Brussels, 19 March 2002
Enlargement: Fischler's gives CEEC farm ministers "10 good reasons" for Commission proposal
Speaking to the Farm Ministers of the EU-15 and the 13 candidate countries today, Franz Fischler, Commissioner for Agriculture, Rural Development and Fisheries called on both sides to be realistic as regards negotiating objectives. "In particular the candidate countries should shape their negotiating approach in a realistic way. It is of crucial importance that you do not raise false expectations amongst farmers. To insist on 100% direct payments and make this point over and over again will not be a winning strategy. Look at the whole package, which is much broader. I think it's time to start stressing the positives. It is clear that the negotiating margins are narrow. This has been understood in some countries, whereas I am concerned about the confrontational statements I hear from others," he said. He presented "10 good reasons" for the Commission enlargement strategy (see IP/02/176), which foresees massive rural development support, while phasing in direct payments over ten years. "A new study (see IP/02/428) clearly shows that the integration of the new Member States in the Common Agricultural Policy (CAP) is very likely to become a success story. The income situation of the farmers in the new Member States will improve significantly, " he stressed.
Mr Fischler gave "10 good reasons" in favour of the Commission proposal :
Membership of the EU will significantly improve the prospects for farmers in the candidate countries, without creating major market imbalances for an enlarged EU.
Prospects outside the EU for farmers in the candidate countries are poor, particularly for beef and dairy products.
The Commission package provides massive support for the restructuring process. These rural development programmes together with structural support will offer considerable opportunities for farmers in the candidate countries to improve their income situation.
The lower level of direct aid support proposed (starting with 25% in 2004) over a 10-year transition period still ensures that all CEECs experience positive income effects as a result of enlargement. The Commission however considers this level of direct income support necessary, as this would stabilise incomes without compromising the process of restructuring.
Full direct aids would lead to very strong income effects undermining incentives towards labour restructuring and creating social distortions and inequalities.
The Commission proposal takes account of the fact that there is great diversity in the agricultural sectors in the candidate countries. It is for this reason we have proposed a package with many options to tailor support to the needs of the candidate countries, such as the possibility to implement direct payments in the form of a simplified scheme, scope for national top-ups of direct payments to pre-accession level and a reinforced rural development package.
The simplified scheme for direct payments offers the new member states the possibility to lighten the administrative burden in the early years. The implementation of the rural development policy will facilitated by the fact that it will build on the experiences gained from the pre-accession programme SAPARD.
The package is balanced and ensures that benefits of membership are felt throughout the farming community in the candidate countries
100% direct payments would be counterproductive, although their effects differ from candidate country to candidate country. They would lead to negative effects on land markets and the balance of crop production, to the undermining of incentives towards restructuring towards EU standards, to the slowing of labour restructuring, to considerable income disparities and social distortions in rural societies and/or to potential significant transfers to urban landowners.
The proposals are fully compatible with the roadmap for enlargement and the Berlin financial perspectives.
The Commission proposal on agriculture and enlargement
On 30 January 2002, the European Commission set out its strategy for dealing with the EU's enlargement negotiations on agriculture: direct payments to farmers and the level of production quotas for the new member countries once they join the EU in 2004. To ease the problems of transition in rural areas, and to encourage the necessary restructuring of the new member states' agricultural sectors, the Commission proposes to beef up financial support through an enhanced rural development policy. Given that immediate introduction of 100% direct payments would serve to freeze existing structures and to hamper modernisation, the Commission favours a gradual introduction of direct payments over a transition period of ten years: for 2004, 2005, 2006 direct payments equivalent to 25,30,35%, reaching 100% in 2013. According to the proposal, this aid could also be topped up with national funds. The new member states would however have full and immediate access to Common Agricultural Policy (CAP) market measures, such as cereal intervention.
In order to ensure simplicity and to ensure adequate controls from the first day, the Commission has proposed a simplified direct payments system for the first three years, with the option of a prolongation for two more years. The new member states should have the option of granting direct payments in the form of an area payment, de-coupled from production and paid per hectare. The Commission also proposes to determine production quotas for sugar and milk essentially on the basis of average production over the years 1995 to 1999.