EC Responses to Soaring Food Prices

EC Responses to Soaring Food Prices Philip Mikos – DG Development Policies for the Sustainable management of natural resources

Contents
Setting
Food Price Developments
Political Scenery
EC Response
Communication COM321
Developing Countries: Non-Paper
Response Instruments
Humanitarian Instrument
FSTP
EDF 10 – B-envelope
Food Facility

Setting – Price Developments

Setting – Political Scene
UN HLTF
FAO Conference 3-5 June
EP Resolution 22 May
Council Conclusions 20 June
G8 Leaders 7-9 July
UN GA, 22-25 Sept

EC Response – COM 321
‘ Tackling the Challenge of rising food prices. Directions for EU action’
On causes, prospects and impacts (EU and global)
Elements for EU response:
Actions to mitigate the effects of price increases in the short-medium term (intra-EU)
Actions to enhance agricultural supply in the long term (intra-EU)
Actions to address the crisis at international level:
DDA conclusion
Scale up humanitarian contribution
Providing development support

EC Response – DEV Non-Paper
Proposes EU response strategy with aim to significantly reduce the negative effects of the food price rises on the poorest consumers in developing countries, while at the same time encouraging a positive supply response from farmers in these countries.
Short, medium and long term actions, including:
Short: humanitarian response, financing of consumer needs, policy dialogue
Medium: expansion safety nets, rapid provision agricultural inputs
Long: agricultural investments, sustainable safety nets, risk management

Instruments – Humanitarian Assistance
Upfront mobilisation of resources
Additional allocation of € 140 million for food assistance -> € 363 million for 2008
To cover additional costs related to increase in food prices (and transport costs)
Working through International Organisations and NGOs

Instruments – FSTP 2008
First response from development instruments through reallocation of 2008 funds (€ 50 million)
Allocated to 12 priority countries
Coverage:
Safety nets/ social transfers
Agricultural production measures
DCI Committee July; Commission Decision August

Instruments – EDF 10 B-envelope
Up to Euro 200 million; additional allocation
30 countries
Highly vulnerable
Hit by food price increases (Balance of Payments effect)
Mainly used for ‘fiscal compensation’ and urban safety nets
Budget support or project support (range of possible actors)
EDF Committee of 24 September -> Commission Decision in course of October

Instruments – Food Facility ?
EC proposal, adopted by Commission 18 July
Co-decision procedure
Parliament: Mitchell Report with amendments voted on 7 October
Discussions ongoing in Council
Main Issues
Budget Heading
Comitology
Implementing Organisations

Food Facility - Objectives and Scope
Aim: rapid and direct response to the increased food prices in developing countries
Primary objectives:
Encourage a positive supply response of the agricultural sector
Support activities to respond rapidly and directly to mitigate the negative effects of high food prices in line with food security objectives

Food facility – Key features of EC Proposal
Short-term: in-between emergency and long-term development cooperation
Time-bound: operational in two years (2009 and 2010), using 2008 and 2009 budget commitments
€ 1 billion;
Focus on agricultural supply response; in some countries safety nets (preferably productive)
Contracts with International and Regional Organisations

Food facility - Implementation
List of target countries
Differentiated approach, dependent on development contexts and impact of soaring food prices in target countries
Eligible activities:
Improve access to agricultural inputs and services
Safety net measures (aiming at maintaining/improving agricultural productive capacity, and addressing the basic food needs of the most vulnerable populations)
Activities per country identified in collaboration with International and Regional Organisations

Food Facility - Indicative Time-schedule
Assumes successful discussions EP- Council-COM in weeks to come
September – December : technical preparations for Commission Decision
December: Adoption Regulation by co-legislators, entry into force Regulation
Late December: implementing Commission Decision
Early 2009: contracting and start implementation of first measures

EC Responses to Soaring Food Prices

by Euforic Services on Oct 16, 2008

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EC Responses to Soaring Food Prices — Presentation Transcript