FDBusiness.com

To secure supplies of affordable food, the EU must have a strong farm policy that discourages food commodity speculation and helps more young farmers to start up, says the European Parliament. With worldwide demand growing and 16% of EU citizens below the poverty line, access to food is an increasingly important issue.

The future Common Agricultural Policy (CAP), now being debated by EU institutions, must ensure food security for all citizens, maintain the vitality of rural areas and guarantee food production throughout the EU, say MEPs in a resolution.

The future CAP must also ensure that citizens have access to adequate supplies for affordable food, help to disseminate information about healthy diets and improve conditions for programmes such as school fruit and school milk, add MEPs.

MEPs point out that food commodity derivatives differ from other financial products, and say that they should be traded only by those “who have legitimate interests in protecting agricultural merchandise against risks.”

They argue that speculative behaviour accounted for up to 50% of recent price hikes, and note that wheat contract prices, for example, rose by 70% in only two months.

To ensure that financial instruments help farmers to overcome the crisis, rather than helping speculators to provoke extreme price volatility, Parliament calls for existing EU legislation on financial instruments to be revised, so as to improve trading transparency. MEPs also endorse the actions taken to this end by the current G20 Presidency.

The new CAP must also do more for young farmers. Only 7% of EU farmers are under 35 years old, but 4.5 million EU farmers are to retire in the next ten years. MEPs ask that measures be stepped up to attract young people into farming, such as installation premiums and subsidised interest rates for loans.

MEPs propose the creation of a ‘targeted global system of food stocks’, with some emergency stocks to reduce hunger and others to be placed on the market when price rises threaten affordability. This system could be managed by the UN or FAO, suggest MEPs, who are calling on the European Commission to study how best to make such a system work.