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30 April 2001 - 3 p.m.


Member of the European Commission responsible for Agriculture, Rural Development and Fisheries

The EU enlargement our partnership in agriculture

International Ministerial Conference of the Central and Eastern European Countries in Lithuania

Vilnius, April 30, 2001

First of all let me say how very pleased I am to be with you today, and to have this opportunity of exchanging ideas with all of you. I regret that I missed some very interesting presentations this morning, but look forward very much to listening to you all this afternoon and to continuing our dialogue. Let me take this opportunity to thank the Prime Minister, Mr. Paksas, and you, of course, Minister Kristinaitis, and your staff, for organising this Conference.

Today you will be speaking about the benefits and challenges for future members of the Union, in the agricultural sector: this is a very vast subject, and I think I could speak about it for hours. As a national of a former candidate country, who negotiated the agricultural accession chapter with the EU, I understand very well your situation. However, let me reassure you that I will not try your patience too far! I will limit myself to a few points, and then look forward to hearing your views. The points I would like to touch on today are

  • First, not just the need to restructure your agriculture and processing sectors, but the interest for you to do so

  • Secondly, the SAPARD process and its importance for the future

  • And third, the outlook for our future together in terms of policy, and how we communicate it to the agricultural sectors in your countries.

Future Members are faced with a sometimes daunting number of challenges in the sector. We are now perhaps half way down a road on which some of the largest pitfalls lie in front of us. We must try to avoid or minimise these, in the knowledge that the medium term prospect, although still some distance away, should become smoother and we will walk it as partners.

First, let me mention the question of restructuring the agricultural and processing sectors. Membership means entering a very large and competitive market, where more than 400 million consumers will be willing to pay reasonable prices for quality goods. I believe I do not have to dwell on the changes, and sometimes vast changes which will be necessary at farm level. Restructuring, modernising, increasing productivity, reducing costs, rationalising, and meeting Community standards in spite of some efforts which already have been made, much remains to be done in this respect in most future Member countries.

As to the processing industry, here too major progress is required in terms of legislation, technical standards, and of course respecting sanitary rules. It is clear that progress in this field requires considerable investment and upgrading of facilities. Ensuring that the domestic economic environment facilitates the necessary investment in the food industry is also a necessary part of the process.

In this context, the contribution which can be made to agriculture through direct investment by international processing companies should not be under-estimated. In some cases such investments are already bearing fruit. In areas such as dairy products, and confectionary, direct investment by multinational companies is helping ensure that your domestic agricultural producers supply quality raw materials to ensure a competitive position for the processed product both at home and abroad. In others, potential investors suggest that they are meeting deliberate obstacles, which discourage their investment: this would seem to be sadly short-sighted approach.

The gradual liberalisation of our bilateral trade flows helps enhance open competition between our economies, and thus to avoid a shock on accession. I am very pleased that we together have managed to liberalise some 80% of your exports to the EU, and hope that we shall soon start a further round of negotiations on agricultural trade. Gradual bilateral liberalisation offers a favourable environment in which to adapt but it is up to you to ensure the opportunity can be seized.

But here I would like to stress a point which to me is of considerable importance: the restructuring and modernisation of agriculture, and the upgrading of the processing facilities in the candidate countries is not something which should be seen as a burden, or an imposition, forced on an unwilling population by that faceless dictator, Brussels. Globalisation, membership of the WTO and the increasing liberalisation of trade mean that these changes would have been required to face modern competition with or without accession.. The consumer in your countries, as in the European Union, increasingly demands safe, high quality, varied food. There is no way to insulate your producers or markets from this trend. It is simply not possible, even for a country outside the Union, to avoid making major adjustments in both primary production as well as in food processing. No country has a policy option of pretending that, despite technological changes that characterise agriculture, it can isolate itself from the need to modernise.

And the interest for your countries of such modernisation is obvious: everything which contributes to a more productive agriculture, and a more dynamic food processing industry can only be positive, in economic terms, in terms of employment and in terms of contributing to a vibrant rural economy.

What I would confidently forecast is that with our help, and with the objective of membership as an incentive, the unavoidably difficult changes which are required in many cases may be facilitated.

This brings me to SAPARD: intended to facilitate many things, currently a difficult challenge. The two main objectives of SAPARD were on the one hand to solve priority and specific problems in agriculture and rural development, and on the other to contribute to implementation of the acquis concerning the CAP and related policies. But a further aspect, which to my mind is arguably as important, is that SAPARD constitutes a learning process in applying the mechanisms for management of EU rural development programmes, which represent the second pillar of the CAP.

At the moment, we are at a delicate juncture regarding SAPARD. For understandable reasons the agricultural communities in your countries feel frustrated, as no SAPARD funds are yet flowing to any candidate country, and for some, they are still on a rather distant horizon. Possibly this is because we have had unrealistic expectations, due to a rather fast start.

After all, with commendable efficiency your SAPARD plans have been produced and approved, and both the regulation on which the multiannual financing agreement is based, and the multiannual financing agreement itself have been agreed. And now we have come to the really hard bit: the establishment of the SAPARD agencies in each of your countries.

Each of your countries has to set up, from scratch, bodies which are comparable to those in Member States and in certain respects have even more complicated tasks to perform.But Member States all had some basis from which to start, and you start from zero. It is a daunting task.

