Local view for "http://purl.org/linkedpolitics/eu/plenary/2016-12-13-Speech-2-596-000"
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"en.20161213.29.2-596-000"2
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"Madam President, volatility is a fact of life in farming and we have seen this work to positive effect quite recently. The sugar beet price is going up; all the surplus beet that farmers produce in the UK this season will be paid for at the full price. Next year there is going to be a higher price. For milk, the price is going up. It does work that way around.
In October farmers sowed a wheat crop. In that month they had the opportunity to sell that crop for GBP 130 a tonne for the following November, 13 months later. They had that opportunity because of a futures market. They could also, by using a futures market, have bought an option to have sold their crop for GBP 130 per tonne; that would cost them GBP 7 per tonne. In other words, they were guaranteed a rock bottom price of GBP 123 per tonne. If the price was higher than that they could take it. But futures depend on speculation: one-third speculators, one-third producers, and one-third users of the commodity; it has to be in that ratio. But the EU, through its MiFID legislation, is trying to get rid of the speculators. It is trying to de-speculate. If you de-speculate the futures market then you do not have a futures market and so the farmers cannot benefit.
Things sort themselves out. The potato futures market collapsed 20 or 30 years ago because it was over-speculated; this can happen. Of course we have another tool and the Commissioner did mention it: the annual farm payment, whatever you like to call it. In poor years, well, this is your prop – what you lean on. In good years, it is a chance to re-invest in your business. So the combination of futures markets and the single farm payment should keep most farmers going along pretty nicely. Remember, farmers are businessmen, they are in there to take risks and make a good profit. They are not the employees of the state working on nationalised land."@en1
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