SPEECH/99/88
Dr. Franz FISCHLER
Member of the European Commission
responsible for Agriculture and Rural Development
Organic farming and the new common
agricultural policy
Conference on Organic farming in the European Union the prospects for the 21st century
Baden/Austria, 27 and 28 May 1999
Ladies and Gentlemen,
I should also like to add my own thanks to those of my colleague Ritt Bjerregaard
our conference hosts. The Austrian Ministry of the Environment, Youth and Family
and the Ministry of Agriculture, the Land government of Lower Austria and - "on my
honour" - Agrarmarkt Austria have put together an impressive programme,
providing the right platform for examining the prospects for organic farming from all
angles. I should like to begin my speech by taking a closer look at the conditions for
organic farming that we have created in the European Union. Then I should like to
point out which parts of Agenda 2000 are designed to promote the "greening" of
farming, which will of course be of special benefit to organic farms.
Finally, in the last part of my speech, I will outline the future prospects, because, as
we all know, we cannot afford to rest on our laurels.
So what is the state of play in organic farming today? It is currently one of the most
dynamic sectors in agriculture in the European Union. Demand is on the increase in
the European Union, North America, Japan, Australia and in some of the developing
countries. The percentage of food trade in the European Union accounted for by
organic products has risen from 1% to 3%. Market experts expect this share to
double or even treble over the next few years.
Between 1993 and 1997 the area of organically farmed land more than doubled
from around 890 000 ha to 2.2 million ha. Over the same period, the number of
recognised organic farms and farms converting to obtain organic status rose from
35 000 to almost 97 000.
This development is part of the general trend towards a new relationship between
consumers and farming. Firstly, food safety and quality are becoming more and
more important criteria for consumer demand. Secondly, there is growing
recognition of the need to minimise the negative environmental impact of farming
and increase its positive external effects through sustainability.
Safety and quality
Of course, all foods are covered by safety and quality guarantees, and these have
been and are being constantly improved. However, organic farming is also subject
to additional, special requirements as regards production and processing. In the
case of crop products, these requirements are laid down in Regulation (EEC) No
2092/91, and in the case of animal products, the Commission submitted a proposal
to the Council and Parliament some time ago, and I hope it will very soon be
possible for the Council to adopt a Decision. In crop production, only specified
fertilisers, soil improvers and plant protection products are allowed. Processing is
governed by strict limits on the use of additives and processing agents. There are
also clear rules on controls, labelling and imports from third countries. The
Community system also protects against impostors jumping on the organic
bandwagon. Consumer reaction has been very positive, and I am convinced that
with this Regulation the Community has been instrumental in the success achieved
by organic farming.
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To make it easier for consumers to find their way around and thus improve the
chances of success on the market for organic products, we have proposed that a
Community logo should be introduced for organic products side by side with the
labels already used by organic associations. The draft shows an ear of corn blowing
in the wind and the European Union stars on a blue background framed in green.
We hope that this logo will be just as successful as the label for regional
designations of origin which we introduced in 1998.
Let there be no mistake: in my view it is imperative that the common agricultural
policy should address the need to guarantee and improve safety and quality
standards. We have made considerable progress in recent years and will continue
to develop our standards and uphold them at international level. The recent dispute
over hormone-treated meat imports from the United States is evidence that not all
our trading partners take the same standpoint. We must therefore take advantage
of the forthcoming round of negotiations in the World Trade Organisation (WTO) to
highlight the importance of consumer and environmental protection.
This is necessary, because the original purpose of the GATT was to restrict trade
distorting measures and it therefore includes only few provisions which deal
explicitely with the environment or with production standards. Nevertheless, there is
a general understanding that every WTO Member State is authorised to establish
environmental norms as long as they do not create an unjustifiable discrimination
between countries, or a disguised restriction on trade.
