SPEECH/08/67
Mariann Fischer Boel
Member of the European Commission responsible for Agriculture and Rural Development "The CAP Health Check: good news for variety in European farming"
Participation at plenary of the Committee of the Regions Brussels, 7 February 2008
[President, Honourable Members],
Thank you for inviting me to join you today.
As you can imagine, this isn't the first time that I've talked about the Health Check of the Common Agricultural Policy since I launched the exercise last November.
But I haven't yet found that I'm bored with explaining it to different groups and individuals. This is partly because it's so important that the exercise is understood properly. But it's also because there are so many perspectives from which we can think about the future of the CAP.
Of course, one such perspective comes out very clearly in the draft opinion on the Health Check from this Committee: the need to take into account the rich variety of the European Union's farms and countryside.
I'm all for variety in life.
When I go back to my homeland, I feel proud of the very profitable pig farms that have made Danish bacon famous around the world. But this doesn't mean that I want to see the whole of rural Europe turn into one gigantic pig farm.
In the same way, like many people, I rather enjoy visiting the picturesque vineyards of the Mediterranean. But this doesn't mean that I think trying to make Chianti would necessarily be a helpful project in the Highlands of Scotland.
The variety of European farming has been a tremendous strength in the past. And yes, it has a place in the future.
How should we support this diversity through policy?
Certainly, not by drawing up a blueprint centrally and then deciding, in a given year, that we haven't "achieved" enough diversity and should therefore launch a new initiative.
Instead, we should put in place policies that allow individual regions to play to their own strengths. The heart of diversity is the freedom to do what you do best – with the help of certain types of light-touch support.
We've already been trying to achieve this through the CAP. And through the Health Check – which is essentially about making sure that the CAP is working as well as it could – we want to improve our record in this area.
The Committee of the Regions has raised a general point about where the ideas for the Health Check come from. In particular, you would have liked to see more evaluation of the impact of recent reforms.
Well, I can promise you that the ideas haven't just emerged from a lively imagination on my part! In fact, if you look on the agriculture pages of the Commission's website, you'll find a great deal of analysis of what has been going on in European agriculture for the past few years.
And of course, when the Commission comes forward with its legal proposals for the Health Check in May, there will be a full impact analysis to go with these.
Now let me take up some of the detailed points that you've raised about what you would like to see in the Health Check.
At the centre of the CAP of the 21st century lies the decoupled payment – the direct payment which a farmer receives irrespective of what he chooses to produce in a given year.
I really think that when we agreed to decouple most direct payments from production, we took a decision in favour of diversity. Giving the farmer the choice of what to produce not based on the type of farm support but on demand, prices and the individual's strengths and interests was clearly a step towards more diversity.
For example, a farmer is much more likely to take an interest in local quality schemes if that doesn't mean giving up the security of a payment linked to a specific commodity production.
Therefore, in principle, within the Health Check we should extend decoupling to more direct payments.
I know the Committee of the Regions has some concerns about this.
I'm not being ideological here. If there are delicate regions where full decoupling could imply serious risks, we could consider keeping coupled payments – on a case-by-case basis.
But keeping coupled payments should not be a reflex reaction. In many cases, there may be much better tools for dealing with local challenges.
You've also voiced concerns about giving Member States the option of flattening out differences between the decoupled payments received by different farmers.
It seems that some Member States would like to have the chance to do this. And to me, it makes sense. By 2013 (say), would it be fair that one farmer is getting a larger decoupled payment from Brussels than his neighbour, simply because of production decisions taken more than a decade earlier? Would the public see this as fair? I think some people might find it hard to understand.
On the other hand, what I have in mind here is the opportunity to make adjustments – not an obligation to do so.
Another idea is that a farmer's direct payments could be reduced after they've exceeded a high threshold.
We do have to look again at large direct payments, because they constantly draw public criticism and because there are large economies of scale, which above a certain level of aid justify a progressive lowering of the support. Nevertheless, I'm aware that this is a complex issue.
One thing I will say: if we introduce some kind of reduction mechanism, we should make sure that the solution does not create new problems.
I know that some farmers have had plans in their bottom drawer for exactly this kind of situation, and might simply divide up their farm to avoid any cut in support payments.
There are many elements to reflect carefully on before presenting the legal proposal, and I will listen to all stakeholders.
Let me now move onto "market instruments" – such as the intervention system, aid for private storage, and so on.
