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SPEECH/01/55

Dr. Franz FISCHLER

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

GROWING TOGETHER CZECH AGRICULTURE & FOOD INDUSTRY AND THE EU

International Conference « Czech Agriculture and Food Industry in the European Union »

Brno, 6 February 2001

Dear Mr. President,

Ladies and Gentlemen

There is a famous legend about the Czech Republic. According to this legend, your founding father Czech said, when he first saw the green hills of your home country, "This is the promised land, flowing with milk and honey". And indeed, the conditions for agriculture in the Czech Republic are favourable, given its temperate climate and its fertile soil.

However, founding father Czech was not completely right: milk and honey never flow automatically. It takes a farmer and hard work to breed the cattle. The pre-conditions are there: the land, the soil, the climate but it takes a lot of hard work to make milk flow and to make cereals grow. In other words: The promised land may be promising, but it takes the farmers' work to keep the promise.

Today, some consider the European Union as a new promised land. After the bloodshed of two World Wars, and after nearly five decades of Cold War, we all finally agree that our future lies in co-operation, not confrontation. And yet, the European Union is not exactly a promised land either: it does not function automatically, but requires daily efforts and negotiations to make it work. The Czech people and its government authorities have understood this lesson very early. Since the days of the Velvet Revolution in 1989, you have made major efforts to overcome the consequences of the Communist regime and to bring your country back where it belongs: to the centre of Europe!

What the Czech Republic has achieved in the last ten years is really impressive: it has managed to go through a painful transition from a centrally planned to a market-oriented economy, it has successfully privatised former state-owned enterprises, and it has created a stable economic environment that has attracted more than 7 billion dollars of foreign direct investment.

As for agriculture, there, too, substantial progress has been made. The major part of the agricultural land has been privatised smoothly, so that the independent farmer is again the basis of the Czech agricultural production. Today, the Czech farmer is a partner for his colleagues in the EU, and both can profit from this partnership.

This is not an empty phrase, but a reality. As a preparation for enlargement, we have concluded a bilateral trade agreement last July, the so-called double-zero agreement. In consequence of this agreement, the share of agricultural exports free of duty from the Czech Republic to the EU increased from 41 to 54%. It is clear that this will also enhance the overall trade between the Czech republic and the EU. We intend to continue bilateral trade negotiations this year with the aim of liberalising trade between the Czech Republic and the EU even further. Our plan is to continue opening up agricultural trade step by step, so that we will have a smooth transition on the day of enlargement.

However, bilateral treaties are nothing more than a step to create better trade opportunities. In order to make use of these opportunities, we have to ensure that our production methods respect the same standards. It is unacceptable to have negative competition of standards of production. If we wish to have access to the same markets, we must meet the same standards.

This leads me to another issue: the enlargement negotiations. While the double-zero agreements try to prepare our markets step by step for the accession of the Czech Republic, we also need negotiations to prepare the legal conditions of enlargement. One of the questions of the enlargement talks will in fact relate to the issue of technical standards of food production.

The other principal issues are of course the question of supply management, and the policy regarding direct payments.

Negotiations on agriculture have started last June, and I can say that with the Czech republic, they have been fruitful and co-operative so far. In the past year, many important steps were taken on the Czech side:

  • The Act on the State Agriculture Intervention fund entered into force,

  • a new cattle identification system became compulsory since 1 January of this year,

  • the Act on Ecological Agriculture was adopted,

  • and a quota system was introduced for milk, sugar, and starch.

All these acts are important steps in order to prepare Czech agriculture to participate in the EU agricultural system. The basis is there, now it will be crucial to build up the administrative framework to implement the new acts.

I cannot stress enough the importance of a functioning administrative body and a comprehensive veterinary and phyto-sanitary control. If you think about the current BSE-crisis within the EU, you will understand how important good and comprehensive implementation is: strict laws are fine, but they are worthless without effective implementation and strict control! If mistakes have happened in member states of the EU, you should avoid repeating these mistakes.

Today more than ever, farmers and food industry depend on the confidence of the consumers. We have to do everything to gain this confidence, both in the present member states and in the candidate countries.

In addition to this, we have to implement the same laws on food safety. It would be an unacceptable situation if food producers in any country were to use lower standards of production and still seek to sell on the community market. We must make a real effort to implement the same standards of food safety and animal welfare by the day of accession.

I know that this is not always easy. It requires much time and money to adapt production facilities to new standards. The money required cannot come from the Czech state and the EU alone. I hope that in the future, private banks will be increasingly ready to make money available through special loans for farmers.