However, European farmers are not the only farmers who produce organic food or
produce according to high standards. Quality and safety are essential elements of
the European model of agriculture, but high standards will not prevent us from
competition and imports. It is a misunderstanding, that our European level is so
much higher than in other countries, that no food would comply with our
requirements and would be allowed to enter into the common market. On the
contrary, farmers in third countries have very well adapted to growing consumer
requirements and high quality production. The recent debate on hormones, for
instance, has changed the perception of many US-consumers and the farmers will
have to accept this development.
Up to now, WTO has taken a quite critical position concerning production norms
and procession methods as far as these have been used for unilateral trade
restrictions, because they would constitute an extra-territorial interference with other
countries. A possible way out would be to establish multilateral agreements on
commonly applied standards outside the narrow WTO process. Sanctioning of nonrespect of these provisions could be linked to WTO ruling. However, to achieve
such a multilateral agreement is a heavy procedure often stretching over several
years.
In any case, our rural development measures including support for organic farming
have been notified as green box measures. As such, there is no requirements for
them to be reduced.
The original purpose of the GATT was of course to restrict trade distorting
measures. Therefore it includes only few provisions which deal explicitely with the
environment or with production standards. Nevertheless, there is a general
understanding that every WTO Member State is authorised to establish
environmental norms as long as they don not create a unjustifiable discrimination
between countries, or a disguised restriction on trade. As a general rule, trade
measures must be non-discriminatory in dealing with domestic or imported
commodities.
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However, it would be a misunderstanding to expect
Up to now, WTO has taken a quite critical position concerning production norms
and procession methods as far as these have been used for unilateral trade
restrictions, because they would constitute an extra-territorial interference with other
countries. A possible way out would be to establish multilateral agreements on
commonly applied standards outside the narrow WTO process. Sanctioning of nonrespect of these provisions could be linked to WTO ruling. However, to achieve
such a multilateral agreement is a heavy procedure often stretching over several
years.
In any case, our rural development measures including support for organic farming
have been notified as green box measures. As such, there is no requirements for
them to be reduced.
The environmental requirements
I should now like to move on to the second part of my speech and outline how we
intend to apply the overhauled agricultural policy to "green" farming in general. Ritt
Bjerregaard has already discussed this in detail.
The integration of environmental concerns is – as agreed by the heads of
government in Amsterdam – an objective to be pursued by all Community policies.
Agricultural policy has long recognised its responsibilities in this area, farming as it
is being the main user of land and other natural resources. To stand the test of
time, farming must therefore ensure that our limited resources are exploited in such
a way that future generations can continue to enjoy them. Sustainability is nothing
less than that.
Europe's farmers, and agriculture politicians, also know that they are not the only
ones to live and work on the land. Sustainable exploitation of natural resources
must therefore bring all parties involved together in an integrated approach to rural
development. This is one of the main results of the Cork conference I organised in
Ireland in November 1996. The principles set out in the final communiqué were the
starting point for the Agenda 2000 proposals on rural development which were
accepted by the Council of Ministers without too much wrangling.
To implement our new rural development policy, the Member States and regions are
required to submit integrated programmes by the end of the year. The main new
feature is that all rural areas can be included, and all development measures are to
be combined in one single programme. A wide range of measures are available
from which programme managers can select those best meeting the development
requirements of the particular region. However, all programmes and thus all regions
are required to incorporate the agri-environmental measures on offer.
Agri-environmental measures
Agri-environmental measures are at the heart of our strategy, as they allow us to
reward environmental conservation services and stewardship of the countryside,
and go beyond the basic requirements of good farming practice.
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Agri-environmental measures include land use in compliance with the aims of
environmental protection and upkeep of the countryside, extensification and
promotion of low-input farming methods, organic farming, maintaining valuable
biotopes, landscape protection, preserving traditional elements of the landscape
and biodiversity.
As in the past, financial support for farmers is to be calculated on the basis of lost
income and the additional expenditure generated by special environmental
requirements. Limited financial incentives may also be provided to make
participation in these schemes more attractive to farmers. In the next financing
period the upper ceilings on Community subsidies have been raised from those laid
down for measures accompanying the 1992 reform to 600 euro per hectare for
annual arable crops, 900 euro per hectare for perennial special crops and 450 euro
per hectare for other forms of land use.
