European democracy?
The Ukraine’s crisis may have far-reaching effects for the European Union’s
agricultural policies, Joan Noble says
The serious crisis in the Ukraine shows the fragility of peace in east Europe and the deep rooted divisions between so many ethnic groups. It is a reminder that, if nothing else, the European Union has been successful in uniting differences within countries and between countries for over 50 years. Even the recent financial crisis, in the main, has been resolved through the political system and diplomacy rather than violence. It must be hoped that a peaceful outcome can be achieved in Ukraine but with Russian troops in Crimea and clear ethnic divisions within the country this may be too much to hope for. It all started when a large number of Ukrainians were angry when their leader, Victor Yanukovych, now removed from office, decided to turn his back on the possibility of closer ties with the European Union in favour of closer relations with the Russian Federation. The Ukrainian crisis has had an impact on commodity markets as well as financial and equity markets. Cereal prices spiked and the threat to European and Ukraine gas supplies from Russia is of concern. Commodity prices are always volatile and vulnerable to uncertainty. The Food and Agriculture Organisation (FAO) publishes a food price index showing an increase of 2.6% in February over January, the highest increase since mid 2012. This was published prior to the Ukraine crisis. Apart from meat, all prices increased with dairy prices rising above the average at 2.9%. The FAO says that demand for all dairy products is firm especially from North Africa, the Middle East and the Russian Federation. The conflict with the Russian Federation over Ukraine may result in difficulties for European exporters to the Russian Federation.
Agricultural prospects
Last month the European commission also published a report on agriculture prospects 2013 to 2023 which forecasts the medium term outlook for major EU agricultural commodity markets and agricultural income. In that report, the commission says that the prospects for milk and dairy commodities are favourable on both world and EU markets. The emerging economies ensure good demand for EU dairy exports. An expansion of milk production is considered to be limited despite the ending of quotas in 2015 because of environmental constraints in some member states. It is predicted that deliveries will reach 150 million tonnes in 2023 from 142 million tonnes in 2014 produced from a declining number of cows but increased yields. It is forecast that production of cheese will increase from 9.7 million tonnes to 10.7 million tonnes in 2023 which will allow for increased exports to over one million tonnes.
Butter production is forecast to be quite stable (2.312 million tonnes in 2023 compared to 2.326 million tonnes in 2014) with a small reduction of exports as producers prefer to use fat for cheese rather than butter. The forecast shows an increase in SMP production from 1.12 million tonnes in 2014 to 1.25 million tonnes in 2014 with increased exports: it is suggested that half of all SMP production will be exported by 2016. A decline in WMP production is forecast while whey production looks set to increase from 1.92 million tonnes to 2.15 million tonnes with exports increasing from 589,000 tonnes in 2014 to 802,000 tonnes in 2023.
Milk wars
The cheese sector is the one with the most significant forecast growth, fuelled by increased demand from internal and export markets. Much of the increased output of milk will be diverted to cheese production. The EU milk price is expected to stay firm because of higher prices for cheese and SMP. However, that does not stop milk price wars in the supermarkets. Tesco’s move to cut its milk price to £1 for four pints has been followed by many other supermarkets. This has angered farmers, many make a loss from milk although the supermarkets are insisting that the price cuts will not have an impact on the price paid to the farmer. Prices and the impact on both farmers and consumers of such moves are monitored by the commission to make sure there is no abuse of power. The commission is in its final year of its five year term. A new set of commissioners will be appointed once the European parliament elections, which will take place between 22 and 25 May, are over. It is one of the first jobs facing the 751 elected MEPs who have the opportunity to scrutinise the applicants before their final appointment. A new agricultural commissioner may have different priorities than the current commissioner, Dacian Ciolos.
The president of the commission, currently Jose Manuel Barroso, who steps down in October, is the one who hands out the portfolios to the 28 commissioners. It is the council of ministers (representatives from the 28 member states’ governments) which proposes to the European parliament who should have the post of president but the appointment has to be endorsed by the parliament. The two main contenders are Jean-Claude Juncker (the centre right candidate) versus Martin Schulz (the socialist candidate), who is the current president of the European parliament.
Low turnout
The problem facing politicians in Europe is the very low turnout at elections. Each year since the first elections were held in 1979 enthusiasm amongst voters has diminished, even though the European parliament’s powers have increased significantly following numerous treaty changes. Prior to these treaty changes the 1984 election had a turnout of 61% but by the 2009
election this fell to 46%. If less than half the population can be bothered to vote is there any real legitimacy in this institution, the only democratically elected part of the EU? It is a major challenge facing the politicians and political leaders as to how to inspire people to turn out and use their democratic rights. There is concern over the lack of democratic legitimacy. Perhaps the events in Ukraine will remind Europe¹s voters how fragile and divided countries can become and that democracy is important for stability and growth in countries with so many different cultures and ideals.
