taxes or in VAT – is by definition not targeted at poorer sections of the population.
The Commission’s actions are not only concerned with domestic impacts (I think we all have a commitment to securing a level playing field also when we talk about developing countries and so far the Commission has mobilised more than EUR 300 million in food emergency aid and we are actively promoting a coordinated response at international level in line with the conclusions of the FAO summit that took place only two weeks ago.
So I think we have reacted to the challenges that the new situation is posing all of us.
If we look at the euro area, inflation has actually come down from 8-10% in the 1970s and the 80s to 3% in the 1990s and has actually averaged at a bit over 2% in the first decade of European Monetary Union.
But since the third quarter of 2007, global shocks both to energy and food prices have put upward the pressure on inflation not only within the European Union but throughout the whole world.
The strong euro had mitigated to some extent the effect of rising or increasing prices of fuel and oil. But we have to face reality that the inflation rate has actually increased from 1.9% in August last year to 3.6% in April 2008.
The Commission has set out its views concerning the recent increases in food prices in the communication on ‘Tackling the challenge of rising food prices: Directions for EU action’. Beside a set of other factors, higher oil prices have led to increasing agricultural market prices within the European Union; both through higher agricultural input and also logistic costs.
Although demand for agricultural commodities is influenced by the biofuel market, all the analyses that the Commission has made indicate that the causes of the rise in global food prices are varied. They spring both from structural and temporary factors – and the current EU biofuel production has actually very little impact on the current global food prices, with the latest estimations we have stating that approximately 1% of the land within the European Union is used for biofuels.
But it is clear that the recent increase in agricultural prices can only partly explain the observed food-price rise at retail level so sometimes you can see a discrepancy between the price at the farm gate and the price at the supermarket or in the shops.
As the current crisis actually has many different aspects, the response proposed by the Commission is equally comprehensive and is designed to tackle both the short-term consequences and the long-term drivers of soaring food prices. In order to mitigate price pressure in the agricultural sector, within the common agricultural policy (CAP) we have already set further incentives to enhance market orientation and to try to boost production: with mandatory set-aside put at zero for this production year and also an increase in the milk quotas effective from 1 April 2008, we have actually been reacting very quickly. Furthermore, the European Union has decided to suspend the import duties on cereals for the current marketing year, for most cereals.
It is obvious that we will tackle further these questions in the upcoming discussions on the health check of the common agricultural policy."@en1
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