I believe that this makes an important contribution to strengthening organic farming
even further.
Other rural development measures
In addition to the agri-environmental measures, however, rural development support
measures can also be used to promote sustainable production methods and organic
farming.
In particular, I would like to draw your attention to the schemes encouraging farm
investment, which providesassistance to farmers converting or expanding their
holdings. Part-time holdings are no longer unfairly excluded from such schemes.
Balanced development of the organic farming sector rests not just on increased
organic production, but also on appropriate processing of organic products. The
Union is therefore calling for investments in the processing and marketing sectors.
As well as promoting marketing, investments should be directed towards improving
environmental protection and hygiene conditions, quality and quality control. The
possibilities for producer groups are to be discussed by a Working Party this
afternoon.
Training and further training may also be promoted in future under the rural
development programmes. Member States may choose to focus on sustainable
agriculture or organic farming.
Sustainable agriculture is also being promoted by two other measures in particular:
first, the compensatory payment for less-favoured farming areas, and second,
measures to support sustainable forestry. This possibility has been completely
remodelled under the ‘Agenda 2000’ reform package and the compensatory
payment can now be extended to areas that have to comply with specific natural
and environmental requirements, such as national parks and nature reserves.
Further environmental elements in the Agenda 2000 reforms
Under the ‘Agenda 2000’ reform package, environmental objectives have been
strengthened not only through rural development policy but in other ways too. New
elements benefiting the environment have also been incorporated into market
policy, for instance. These include the extensification premium for livestock, the
introduction of a grassland premium and tighter environmental requirements for setaside land.
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I would also like to draw your attention to another major change: we have created a
horizontal Regulation covering all the market organisations which links direct
payments to farmers to compliance with good agricultural practice. If farmers do not
adhere to minimum standards ensuring environmentally-compatible farming,
Member States will be able to reduce direct payments and use the money saved as
additional funding for rural development measures, including the agri-environmental
schemes. Whether the Member States will actually make use of this drastic
measure remains to be seen.
Future tasks
In the third part of my speech, which takes a look at the prospects for the future, I
would like to expand on three points made by Ritt Bjerregaard:
1. Decentralisation and increased flexibility are the guiding principles underlying
the new rural development policy. It is now up to the Member States to present
proposals for rural development programmes at the most suitable regional level.
They may choose those measures which best meet their needs and priorities
from the range of options provided by the new rural development regulation.
2. Consumer confidence in organic foodstuffs hinges on compliance with organic
production standards, and adequate checks. If farmers want to make full use of
the market opportunities for organic products, they have to accept these strict
standards and make sure they meet them.
3. We learn not only from our own experience, but also from the examples of
others. Looking beyond national or regional boundaries can also be an
extremely useful way to promote organic farming. The European level is ideal
for exchanges of experience between Member States and the regions.
Summary
I should like to finish by summarising the main points of my speech: as a result of
public interest in environmental issues and improved quality of life, environmentallycompatible farming methods such as integrated farming, traditional low-input
farming and organic farming in particular are becoming more and more important.
Organic farming can offer an interesting alternative for many farms, but we also
need corresponding sales channels. We have by no means exhausted the market
potential for organic products. But organic farmers will only be able to make full use
of this potential if they manage to build a bridge to consumers by linking up with the
processing sector and by intelligent marketing.
By reforming rural development policy we hope to establish sustainability as a basic
principle underlying rural development in rural areas. Promoting organic farming
through agri-environmental measures and the many other promotion possibilities
are important building blocks in this strategy.
I believe that the reform of the CAP has created a firm foundation for sustainable
agriculture. It is now up to us to make good use of these opportunities. Quality is not
created by chance: as well as funding it needs intelligent thinking and a real
determination to make things better.
Thank you for you attention, ladies and gentlemen. I wish us all every success in
this conference.
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