Speech van Commissaris Fischer-Boel over het Europese landbouw- en plattelandsbeleid (en)

SPEECH/06/358

Mariann Fischer Boel

Member of the European Commission responsible for Agriculture and Rural Development

The direction of travel of the EU's policies on agriculture and rural development

Speech to the Latvian Parliament

Riga, 8 June 2006

Madam Speaker, Honourable Members,

I am honoured to have this opportunity to address the Saeima.

I always feel a sense of history when I stand up to speak in a national Parliament. And I certainly have that sense today, here in Latvia - a nation which has known so many struggles and victories during its rich and eventful past.

Who could have foreseen 25 years ago that, not far into the future, Latvia would once again have a sovereign elected assembly? Who would have predicted that this assembly would be freely inviting visitors such as myself from not only eastern but also western Europe? More than that: who would have dared to suggest that, shortly after the turn of the century, Latvia would be a full and valued member of the European Union? At times, history can move quickly.

But although we must keep a keen sense of where we have come from, we also need to have an idea of where we are going.

I see that Latvia is currently reflecting on what it wants out of membership of the EU, just as the EU as a whole is reflecting on many aspects of how it will run itself in the future.

As these general debates develop, we must also have goals in mind for individual areas of policy. And I can tell you today that I have a clear sense of direction for the policy areas for which I am responsible: agriculture and rural development.

What is our direction of travel? It is this: we are trying to give our farmers and rural areas what they need to make their full contribution to the EU - doing business in a competitive way, caring for the natural world, growing as strong communities.

Ongoing reforms to the Common Agricultural Policy (CAP) are making a large contribution to achieving these goals.

The CAP is changing - fast. In 2003, agriculture ministers agreed that the vast majority of direct payments made to EU farmers should no longer depend on production. This liberates farmers to make choices according to what the market wants, rather than according to the best combination of subsidies on offer.

This new type of direct payment also gives farmers an incentive to be good stewards of the land, because they receive the money only if they respect demanding standards of environmental care, animal welfare and public health.

In any event, the Commission will take a thorough look at how the reformed CAP is performing around 2007 to 2008; I sometimes refer to this as the "CAP health check".

Let me be clear about the objectives of the health check. We will be making adjustments, if necessary, to make sure that the newly reformed CAP is working as it should. I do not think this will be the moment for a further fundamental shake-up.

Given that a review of the overall EU budget will be taking place in 2008 - 2009, we may come under pressure to find savings in the CAP. But this is certainly not my goal for the next few years. As I have said, I want the policies that are right for our farmers and rural communities. It is very important to give predictability to farmers.

While we implement the general reforms begun in 2003, we are also extending the process of reform to further agricultural sectors.

The sector on which the EU has most recently taken key decisions is the sugar sector.

Those decisions were tough decisions to make. The Commission knew that its reform proposals would mean lower sugar production in some Member States, and therefore job losses.

But if we proposed strong medicine, that was because the sugar sector was getting into a dangerous condition: supply and demand were simply not going to balance in the coming years, and if we did nothing we were faced with the total collapse of the sugar sector.

I believe the package on which we eventually agreed strikes a fair balance: plenty of measures to put producers on a more competitive footing, but also plenty of measures to assist a process of restructuring where sugar production will not be viable in future.

I know that Latvia's sugar industry feels under pressure in this situation and has asked particular questions about the way forward; we are working hard to give good answers.

Other sectors due for reform are wine and fruit and vegetables.

Where appropriate, changes for these sectors may follow the same lines as the general reforms of the last few years. On the other hand, the Commission is not being dogmatic. Insofar as these sectors face problems which are specific to them, we are also looking at specific solutions.

So far, I have spoken mainly about what we call the "first pillar" of the CAP - the part which deals with agricultural production.

But of course, the health of our rural areas depends on more than farming alone, which is why the CAP has a "second pillar" of growing importance: rural development policy.

We have now done much of the necessary work to ensure that rural policy can do its job effectively in the EU's new medium-term budgetary period, which will run from 2007 to 2013.

We have a new set of rules which considerably lengthens the menu of rural projects for which Member States can draw EU funding. The rules leave Member States a great deal of freedom, but will nevertheless ensure balance between different sorts of goals - related to competitiveness, the environment, diversification and the quality of life in rural areas.

We also know - after heated debate! - how much money we have in the pot. It's less than the Commission wanted. We proposed a rural budget of around €89 billion for the period 2007 to 2013; the Council and the European Parliament agreed on just under €70 billion.

Finally, Madam Speaker, no account of where the EU's agricultural sector and rural economy are going could be complete without a few words on the current WTO round.

It's no secret that we are running out of road. The talks have made only stumbling progress since we failed to reach an outline agreement by the end of April. And the US administration will soon lose its fast-track negotiating authority.

The ministerial meeting coming up at the end of this month will therefore be a make-or-break moment.

I can assure you that I and my colleague, Trade Commissioner Peter Mandelson, will put forth every gramme of strength to make a deal possible. We may still be able to make a few adjustments to our offer on agriculture to oil the wheels of negotiation.

First, we are not going to sell out the farmers of the EU: our fellow WTO members must not expect us to advance significantly beyond the agricultural offer which we have already put on the table.

Secondly, any final agreement must be balanced. There must be balance within the agricultural section of the talks, with concessions from our trade partners to match concessions from us. And there must be a genuine commitment to lowering barriers to trade in industrial goods and services - not just "paper cuts".

Madam Speaker, Honourable Members, this concludes my explanation of the direction of travel of the EU's policies on agriculture and rural development.

Thank you.