1. Common market organisation for cereals in EU 30th March 2012 in Belgrade Workshop on Market intervention and public warehouses Dr. Peter Bohlen

2. 2 Structure of presentation I.Common market organisation for cereals in EU II.Market developments III.Consequences for intervention IV. Conclusions

3. 3 I. Common market organisation for Cereals in EU 1.Intervention (Reg. (EC) 1272/2009). As part of the safety net (minimum price on whole sale basis). 2.Import duties. 3.Import tariff quotas. 4.Export refunds. 5.Processed products.

4. 4 Trade with third countries (non-EU counties) 1.Import and export licences -Horizontal regulation: Reg (EC) No 376/2008. -Special regulation: Reg. (EC) No 1342/2003. -Security for all im- and export licences. Reg. 2.Import regulation 2.1Import duties -Price regulation (intervention price) only possible with import duty (protection). -Up to the beginning of 21 century, EU-prices were usually higher than world market prices. -Fixed import duties according to the common customs codex (relatively high protection e. g. wheat: 95 €/t, barley, oats).

5. 5 -Variable import duty (Durum, common wheat of high quality, rye, maize, sorghum). - -Difference between threshold price (= intervention price + 55 %) and representative import price (cif-price). - -On basis of representative US board of trade prices + premium + seafreight = cif-price (Rotterdam). - -Daily calculation, but adaption only after 2 weeks, if difference is smaller than 5 €/t. - -Additional differences:Reduction for deliveries via the Atlantic to northern MS (- 2 €/t).Import via Atlantic and Suez-Channel into Mediterranean countries (- 3 €/t).Import via Atlantic harbours into Portugal and Spain (- 2 €/t). -Paying of import duty on the day of importation.

6. 6 2.2Community tariff quotas 2.2.1 Common wheat of a quality other than high quality from third countries (Reg. (EC) No 1067/2008) -3.113.030 t; opened on 1 January every year - -Duty: 12,- €/t. -4 subquotas - -I. 572.000 t for USA - -II. 38.853 t for Canada - -III. 2.378.387 t for other countries - -IV. 122.790 t for all third countries. -Subquota III. shall be devided into 4 subperiods: - -594.597 t: 1 January to 31 March - -594.597 t: 1 April to 30 June - -594.597 t: 1 July to 30 September - -594.596 t: 1 October to 31 December.

7. 7 2.2.2Barley (Reg. (EC) No 2305/2003) -307.105 t; opened on 1 January each year. -Duty: 16 €/t. -Applicants may not submit more than ohne licence application per week. 2.2.3Maize (Reg. (EC) No 969/2006) -277.98 t; opened on 1 January each year. -Duty: Zero. -2 Subquotas - -138.994 from 1 January to 30 June. - - 138.994 from 1 July to 31 December. -Applicant may not submit more than one Licence application per week.

8. 8 Export regulation -Not necessarily with export licence any longer. -Export licence mandatory, if export with refunds: - -Horizontal regulation: Reg. (EC) No. 612/2009. - -Special regulation: Reg (EU) No. 234/2010. - -Physical checks: Reg. (EC) No. 1276/2008. -Export refunds: COM pays at least a part of the difference between EU- and world market price to exporter. -At the moment for cereals: Zero! -In future market situations with intervention possibly reintroduced. Processed products - Import and export regulation similar to unprocessed cereals. -Coefficients.

9. 9 II: Market developments -Supply and demand (Quantities). -World market / EU market. -Prices, also in the long run. -Forecasts.

10. 10 Source: EU-Commission

11. 11 Source: EU-Commission

12. 12 Source: EU-Commission

13. 13 Source: EU-Commission

14. 14 Export refunds total

15. 15

16. 16

17. 17 Trends in market development -Over the long run; continously increasing production and demand. -Growing wealth (income elasticity >zero). -Shift to meat consumption (= cereal consumption). -Relatively high prices.

18. 18 III.Consequences for intervention -A situation with decreasing stocks on world market is possible. -Prices are far above 101,31 €/t (= intervention price). -So at the moment: There is no intervention. -This is very likely to continue, if one looks at average prices. -But: Increasing volatility on agricultural markets, also for cereals. -This means: The prices can also drop to intervention level again and intervention can in future be reopened. -Therefore: An intervention agency must always be in the position to handle intervention! -This will most probably occur in regions (far) away from the main markets.

19. 19 IV.Conclusions - Every MS has to find his own way, how to manage intervention (susidiarity). -Concerning public warehouses this can e. g. be a special national law for intervention or a management on the basis of contracts with private storage keepers (German way). -Knowledge about management of intervention agencies in other MS is helpful to build up an intervention agency in an accession country. -Keep knowledge about intervention in the agency.

20. 20 Thank you very much for your attention