Big Phil in command of agriculture

Travelling with the EU Commissioner’s business delegation last week in China and Japan highlights just how diverse the EU agricultural production is and the different emphasis in different areas – and that is before considering the importance of the wine industry to large areas.

At the end of the mission, the Commissioner spoke to the Irish Farmers Journal.

Mission success

Given the occasion was about China and Japan, that seemed the sensible place to start. Was the mission a success and did it meet with expectations?

It was clear from the Commissioner that while the overall emphasis was trade, the challenge was different between both countries.

Hogan is of the view that while China is already a rapidly developing market in dairy and pigmeat, it can do much more.

His emphasis here was relationship building, given the Chinese business style of building relationships before entering negotiations.

It may be frustrating from a western perspective, but it is a market worth having so we have to adapt to their terms.

Turning to Japan, the Commissioner’s focus was very much on the Free Trade Agreement (FTA) being discussed with the EU.

It is currently somewhat stalled, as the Japanese are focused on the ratification of the Trans Pacific Partnership Agreement (TPP).

This is an agreement between the US and the main Asian economies plus Australia and New Zealand, which was agreed between the negotiators last year.

It is running into problems in the Japanese parliament and it is thought there may be elections in July.

In this case, the Commissioner takes the view that it could be autumn before meaningful negotiations resume.

Given that protection of domestic agriculture is sacred to the Japanese and even with TPP allowing for 16 to 21 years to phase in reduction of many tariff barriers, the IFJ put it to the Commissioner that there was little prospect for EU and Irish agriculture to gain much from a deal with Japan.

Ag on the offensive

He was forceful in his rejection of this view, explaining that this is one set of negotiations where agriculture has an offensive, rather than defensive, position – as in many of the other negotiations.

Put bluntly, it is a negotiation where agriculture can gain, because the Japanese are looking to get more of their cars into Europe. In return agriculture and wine are the products the EU are looking to send to Japan.

It is therefore, according to the Commissioner, a very different negotiation with the Japanese than what TPP was.

It looks like this negotiation – which has been more under the radar (probably because it is less of a threat to agriculture) – has something more positive to offer Irish farmers – and the meat industry representatives are always urging a greater focus by EU negotiators on it.

On the defence

While the Commissioner could be positive about FTA discussions with Japan, he is very much on the defensive with the other trade talks that have momentum at present.

The Trans-Atlantic Trade and Investment Partnership (TTIP) with the USA and Mercosur with the South American countries represent a real threat to EU agriculture. The IFJ put it to the Commissioner that the EU beef market simply couldn’t carry another 78,000 tonnes of beef from South America on top of the 50,000 agreed with Canada recently and an expectation flagged up by the US recently for meaningful access for agricultural products.

On TTIP the Commissioner is adamant that whatever noises are being made about a push for a deal, there will be no rushing on the part of the EU.

He didn’t take kindly to the suggestion that agriculture was in a weak position with TTIP, saying that the EU was a larger market than the US and that the US negotiators were becoming increasingly clear that the EU would defend its farmers.

Imaginative solutions

Hogan was also aware – as highlighted by Matt Dempsey in the Irish Farmers Journal recently – of how the US always seems to find imaginative ways to protect its farmers, the latest being the subsidised margin insurance scheme for milk.

The Irish Farmers Journal put it to the Commissioner that if the EU can mount a defence for agriculture in relation to TTIP, surely there isn’t a chance with Mercosur –with the EU already circulating among members the notion of tabling a 78,000t beef offer.

Again the Commissioner counters forcefully with the response that this isn’t an offer; it is a position circulated among members to allow discussion.

He said there is no EU position on an offer yet and that has to be resolved by the Member States. It is an ongoing process, as are Trade Policy Committee (TPC) meetings, and there is considerable opposition.

Agriculture has made its position well known across Europe. He is clear in the view that any agreement must be balanced and agriculture will not be sacrificed.

Commissioner Hogan left no doubt that he would be defending agriculture and EU farmers in these negotiations.

Russian embargo

Turning to the Russian embargo now in place for almost two years, the Irish Farmers Journal put it to the Commissioner that EU farmers were effectively left to pick up the tab for what was a political decision.

He readily accepted that the closure of Russia hit farmers hard, especially in pigmeat and dairy. In accepting the principle of farmers being hit hard, the IFJ suggested that a fuller compensation package was in order.

Here the Commissioner used some deft footwork to explain that he did indeed secure an extra €1bn for the agriculture budget and said it was also reassuring that new markets had been found to replace 75% of the sales that went to Russia.

While he accepted the suggestion that these were likely to be less value, he was adamant that – in the wider context – the EU had to recognise and act on what was going on in Russia and its neighbouring countries, and said trade couldn’t trump everything else.

The forthcoming conference between the EU and Russia in June, when President Juncker will be having talks with Russian President Putin were an opportunity to reopen trade discussions – but for once Commissioner Hogan didn’t seem that confident.

Beef labelling

If the Commissioner was upbeat about trade talks and subdued about Russia, he totally closed the door when challenged about beef labelling.

Current mandatory beef labelling has closed Britain as a market for Irish cattle, with severe penalties in place at the factories for non-UK-origin beef, up to the point of it costing the farmer £150 to have it killed and disposed of or taken home for own use.

Strictly speaking, labelling is outside Commissioner Hogan’s brief, as it is the portfolio of Commissioner Andriukaitis, but he didn’t think there would be any further review of beef labelling anytime soon.

He pointed out that it was reviewed in 2012/13, but while he couldn’t see any relaxation on beef he similarly didn’t see mandatory labelling going further with other agricultural produce with voluntary labelling, with members states taking their individual positions on the issue.