Dr. Franz FISCHLER Member of the European Commission, responsible for Agriculture, Rural Development and Fisheries The prospects of enlargement for Poland - Seizing unused opportunities Panel discussion event with representatives of farmers' associations, agri business people and NGOs Warsaw, 12 September 2002
European Commission - SPEECH/02/387 12/09/2002
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Dr. Franz FISCHLER
Member of the European Commission, responsible for Agriculture, Rural Development and Fisheries
The prospects of enlargement for Poland - Seizing unused opportunities
Panel discussion event with representatives of farmers' associations, agri business people and NGOs
Warsaw, 12 September 2002
Ladies and Gentleman,
In 1991, after the successful political change, your former president Lech Walesa said that Poland was the "land of unused opportunities". It is a pleasure to be here today and see that in the meantime the situation has changed : Poland has seized many of its opportunities and has made tremendous progress over the last ten years.
In my speech today, I will first speak about the accession negotiations and where we stand right now.
Secondly, I will address the issue of agriculture and the rural areas. What has been done for the development of the agricultural sector and where do we still have problems?
And finally, I will give you an overview of the latest adaptations of the European Agricultural Policy and what they mean for the candidate countries.
Ladies and Gentlemen,
the enlargement negotiations with Poland have reached their final stage: most of the open questions have been settled and already 26 of the negotiation chapters are provisionally closed. However, four chapters are still open: The first three are regional policy, budget and competition. The fourth and without any doubt most important one is agriculture. In this chapter, unfortunately, there is still a gap between what is possible and what Poland requests.
Therefore, before I tell you what enlargement will make possible for Poland, let me first tell you what is not possible. The first issue is the Polish request to maintain border protection after the accession. It should be clear to everyone that this is absolutely impossible. A single market with trade barriers is not just unrealistic, but in fact a contradiction. The free movement of goods is one of the major foundations of the European Union, and no exception can be made.
The second issue where Polish requests go too far is the question of direct payments. Despite the fact that, originally, no direct payments had been foreseen, the European Commission has made concessions to the Polish request already. In our enlargement paper, we propose the introduction of direct payments through phasing in, starting at 25% in the first year. It should be clear that this is a compromise position already. One should also take into consideration that 25% of direct payments will create an income level for Polish farmers that is compared to the average national income as valuable as 100% for a French farmer with 30 hectares. I see no point in keeping up the request for 100% direct payments from the first day of accession if it is clear that there is no room for manoeuvre. This rhetoric cannot be successful, and it will only lead to frustration among the Polish people when they have to vote about accession. It is high time to get serious with the final negotiations. Making the historic enlargement of the European Union possible is not an issue for political games.
What enlargement will do for agriculture and the countryside
Ladies and gentlemen,
There is no doubt that accession will create many opportunities for Poland. What will it bring for agriculture and the countryside? Above all, the European Union can help the Polish agricultural sector in its process of restructuring. It is not feasible that 20% of the Polish workforce can make their living from farming. In addition to this, there are many people working on farms who are doing this work not because it is their favourite job, but because there is just no other alternative on the countryside. Poland is thus facing a double task: the first one is to help farmers who want to modernise their farms. The second is to support the countryside as a whole and create jobs for those who want to leave agriculture but stay in their region.
Poland is facing these tasks in any case, no matter whether Poland joins the European Union or not. What makes the big difference though is that the European Union can support Poland in its efforts.
It is important to state that the European Union is not just waiting for the day of accession to support the Polish countryside. We support it already now. For the first time in the history of the EU, we have established specific programs to help the candidate countries before their accession to the EU.
In the last ten years, Poland has received € 2 billion through the PHARE programme. The major part of this money went to the modernisation of the administration and the development of the regional infrastructure. On the other hand, Poland has decided to spend only a minor share of the PHARE money for the rural areas. It is clear that this should change in the future. This is the reason why the European Commission has introduced the Sapard programme.
Sapard is a program that helps both the farmers and the countryside as a whole in its restructuring process. It is so to say the counterpart to the rural development programs that exist in the current European Union. It supports exactly those measures that are necessary to make Polish agriculture more competitive and the rural areas more dynamic.
