Maize: EP Agriculture Committee against abolition of intervention system - Main contents

The EP Agriculture Committee is opposed to plans for scrapping the Community intervention system for the maize market from this year. MEPs are calling on the European Commission to withdraw its draft legislation, arguing that it has not been properly evaluated and that the principles on which it is based do not take account of the sector's future prospects.

The committee voted to reject the Commission proposal when it adopted a report by Belá Glattfelder (EPP-ED, HU) by 24 votes to 10. Under the proposal, the intervention system for maize would be abolished, starting from the marketing year 2007/2008.

Other amendments proposing a gradual reduction in public purchases of maize, down to zero tonnes by 2009/2010 plus a review of the situation by the end of 2008, were therefore withdrawn.

The report is due to be put to a plenary vote in late May in Strasbourg. Although Parliament's position is not binding on the Council of Ministers, which has to take a decision on the Commission's proposal, it does send another strong political signal just a few weeks after Members reached a compromise with the Member States on another controversial issue, voluntary modulation.

Differences with the Commission over the market situation

The EU intervention system for cereals (maize, wheat, barley and sorghum) consists of a single price of €101.31 per tonne paid to farmers who sell their crops into public storage if they cannot sell them on the market. According to the Commission, Community stocks were 5.6 million tonnes in 2005/2006 and could reach 15.6 million tonnes by 2013. It stresses that growers in regions where production costs are lower and who are further from the main areas of consumption (essentially Hungary) have an interest in selling into intervention rather than trying to export.

Parliament's rapporteur argues, on the basis of professional forecasts, that the Commission's analysis assumes a linear increase in stocks which does not reflect market trends: a currently high market price of around €120/tonne, a lower than average crop yield in 2006 and a fall in intervention stocks to 4.28 million tonnes at the end of 2006, together with the expected increase in world consumption and the growth in the biofuels market, which is set to be an important market for maize.