With regard to this issue, one of the phrases that you use in your draft opinion hits the nail on the head: "safety net".
Essentially, I do believe that at least some of our market tools have a valid role to play as part of a safety net. In other words, in a genuine crisis, they would help prevent farmers from being forced out of production.
Let's be clear: this is not the same thing as being a habitual outlet for production, and therefore setting market prices. We have been moving the intervention system away from this approach, and we should continue to do so.
It's right to have a safety net, but this should not slow down farmers' usual responses to market signals.
We should also bear in mind that decoupled payments play the role of a safety net to some extent. I can't think of a much better way of giving a farmer financial security than by making a regular payment into his bank account, which he receives whatever the weather is doing outside.
With regard to another kind of market tool: I'm glad you agree with me that the milk quota system is now seriously out of date. We also agree that we should prepare a "soft landing" for the system's expiry in 2015.
Where we take steps towards a soft landing, you want to see these steps supported by analysis. Absolutely. My initial proposal to raise quotas by 2 per cent this year is based on careful scrutiny of the current market situation.
We concluded that the market can take this increase. In fact, the market needs it. Alternatively, of course, we could turn our backs on the business openings which are emerging, especially in Asia, and let our friends from Oceania mop up the demand. But I wouldn’t advise this! We would find it hard to join the race later on.
The further quota increase to be proposed for the period up to 2015 will be set at a level that would allow producers to seize opportunities, but not bring the market crashing down.
At the same time, if there are economically fragile areas which really depend on milk production, I want to help them survive in a world without milk quotas – whether through rural development policy, or possibly measures under a renewed more flexible "Article 69".
With regard to the "other challenges" which our rural areas face, I think we agree to some extent about goals, but we may have one or two disagreements about methods.
Certainly, you're right, for example, that European agriculture is "highly exposed to climate change" in some regions. This is putting it mildly. Climate change could be a disaster for some agricultural zones if we don't get our act together now.
Greenhouse gas emissions from European agriculture have already fallen by 20 per cent since 1990. But we must bring them down further if the European Union is to hit its objective of cutting emissions from all sectors by 20 per cent by 2020.
Also, we quite obviously face a challenge in adapting to the climate change which is already on the way. When the sky refuses to rain for us, good water management becomes rather important!
Likewise, I agree with you that we have no time to lose in developing the right technologies to make second-generation biofuels economically viable. And the support for this must be right.
As you know, I suspect that rural development policy should provide many of the tools for meeting these "other challenges". You have doubts about this.
In Europe, with its enormous variety of landscapes, climates and habits, these challenges appear in different areas in quite different ways. If this point should be understood by anyone, I'm sure it would be by the Committee of the Regions!
There may be cases in which, when we look for solutions, one size really does "fit all". But I'm convinced that, in many cases, one size will not fit all. Very often, we will need flexibility. Rural development policy has flexibility that measures in the "first pillar" of the CAP rarely have.
Of course, a very practical problem arises from this conclusion. Where's the money? We're already trying to do a great deal with rural development policy. If we try to do even more, the butter will be spread very thinly over the bread.
This is why I've proposed that, between 2010 and 2013 (inclusive), we progressively raise by 8 per cent the transfers that we make from the "agricultural" budget into rural development (we call this "modulation").
You argue that "decisions on modulation are best taken at the appropriate devolved level". I can't agree with this. Different levels of modulation cause all kinds of headaches (we've already had some experience of this). And it seems to me that they would do something which you say you want to avoid, which is to "threaten the Community nature of the CAP".
This is all about getting the right balance between flexibility and a common approach. Let me be clear about my view.
I think there's a lot of room to make greater use of rural development policy. Member States and regions have a lot of freedom when they put together their rural development programmes. But we ensure a certain coherence across the Union through the use of strategy plans.
But I really don't think we want 27 or more different approaches to modulation. My solution is a reasonable increase in modulation – one that gives extra bite to our policy, and one that everybody can live with.
Let me conclude by saying again: the CAP Health Check should work in the service of variety in the countryside of Europe. It's not about trying to bring Danish pigs into the Alps, or make Italian vines grow in Scotland.
Let each region do what it does best, with the right support.
Finally, let me take this opportunity to thank the outgoing President, Mister Delebarre, for all his hard work, and wish the very best to the incoming President, Mister Van Den Brande. I'm sure we'll have some fruitful discussions together – and I look forward to further contributions to the Health Check from the Committee as a whole.
Thank you.
