Toespraak van eurocommissaris Fischer Boel over de gezondheidscheck van het Europees landbouwbeleid (en)

Mariann Fischer Boel

Member of the European Commission responsible for agriculture and rural development

The CAP Health Check: an opportunity for regions

Seminar by ARF (Association des Régions de France)

Clermont-Ferrand, 25 September 2008

Seminar by ARF (Association des Régions de France)

Clermont-Ferrand, 25 September 2008

[Ladies and gentlemen],

It's a great pleasure to join you today.

This is actually the second time this week that I've had the pleasure of being in France. From Sunday to Tuesday I took part in an informal meeting of European agriculture ministers, hosted by Michel Barnier in the beautiful region around Annecy.

I certainly found those few days invigorating. Apart from an important policy discussion, we spent quite a lot of time climbing mountains and making the acquaintance of mountain goats, all in the fresh air of Haute-Savoie.

So that visit was a powerful reminder – though I don't need to be reminded – of the huge diversity that we see in European agriculture. Farming half-way up a mountain in Haute-Savoie or here in the "Massive Central" is of course very different from keeping pigs in Brittany.

And in this case, I'm just looking at two regions in the same country. If we take a step further back and compare, say, northern Finland with southern Spain, the differences are of course even sharper.

The Common Agricultural Policy is a common policy, but it also has to take account of this huge diversity in the European Union.

And it already does so to a large extent. Many of its tools are very flexible and can be applied in different ways in different parts of the Union.

In particular, rural development policy – the "second pillar" of the CAP – is designed to be rather like a piece of clothing that can "stretch" to fit just about anyone. It holds a long menu of measures from which Member States and regions can pick and choose as they see fit. On the other hand, through the use of "strategy plans", we also make sure that there's a certain coherence in rural development policy across the European Union.

Getting the balance right between coherence and flexibility in the CAP is an important task. And I can tell you that, at any given moment, there are voices calling for the balance to move one way, and voices demanding that it should move the other way.

I know that there's a discussion in France just now about the level at which agricultural policy decisions should be taken.

I should say straight away that there are aspects of this question in which the European Commission will not get involved at all. Within the CAP, national governments have a lot of decision-making powers. They also have the right to devolve some of these powers to a regional level – and many Member States already do this. This is entirely up to them: it's not my job to advise them one way or the other on this issue.

However, at whatever level France chooses to take agricultural policy decisions in future – whether your system remains as it is now, or whether more powers are handed down to the regions – we will work with you!

Nevertheless, in other respects, I certainly do take a close interest in topics of "regional" interest. And this should be clear from certain elements of the "Health Check" of the CAP, which I've been discussing with ministers over the last few months.

Just in case any of you don't know what the CAP Health Check is, I'll explain very briefly. It's not a fundamental new reform. It's supposed to build on the reforms of the last few years. It will make sure that the reformed CAP is working as effectively, efficiently and simply as possible – in a European Union of 27 Member States, and in the global context of today.

Within the Health Check, I've made proposals which could have significant consequences for regions – including in France.

One of these proposals concerns the Single Payment Scheme - or as you call it in France, the "DPU" – the scheme under which farmers receive their decoupled direct payments.

When European agriculture ministers came to agreement on the details of the Single Payment Scheme in 2003, it was decided that Member States would be able to choose between three different ways of applying the scheme on their territory.

The first approach is "historical". Under this model, the value of an individual farmer's "entitlements" to decoupled payments is based closely on the payments that he or she received in a past reference period.

The second approach is "regional". Under this model, the value of entitlements is "averaged out", on the basis of existing farmland, between farmers working in the same region.

It's also possible to take a "hybrid" approach, which averages out the value of entitlements to some extent, but not fully.

(I should add that, when the European Union welcomed new Member States in 2004, then in 2007, most of these applied a fourth model – but let's not get into the detail of this now.)

Out of the three models of the Single Payment Scheme on offer to the EU-15, all have been used. And all have been used successfully. France, of course, chose a purely historical approach.

However, within the Health Check, I felt strongly that it was time to revisit this issue.

The historical model of the Single Payment Scheme has its advantages. One advantage in 2003 was that, in some Member States, it was more politically acceptable, because farmers would "hold on" to the value of the direct payments which they had received in previous years.

But I suspect that this advantage could turn into a serious disadvantage in the years ahead.

10 years from now, will the public understand why one farmer receives a higher value of direct payments than the farmer next-door, just because of production decisions that he took nearly two decades earlier? (And in fact, this difference might not result from his production decisions, but from those of his predecessor!) I suspect that the public will actually find this hard to understand and hard to justify.

