EACH YEAR the European Commission creates a CAP crisis reserve – and each year it goes unused. The same has happened again this year, and while the amount – around €435 million – is not huge, the fund and the red tape associated with it seem pointless.
In fact this is only a paper transaction, since the unused money for 2016 will be retained and used for the 2017 crisis reserve, just as has happened for a number of years.
If the past year or so of rock bottom prices for commodities, not least milk, does not count as a crisis, it is hard to see what would meet the definition. We have struggled through that and the impact of the Russian market being closed, so major crises have been met without using this fund. 
For the Commission, knowing it is there is a security blanket. However it went unused through the dairy crisis, with the €500 million aid package coming from superlevy fines in the final year of milk quotas. The Commission is arguing that this will not happen again, and using that to justify retention of the crisis reserve.
How this is managed does not augur well if the Commission, as part of CAP reform, moves toward a phased risk management based approach. This will not affect the UK after Brexit, but risk management is about matching funds set aside to potential risk. If the Commission cannot properly run a crisis reserve, it raises questions about whether it could successfully operate a much more complex risk management model.
If the UK opts to go down this road, it will need to have some effective way of measuring risk, how to ‘insure’ against that and how to establish what level of risk farmers are willing to take. That has to be allied to some form of crisis reserve for events outside the scope of the normal risk management model. Hopefully, if it remains the front runner, Westminster politicians will come up with a better system than Brussels for a post-Brexit crisis reserve.
It will soon be six months since the referendum vote to leave the EU. While it came as a surprise, the government does not seem to be any further forwards on any front with coming up with an exit strategy that will give UK businesses access to the Single Market, while enforcing controls on immigration. This uncertainty is frustrating food businesses, particularly those with an export focus. They are also worried about what new controls they will face to access the EU market.
As things stand, there is a presumption that a business producing food in Scotland fully meets all EU regulations. There are plenty to meet in every area from safety to labelling, and on average one new regulation emerges or is amended each week. Member states police these regulations, and that is the basis of the Single Market and trading freely across all 28 EU member states.
Outside the EU, unless there is some form of deal to recognise UK regulations, businesses will have to prove they are in full compliance with EU rules. In theory that should be possible, since ministers in London say legislation will bring into UK law all EU regulations that are in force when Brexit happens. This raises questions about the point of leaving the EU if we are to have the same regulations. 
That apart, the issue is whether, when Scottish food businesses seek to export to the EU after Brexit, they will have to produce reams of paperwork to prove they are in full compliance with EU regulations. That could mean the farmers who supply them also having to continue to fully meet EU rules, even if they are no longer part of the CAP.
How seriously market access is taken depends on the deal the UK ultimately reaches over the Single Market. Success in securing that deal will depend on how keen businesses are, in what will then be the EU 27, to do business with UK suppliers. We have seen first hand how French farmers can react to food imports from countries within the EU, so it is anyone’s guess what they will do about UK products that will then be from outside the EU. 
This is just another issue on the long, long list of the negotiation to leave the EU – and the certainty food producers and farmers crave seems set to remain elusive.