However, the EU has always shown its readiness to play its part in the preparation for enlargement. During the period 1990 to 2000, we have allocated altogether 25 billion Czech Crowns through the PHARE programme. This money was invested in the building of new infrastructure and the restructuring of the public administration. Last year, more than 215 million Czech Crowns were spent through PHARE specifically for agricultural measures, and in particular for agricultural assets registration, veterinary inspection and the phyto-sanitary sector.

Whereas the PHARE programme was only designed to support the efforts of the candidate countries throughout the transition period, we have recently introduced a second programme which gives the direction for the future: the SAPARD programme!

This programme follows the same principles and guidelines which apply for the EU member states. One could call SAPARD the first part of the Common Agricultural Policy that is moving to the candidate countries. It is not by accident that the main target of this programme is rural development. Rural development may be the most important part of the EU's agricultural policy in the future: We have already substantially shifted away from trade-distorting subsidies and now concentrate on paying farmers for services that are in the public interest. In addition to this, we want to give support to rural areas, so that people on the countryside have a choice of what kind of job they want to do. If rural areas are prospering, farmers will profit as well. This is the idea behind our SAPARD-programme.

For the Czech Republic, 778 Million Czech Crowns will be allocated per year. I am confident that this money will be spent in a very useful way, since the Czech government has sent an excellent programme proposal to Brussels, which has been approved last October. The presented programme meets exactly the main objectives of SAPARD by following an integrated approach. It integrates the modernisation of agriculture with the general development of the rural areas. At the same time it takes into account the specific nature of the Czech territory, notably the micro-regional areas.

So where do we stand with the implementation of the Czech SAPARD programme? Yesterday, I met Minister Mertlik in Prague and signed with him the multi-annual financing agreement, that is the technical and legal framework of SAPARD. Now, the SAPARD Agency, which is responsible for the full co-ordination and the control of the programme, has to be accredited on a national level. As soon as this has been done, the EU has to approve that accreditation, before the money can finally start to flow.

I understand that some find this procedure too time-consuming, and often we are even confronted with criticism. However, I can assure you that the approval procedure for the candidate countries does not differ from the one which member states have to undergo. After all, we have to guarantee that our funds are being used in a well-targeted and objective way. What I said about the legislation is true for the SAPARD-programme as well: Good programmes are fine, but they are worthless without good implementation.

Ladies and Gentlemen,

Even if some say that the enlargement process seems to be terribly slow, I believe that we are right on track. We tend to forget that much progress has been made already. The Czech Republic has come a long way from a centrally planned economy with a one-party regime to a pluralist, democratic society. It has overcome the economic difficulties of transition and shows steady growth now. And it has managed to adopt a considerable part of the EU-legislation, thus getting more and more ready for accession to the EU.

At the same time, the EU has managed to get ready for enlargement, too. With Agenda 2000, the EU has launched a reform of its agricultural policy and that policy is fit to integrate any of the candidate countries as soon as they are ready.

From an institutional point of view, the Treaty of Nice, which was signed last December, has set the framework so that the EU will be ready to accept at least ten more members.

In addition to this, the Nice summit has also approved the strategy paper that has been published by the European Commission last November. What is very important in this paper is the fact that it gives a tentative timeline: by end 2002 we want to be in a position to welcome those new member states which are ready to join.

This would mean that the people of any such candidate countries could participate already in the next European elections in 2004.

As for agriculture, the strategy paper splits the negotiating chapters in two parts. All issues without major budgetary implications, such as veterinary and phyto-sanitary questions, should be negotiated in the second half of this year. Other questions, such as the Common Market Organisations and rural development will be dealt with next year.

Ladies and Gentlemen,

As you can see, the Czech Republic and the EU have achieved a lot during the last ten years. When I walk through the streets of Brno, when I look at your countryside, I can see that our countries have been growing together.

For what remains to be done, let us make good use of the financial instruments like PHARE and SAPARD. As for the negotiations, apart from the issue of transitional arrangements, we have to solve the questions of direct payments and of supply control. You have to continue your preparation to apply the Community legislation. And you must continue with administrative reform. This is absolutely essential to guarantee that the legislation is observed.

I would like to conclude my speech with a remark to both sides, the EU and the Czech. If you look back where we were sixty years ago, you will realise that we have come a long way. What we have nearly reached is in fact some kind of promised land, characterised by co-operation and peace instead of confrontation and destruction. It always takes an effort to make milk and honey flow, so let us together make this effort for the last chapters of the enlargement negotiations.

Thank you for your attention.


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