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Food & Ag Policy Briefing: ‘Disaster’ aid for US farmers, CAP reform objections, Brexit delayed

Floods in the Midwest, differences over EU farm policy exposed, uncertainty remains over UK's exit from the EU

US President Donald Trump last week issued a federal disaster for counties in Nebraska, while governors in Iowa have requested financial assistance after flooding caused damage estimated at US$1.6 billion.

This article provides a review of the most significant talking points in the food and agriculture policy sphere for the past seven days.

Large livestock and crop losses are expected – potentially topping $400 million and $440m respectively – and growers could be forced to delay or cancel planting.

USDA highlighted multiple resources available to producers affected by the floods. “Recent flooding in the Midwest and along the Missouri and Mississippi River Valleys has caused devastating impacts across the region," USDA Secretary Sonny Perdue said in a release. "USDA has personnel and resources devoted to helping farmers and communities recover after this storm," he added.

There was better news for farmers in terms of trade, with Brazil agreeing to let in 750,000 tonnes of wheat duty-free per year following talks between Trump and Brazilian president Jair Bolsonaro. The TRQ will be open to all parties but the US will almost certainly benefit the most due to proximity and exportable surplus.

The agreement will also see US pork allowed to be exported to the Latin American country, but Brazilian farmers have been left feeling short-changed, with no firm commitments on the lifting of the US ban on beef exports, or sugar market access.

CAP talks

In the EU, the three institutions further sketched out their opinions to key parts of the proposed reform of the Common Agricultural Policy, with member state agriculture ministers objecting to important provisions of the Commission’s proposals at last week’s Farm Council meeting.

Ministers took issue with the proposed regulations on the Strategic Plans, the Common Market Organisation and horizontal aspects.

The European Commission hit back at demands from seven central and eastern European agriculture ministers, who asked for higher limits and fewer restrictions on direct payments, claiming they were “not appropriate”, while Agriculture Commissioner Phil Hogan admitted there is no “contingency plan” should the CAP reform process be delayed beyond the start of the new policy in 2020.

But MEPs have moved a step closer to forming their position on the new CAP, explaining they have now nearly completed the work on the technical details of compromise amendments for the policy.

Figures still need to be worked out on aspects such as the share of eco-schemes and coupled support in direct payments. Disagreements also remain on a mandatory application of capping and the transfers of funds between Pillar 1 and Pillar 2.

Brexit delay

Finally, the European Council agreed last week to an extension to the UK’s original deadline to leave the European Union of March 29.

The Council offered two options – the first was to extend the deadline to May 22, which is the day before the start of European Parliament elections, on the condition that the Withdrawal Agreement is passed by the UK Parliament this week.

The second, was a shorter extension to April 12 should the WA not make it through. There are some doubts as to whether the agreement will be voted on at all in the coming days, with support said to be very weak for the plan. A series of indicative votes on the range of ‘next step’ options may now be a more likely scenario.

The extension means there remains a lack of clarity for the food and agriculture sector over the future trading relationship between the UK and EU, with literally every possible outcome still on the table – from a ‘no deal’ Brexit to revocation of Article 50.

In case you missed it…

More of the most popular article on IEG Policy last week:

Jury finds Monsanto’s glyphosate herbicide likely caused cancer

FDA sheds light on requested $38.4 million increase for FY 2020 food programs

Pret A Manger hit with another 'natural' lawsuit

De Castro to step down as MEP

EU consumer protection deal steps back from dual quality ban

European dairy sector must focus on global exports, argues Commission adviser

Week ahead

EU agriculture policy diary (March 25-29): CAP reform and fertilisers

US Washington week ahead: US-China trade & disaster aid as Congress returns

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