Dr Wolfgang Burtscher from the European Commission presented the content of the Health Check, and started by saying that this is not a further reform; it is building on what was decided in the Common Agricultural Policy in 2003. He emphasized the need for stability and predictability, but also made it clear that there is a need to streamline and modernize the Agricultural Policy, and make it fit for new challenges.
The proposals from the European Commission are not to be seen as absolute, the EC is inviting to a debate. In May 2008 there will be a concrete proposal presented to the European Council and Parliament, but before then the Commission will gather views and opinions from the stakeholders in the industry. (Read more about the stake-holder consultation>>)
Dr Burtscher briefly presented the three main parts of the Health Check:
- Simplified and more efficient farm subsidies, where member states can allocate the Single Farm Payment in a uniform way.
This could mean introducing a ‘flatter rate’ system for Direct Payments, increasing the rate of decoupling, gradually reducing the support level to big farms, increasing the amount of land required to get support and reviewing the Cross Compliance standards which farmers are obliged to respect to receive their support.
- Making the market support instruments relevant for a EU of 27 member states.
This could mean using intervention as a safety net as it was intended, abolish the set-aside and phase out the milk quotas by 2015, and possibly allowing a gradual increase to allow a ‘soft landing’.
- Responding to new challenges: risk management, fighting climate change, water management, the bio-fuel issue and preserving biodiversity.
To face these challenges the Rural Development needs strengthening, and the EC proposes an eight per cent increase of the ‘modulation’ (a redistribution of the direct payments from the so-called ‘first pillar’, which deals with the market regulation, to the ‘second pillar’ dealing with the rural development) from the current 5 per cent to 12 per cent by 2013.
For more details on the content of the CAP Health Check click here>>
For a glossary of the EU CAP click here>>
Dr. Gerd Müller, state-secretary at the German Ministry of Agriculture, pointed out the need to protect those that have invested in their farms, by providing a stable and predictable agricultural policy. The European competitiveness has to be increased and there are great opportunities in the market that European agriculture needs to seize. The increased food consumption in China is one of them, considering that 21 per cent of the world’s population lives in China, and that the country only possesses seven per cent of the arable land area in the world.
Dr. Müller and the President of the German Farmers’ Association (DBV), Gerd Sonnleitner, agreed with the Health Check on several points, like the de-copuling, the abolition of the set-aside, and the reduction of administration. They also discussed the need for international standards.
They objected to the proposed cut-backs of Direct Payment, and Müller warned about the effects of capping the direct payments for large farms. He said that 90 per cent of this kind of cuts would hit East Germany, and lead to many lost jobs.
Both Müller and Sonnleitner were against the 2 per cent increase in quota, which the European Commission has proposed to ensure a ‘soft landing’ when the milk quota is abolished in 2015. This increase would, according to Müller, give the wrong signals, and he also pointed out that the overall quota in Europe is not filled. The need to protect the less favoured areas in Europe was also discussed.
During the panel discussions the modulation increase proposed by the EC was heavily criticized by Sonnleitner and Dr Christian von Boetticher, (Minister for Agriculture, Environment and Rural areas of Schleswig-Holstein) Their arguments were that it is wrong to decrease subsidies in the 'first pillar' (which finances direct payments to farmers), by taking from farmers who are not receiving anything from the second pillar (which finances the rural development), without giving them any compensation. “What is needed now is stability and dependability in this volatile market. We need to be able to depend on what has been promised until 2013”, says Sonnleitner.
The General Director of the French Farmers’ Union, FNSEA, Patrick Ferrère agreed with his German colleagues, that the financing of the second pillar should not be reallocated from the first pillar. He agreed that it is important that the Agricultural Policy safe-guards the diversity and the agricultural heritage. But if enough funds have not been allocated for Rural Development, the farmers should not have to bear the burden.
In the panel only Professor Hubert Weiger, from the German association for the protection of the environment, agreed with the EC’s proposed strengthening of the second pillar, the Rural Development and modulation. To have a thriving agriculture in 2013 more funds for village renewal and for creating new jobs are needed. He also pointed out the need for water regulation, since we are over-using water in Europe.
The CEO of Nestlé S.A., Peter Brabeck-Lemathe, also dedicated a large part of his presentation to water scarcity and water management. He said that according to the US department of Energy it takes 9 100 litres of water to produce 1 litre of bio-diesel, and that 30-60 per cent of the available water is lost to infrastructure, in leaking pipes. He also showed an example from Oman where farmers pay for water according to an agreed rate. This could be a possible solution to the water scarcity problem in the world, he suggested, but as long as there is no price on water we cannot solve the problem. |