SPEECH/11/829
Dacian Cioloș
Member of the European Commission
responsible for Agriculture and Rural Development
Towards a more competitive
sustainable agriculture
Coldiretti Conference
Rome, 29 November 2011
and
Thank you for your invitation to this Conference. After the presentation of our reform
proposals on October 12, this is a good moment to discuss various elements of the
proposals with you. And I am particularly happy to share the platform today with
Paolo De Castro and Giovanni La Via of the European Parliament, because this
reform will be the first time that the EP has full co-decision on CAP reform. IN other
words, the final negotiation will not only be negotiated among the Ministers of
Agriculture of the 27 member states, but also with MEPs.
I have read in the press many different interpretations of the reform, so my aim this
morning is to make clear the objectives behind the reform and some of the various
tools we will use to obtain those objectives. I want to underline the importance of an
EU approach to the reform.
A major objective of the reform is to provide the tools to provide both growth in
agriculture and sustainability. If not, if is difficult to justify the CAP as a public policy.
We have made proposals which maintain direct payments (but with a better, more
targeted distribution); we will have an improved organisation of the markets (not just
the existing private storage aid and public intervention tools; but also a more rapid
response mechanism, and measures to boost producer organisations); and also a
Rural Development policy which should address the challenge of innovation more
than ever before, as well as continuing investment and structural change. These
are key elements to assure the competitiveness of agriculture in the longer term
and therefore of productivity.
Direct payments: Within the overall debate about future policy – and within the
budget negotiations too – we are keen to underline that the CAP is not just for
farmers, but for all EU citizens. We believe that Direct Payments are justified
because production costs continue to grow more quickly than prices, but we need a
more understandable system. As a result, we are looking to better structure our
system to be easier to explain. This entails a certain redistribution of funds both
between member states and within member states.
At the same stage, in order to provide more transparency, we are looking to define
30% of the direct payments as a payment for the provision of environmental public
goods – the so-called Greening – and the remainder will be defined as a basic
income payment for farmers.
The need to adapt the system of direct payments to reality:
Under the current rules, we have a system of direct payments in the EU-27 which
sees an average payment per hectare of roughly 270 €. However, if you look at the
average amounts of payments in each member state, we see a variation from more
than 200% of the EU average in some, and less than 40% in others. We need to
change this, and so we are proposing modest changes - with those that get less
than 90% of the EU average getting an increase (by one third of the gap between
where they are and 90% of the EU average). This will mean a modest reduction in
the envelope for some countries, but we are proposing this with a transition period –
such that there will be a reduction of 4.7% in the envelope for Italy over the whole
period, and 6% in the final year. Of course those member states that will lose out
are critical, and those that gain insist that it’s not enough, but I believe that we have
put a proposal on the table which is both reasonable and politically realistic.
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We looked at different criteria for distributing aid. We do not believe that it makes
sense to base allocations after 2013 on historic references – ie production levels
from 2000-2002 – so we are proposing to move towards an area basis. This is
perhaps not perfect, but we want an EU approach and an area basis is a way of
taking into account both the goods rewarded by the market, and those that are not
rewarded by the market.
For the payments within a member state, we are not insisting on an equal payment
throughout the country, but we are providing flexibility with a view that producers in
each homogonous region have equal treatment.
Capping : By redefining most of the direct payments as direct income support, it is
only logical that, with economies of sc ale, there comes a moment when we can no
longer justify lower the level of support payable. We are therefore proposing to
lower the level of support above €150 000 and cap the support at 300 000.
However, we will make an additional allowance for labour costs. One further key
point is that any funds generated will stay within the member state – and be
available in the Rural Development envelope, for example for investment in
innovation.
Active farmers: We have always tried to target our payments towards active
farmers. However, there remain a few loopholes in the current system, which have
led to a limited number of highly publicised cases of “sofa farmers”, or speculators,
or airports or golf courses benefitting from CAP payments. Consequently, we are
looking for a tighter definition in the reform which will exclude these non-active
producers – above all without endangering the WTO-compatible nature of our
payments. (Decoupled CAP direct aids are defined within the WTO “Green Box3 –
ie not subject to future reduction – as they are not linked to production.) Our
proposals look to exclude very large companies which only have a small agricultural
interest, but we are also giving some flexibility to member states to exclude those
that have land but do nothing.
On the so-called Greening – for 30% of the direct payment envelope – we
considered a menu of options with regional flexibility, or an EU-wide approach. In
the end, we have proposed an EU-wide approach because we want the same rules
on the single market and we can also underline the effect en masse that we will
have if all EU farmers do the same thing. But also because we have additional
options through our Rural Development policy which allows member states to
respond to the specificities of particular regions, which will be available in addition to
Greening payments.
The 3 measures we are looking for – crop diversity, maintaining permanent pasture,
and having 7% ecological focus area – are all elements which fit in with good
agricultural sense. I do not think t will be a major problem for Mediterranean
agriculture. For example, fruit trees or olive groves will not face the diversity
requirements and will probably be able to fulfil the 7% requirement through the
existing terracing and fields margin structures.
Let me now move to the position of the famer on the market. The proposals
include a number of important elements. Firstly we are looking to extend the system
of producer organisations to all sectors, not just fruit & vegetables. In future, if we
want to strengthen market support, it is much easier to go via Producer
Organisations. The concept is not only good for helping farmers to be better
organised, but they can also get operational funds via the 2nd Pillar to help with
common investment.
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We are also introducing more flexibility to the Commission to respond rapidly to
market crises – with a special fund – which can take account of elements which go
further than just a fall in prices, the usual triggers for Private storage aid and pubic
intervention.
We are also providing an extended toolbox which will allow producers to pay into a
mutual fund – and receive a payment if there’s a threat to revenue. This should
reinforce the existing insurance options available.
Let me just close by mentioning 2 other dossiers which are of great interest to Italy.
Firstly, the quality dossier, proposed at the end of last year, is under negotiation –
and we hope, with the help of the European Parliament, to be able to have a deal
before the end of the year.
Secondly, on promotion – where the role of quality products both on EU and nonEU markets will be particularly important – we shall be coming forward with a
Communication early next year, with a view to presenting legislative proposals
before the end of the 2012.
Thank you
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