I listened closely to European Commissioner for Agriculture Phil Hogan at the Agricultural Science Association conference held last week near Naas. He had a number of points but, as he himself would admit, there is no silver bullet. The conference is covered in detail in this week’s edition but a number of points in the Commissioner’s address struck me forcibly. The first and most important was the acknowledgment that direct payments are now the foundation stone of the CAP.

This acknowledgment comes at a sensitive time, with the Commission due to publish a communication on the future of the CAP before Christmas. The present system lasts until 2020 and then it is all up for grabs again. The recent publication from the OECD – an economic thinktank of the world’s richest economies – showed how dependent the European grain and beef sectors are on these direct payments, unlike dairy where reasonable world prices and recognised European quality have made the sector almost totally self-reliant.

This 70-page report was drawn up by a distinguished group chaired by one of Europe’s leading agricultural thinkers, Cees Veerman, a farmer, former Dutch minister for agriculture and chancellor of Wageningen University. It was charged with formulating proposals for strengthening farmers’ place in the food chain. I found their conclusions focused and valuable if there is the political will to implement them, such as greater legal protections for farmers and co-ops to combine to bargain with strong buyers.

They suggested a banning of unfair trading practices such as no written contracts, removing the ability to change purchasing conditions on a whim and banning upfront payment for shelf space.

One figure that hit me was that as recently as the 1980s, the average EU citizen spent 30% of his/her income on food. Today, the figure is 13%. Food companies have more than maintained their margins, so the impact of the continuous squeeze on farmers has been enormous. Farmers have become much more efficient, but the sector’s income has been under continuous pressure. However, the food and beverage sector now returns an €18.5bn surplus in the EU’s trade with third countries – half the merchandise surplus earned by the union. While the global figures are great, the lack of the next generation going into farming as a career tells its own story.

Will the Commissioner’s aspiration of strengthened advisory services and better means of coping with income and price volatility be enough to keep an active farming population in rural areas? This is his and Europe’s key agricultural challenge. The suggestions for change are worthwhile, especially the idea that the value added at each point of the chain be quantified. Eoin Lowry in his agribusiness coverage is trying to do this in relation to the infant formula industry and the US insists on it in the beef sector. Ultimately, it would seem that nothing will happen without real legislative force being applied.

On foot of this report, Commissioner Hogan has a real opportunity to make far-reaching proposals to enhance farmer well-being and their share of food chain profitability. He could also consider the effects of own-branding.