In approving your institutions you will understand that we must ensure that they are not vulnerable to the charge of mishandling the European taxpayers' money. On this the European Parliament, the European Court of Auditors, and to the taxpayers themselves are watching us. But we also need to protect you. If we rushed the process, and approved the accreditation of the Agency, and the relevant National Fund operations, and afterwards, money was spent contrary to one of the legal provisions, the money would have to be recovered, from the beneficiary or from your national budget. Worse, doubt would be cast on the ability of the country to undertake, at least in the short term, the responsibilities of a Member State. This could have major political implications.

So you are well advised to allocate the necessary technical and human resources to the task of managing SAPARD, building solid and reliable agencies with well defined operating and control systems. For that you can count on our support.

The result will be that you will have established the institutions in your countries which will not only initially operate SAPARD but subsequently be ready to operate the structural funds from day one of your accession, but with very easy adjustment operate also CAP market support mechanisms. This is an investment that in the future will be capable of paying huge dividends.

That was the second point I wanted to stress today.

This brings me to the CAP in general, and the challenge and benefit it offers to the candidate countries. I am aware that in many of your countries, the rural communities, and the farmers in particular, are frequently among the least enthusiastic members of the public regarding accession. This was also the case in my own country, Austria, just before accession. This is, I believe, due in particular to two factors: first, as I said earlier, it is not always realised that the admittedly painful restructuring process for the agricultural and food processing sectors of which I spoke earlier would have been required even if future membership were not on the cards. Secondly, I believe the CAP's objectives are not always fully understood.

What are the objectives of this famous common agricultural policy? Essentially in Agenda 2000 it was decided that they policy would aim to achieve:

    l. A competitive agricultural sector which can gradually face up to world markets without being over-subsidised

    2. Production methods which are sound and environmentally friendly, able to supply the quality products that the public wants

3. Fair standards of living and income stability for the agricultural community

    4. Diversity in forms of agriculture, maintaining visual amenities and supporting rural communities

    5. Simplicity in agricultural policy and the sharing of responsibilities between the Commission and Member States and

    6. Justification of support for agriculture through the provision of services that the public expects farmers to provide.

These objectives recognise that in the EU too, the agricultural sector is in a constant state of restructuring. The changes underway in the EU are not comparable to those you are facing, but our objectives and the mechanisms we use to pursue them have been flexible enough to cover situations as different as those in Finland and Greece, in Italy and Ireland.

And there is a broad consensus that the objectives are appropriate across the whole range of agricultural situations. Although the needs of the candidate countries are considerably different, and the scale of the problems faced considerably greater, the objectives we pursue should to a large extent suit very well your farmers, and your rural societies as a whole. And I do not expect these objectives to change in the next few years. As you will have heard, I would like to see greater emphasis on rural development as a whole, and more resources devoted to that aspect of our policy.

Our rural development policy aims at creating alternative employment opportunities for the agricultural workforce, through our restructuring and farm diversification, and in particular through support for marginal farming in less favoured areas. We promote sustainable agriculture, through agri-environmental programmes, which are of particular relevance for the candidate countries. Is it logical that rural communities fear such policies?

I think the answer lies in the last main point I want to mention today: the challenge facing you, and us, to communicate better with the sectors of your societies who will stand to gain from the CAP. It is clear that the difficult aspects of adjustment are being felt in your rural communities. It is important that the benefits which will follow that adjustment should also be explained.

There may be a political temptation to attribute many of the difficulties facing your rural sectors today to your big neighbour, the European Union. It is clear, also, that as one goes into what may be among the most difficult chapters of the negotiations, attitudes on both sides may tend to become confrontational. Remember, however, that when the negotiations are finished, you will have to sell the results to your electorate, and if in the meantime you have demonised Brussels, or the Union, this will be more difficult. One of the messages has to be that change, restructuring, sometimes painful adjustment is inevitable, and it can be faced alone, or in the European family: you have opted to join the family, which in my view was the only valid decision, especially in the rural sector so you have an interest in putting all the necessary efforts into preparing to join, as soon as possible.

In fact, there needs to be a realistic debate in your countries on what you want from agriculture and for your rural communities. It is clear that with or without membership, a large number of people will have to leave agriculture for other activities in the coming years, if farm incomes are to rise in line with wage growth in other parts of the economy, and if productivity in agriculture is to increase. The question is not "whether", but "how". Membership of the EU offers considerable resources and experience in restructuring agriculture, diversitying income sources and creating alternative sources of employment. A central question is how this process of change is cushioned and accompanied by appropriate social and welfare measures, both for those within the sector and those leaving it. We must cooperate to ensure that in future, rural development programmes in your countries work effectively with national measures to best accompany the major social and economic changes in view.

Don't forget that we are in this together. We have as much interest as you in ensuring that the pre-accession period is successful. After accession we will be sitting together in the Council, and in management committees, trying to manage a single market in agricultural goods, agreeing rural development programmes together, negotiation international trade agreements together. Then, as now, you will need to ensure that you build consensus back home for what we are doing together.

Meanwhile, I would urge you to look carefully at the way our policies are presented to your electorate in your respective countries. Together we should see how we can improve the understanding of those policies

The road immediately ahead may be more notable for its challenges than its benefits, but the longer-term outlook for all of us, as partners in the agricultural family, is promising. The recod of a number of countries who joined the Community since its creation, including relative poor countries such as Ireland, Greece, Spain and Portugal, is encouraging for you.

I thank you for your attention.

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