You may ask whether public opinion is important here. I think it is important. Unlike the Ten Commandments, the CAP's budget is not set in tablets of stone. It can be changed – and there are forces in the European Union which are seeking to cut it. If we want to keep the CAP well funded in the future, we must sustain and even build public support for it. This means ensuring that the CAP makes sense to the man in the street.

So I think that, as time goes on, a model based on a flatter rate of payments will have more to recommend it, and the historical model with its different payments will hold more political problems.

But I don't want to be heavy-handed over this issue. What I'm proposing in the Health Check is that Member States should have the opportunity to take a second look at their chosen model of the Single Payment Scheme – before 2013.

I'm suggesting that, if they want to make some changes, they should be free to do so. If, on the other hand, they really want to keep the historical model, then likewise: they should be free to do so.

If this proposal were accepted, and if France then chose to move to a regional model or a flatter rate – I do say "if"! – then of course many French farmers would feel that change.

Obviously, within any given region, some entitlements to direct payments would rise in value, and others would fall. This would be more popular with some farmers than with others! But let me emphasise that the change would be manageable. It wouldn't happen overnight: it would be phased in.

Also, I'll say again that the long-term political benefit could be substantial. I believe that the public would understand this approach much more easily, and that farmers would therefore have to spend less time and energy justifying their direct-payments cheque.

I don't want to talk for very long today, but I should mention some other ideas in the Health Check which are very relevant to the regions of France.

At present, there's a rule in the CAP which allows Member States to take money out of direct payments related to a given sector and use that money on specific measures – related to product quality, marketing or the environment. We refer to this as "Article 69".

Within the Health Check, I've proposed to make this article - which will become the new "Article 68" - much more flexible, so that it can address a wider range of challenges faced by European farmers. For example, under my proposals, it could be used to help farmers in regions which specialise in the dairy, beef, sheep and goat sectors.

As you know, in the Health Check discussions I've received some very particular requests from the French government – for extra support for the sheep and goat sector, and more generally, for a new form of the grassland premium, the "prime à l'herbe".

I won't say too much now about the precise ideas on the table. But be assured that I'm taking the requests very seriously. Minister Barnier and I are looking for the best solutions.

However, one word of caution. Whatever changes we end up making to the first pillar of the CAP through the Health Check, it's imperative that our system of direct payments remains essentially decoupled and essentially simple. We must not re-introduce large-scale coupled payments by the back door; and we must avoid complicating the system by adding lots of bells and whistles.

As I said earlier, the part of the CAP that is designed to be highly flexible and to address a wide range of challenges is rural development policy – and that should still be true after the Health Check.

Furthermore, we need to give rural development policy more resources than it's currently getting.

Its key missions under our current rules are as important as ever: boosting competitiveness, supporting care for the environment, encouraging economic diversification, and raising the quality of life in rural areas.

But as you know, the Commission has also picked out some specific developing challenges to which rural development policy must give us some answers. These are:

fighting climate change; managing water better; making the most of renewable energy; and protecting biodiversity.

My proposals related to these challenges are not an afterthought in the Health Check: they are a central plank.

Make no mistake: agriculture will have to contribute to the European Union's overall goal of cutting greenhouse gas emissions by at least 20 per cent by 2020 (compared with 1990 levels). And it must adapt to the climate change which is already occurring. We can give farmers policy support in this area, or we can leave them to struggle alone.

Likewise, farmers have been suffering because of high oil prices – not for the first time ever, and almost certainly not for the last time. But rural development policy offers measures which can help them to carry this burden more comfortably.

For example, it offers support to increase energy efficiency, as well as to start producing bioenergy – for use on the farm or for sale.

Of course, the money for all this has to come from somewhere. This is why I've proposed in the Health Check to raise the rate of compulsory "modulation" (in other words, the cash taken out of direct payments to farmers, and transferred to the rural development budget).

Modulation is a very hot topic in some Member States. But I really believe that increasing it is essential. The challenges that I've mentioned are very serious, and we must respond. We can't just sit in our chair and hope that the storm will pass: it will only get worse. (That's true quite literally – though of course in some regions, the problem will be that we get too little rain, not too much.)

Let me draw to a close.

Will the Common Agricultural Policy remain a "common" policy in the future? Yes.

Will it also remain a flexible policy that can cope with the diversity of Europe's many regions? Yes.

Will we continue to work hard to strike the right balance between coherence and flexibility? Yes.

I know I can rely on your help in this work.

Thank you.