Wheat quality issues in focus as impact of CAP reform
July 01, 1994
by Teresa Acklin
Two French officials told the recent General Assembly of the International Milling Association how the reform of the Common Agricultural Policy and the accord on trade under the Uruguay Round of the General Agreement on Tariffs and Trade would potentially affect European Union wheat production and flour milling.
The officials were Henri de Benoist, president of the French Wheat Growers' Association, and Bernard Valluis, president of Euroflour, a consortium of European exporting flour millers, and an official of the Soufflet milling organization. According to Mr. de Benoist, the drop in wheat prices prompted by the CAP reform was “not healthy for anyone,” particularly since adequate transition mechanisms were not in place.
Mr. de Benoist emphasized the importance of doing everything possible to reduce wheat production and marketing costs, since the set-aside payments that would be made to participating farmers were lower than the current cost of production.
Along that line, Mr. de Benoist urged flour millers “to be aware of the cost of your raw material, since you share our interest.”
The French farm leader accused the United States of prompting “a real wheat war,” saying that U.S. prices recently were below E.U. prices on world markets.
He was particularly critical of the Uruguay Round accord for neglecting the impact of fluctuations in currency values, which prompted his asserting, “We in Europe have to fight even harder for a single currency to allow us to compete against the dollar, which is being artificially devalued to the disadvantage of our wheat industry.”
Mr. de Benoist said CAP reform and the Uruguay Round accord would not prompt any significant change in how wheat was marketed in France, but would mean that “our marketing and production costs must be reduced.”
He acknowledged that millers in Europe had experienced wheat quality problems as a result of CAP reform, by restricting wheat acreage and by reducing the incentives of farmers to grow the desired qualities of wheat. He said his association was focusing on developing a list of the varieties of wheat preferred by millers, as well as investigating wheat production methods that would assure quality growth.
Along that line, Mr. de Benoist told of new methods to apply fertilizer with increased accuracy, as well as conservation steps aimed at reducing the need for pesticides and insecticides.
“I assure you,” he told the I.M.A. General Assembly, “that we are tackling the problems facing you in wheat.
“We are urging French farmers to push for quality wheat production, which will help us protect our markets. Our goal is to provide you with an abundant supply of high quality wheat, which is essential for milling to flourish. At the same time, I enlist your help in assuring that we all work together.”
Mr. Valluis presided over a panel discussion with the title “The World Grain Market Post-GATT: Its Impact on Flour.”
Panel participants included Luigi Costato, president of the Italian Millers' Association and current president of the I.M.A.; Mr. de Benoist; Morton I. Sosland, editor-in-chief of World Grain; and David Hodgson of Spillers Milling Ltd.
The discussion covered a broad list of subjects, including acknowledging the wide range of forecasts of the impact of the Uruguay Round on the level of world wheat prices.
Professor Costato, who retired from his family milling business to take up a career in teaching law at a local university, said flour exporting had a strong future role to play in providing humanitarian assistance to the “billions of people who don't have enough to eat.”
He predicted that flour exporting would also increase because of the explosion of the birth rate in Mediterranean Basin countries as well as in Africa.
At the same time, he acknowledged that much depended on political decisions.