I am very glad that the Polish program could be finally started two months ago. So far, the following measures have been launched: investments in agricultural holdings, support for the processing and marketing, support for rural infrastructure, vocational training and technical measures. All these measures, which represent 87% of the overall Polish programme, are already operational. And Poland will receive more than € 170 million per year to finance the projects.
Unfortunately, only few applications have actually been submitted by farmers so far. This is why I would like to encourage all of you: please give your support to those who are eligible for support but don't know how to apply or even don't know about Sapard at all. The information that you provide to the people on the ground can be absolutely crucial for the survival of the countryside. The funds are there, the programme has been approved, it is now up to the Polish side to make full use of the potential.
I am aware that the procedures linked to Sapard may seem difficult or bureaucratic to some. However, I would like to remind you that the procedures are largely the same as those in the existing member states. Sapard is dealing with tax payers' money and we all have to take care that it is properly used. If money is used incorrectly, it has to be claimed back later, and this is clearly in nobody's interest.
Nevertheless, let me also assure you that my services take complaints about complications in the application procedures serious and they are open for suggestions from the candidate countries. Criticism alone is not enough, what we need are concrete and practicable suggestions for improvement from those dealing with Sapard in the national authorities and the monitoring committees.
Ladies and Gentlemen,
So far, Sapard is the most important instrument to support the Polish countryside. However, it is clear that after the accession, we must do much more. 38% of the Poles live in rural areas, and it is these areas where the soul of your beautiful country lives, whether we talk about the Beskidy or the Masurian plains. Polish cities like Warsaw are booming and have already reached a per capita income level comparable to that in the EU. But the rural areas are lagging behind. Therefore, the development of these areas must be the priority after enlargement.
This is exactly what the European Commission is doing with its enlargement proposal from last January. It would have been pointless just to take the existing common agricultural policy and transfer it to Poland. 40 years of separate development cannot be ignored. There is a real danger that people from the countryside and the children of the farmers will just leave the countryside and move to the big cities.
What can the EU do, together with the Polish authorities, to prevent this abandonment of the countryside? There are several measures that we can make available: We will give money to farmers for the necessary investments in the modernisation of their farms. We will support the amelioration of the infrastructure. Education facilities have to be built and will be supported as well. We will give money for the renovation of villages. Finally, we will support the creation of alternative sources of income in sectors such as tourism, services, crafts and so on. This is a long list of things that should be done. It is clear that the initiative must come from the Polish people themselves. But the European Union is ready to support these essential activities through its rural development policy.
In our enlargement package, we have made clear that after accession, Poland and the other candidate countries will receive special support for their rural areas. Most importantly, Poland will receive more means for the rural development than is the case in the current member states of the EU. But the EU will also take over a higher share of the overall project costs, namely 80%. Finally, we propose a new measure from which Poland will particularly benefit. Semi-subsistence farmers who can present a concept for the future of their farms will receive a payment of up to € 750 per year.
Ladies and Gentlemen,
In the discussion about enlargement, very often single points are picked out to make negative propaganda. But let us not pick out single points and look at the enlargement proposal as a whole package. And this package includes many advantages for Polish farmers. Besides the strengthened rural development payments and the phasing in of direct payments, one should not forget that all the market organisations of the common agricultural policy will apply to Poland from the day of accession. This means that for example the intervention system for cereals will apply to Poland. This system has proven to be extremely stable in the past, and it will bring more stability also to the Polish cereal market.
Let us finally not forget that Poland will also profit from other EU policies, such as the structural policy. Almost all of Poland's regions will be eligible for structural aid that the EU gives to the poorer regions. The experience in the EU has shown that the overall economy of a country can profit from the structural funds; just take a look at the progress that countries such as Ireland or Spain have made over the last few years. Poland is a country rich with human capital. The structural funds will add financial capital in order to use the untapped potential of Poland.
Mid term Review
Ladies and Gentlemen,
The founder of the European Union, Jean Monnet, once said that we cannot stand still when the world around us is moving. This also applies to agricultural policy. The realities of the world market are constantly changing, and so are the expectations of our citizens. Therefore, I have presented a proposal for an adaptation of the current common agricultural policy. Through this proposals, we want to improve the link between the farmers and consumers of Europe. As a matter of fact, the general direction of the proposal is the same as in the enlargement negotiations: what farmers need are more structural aids through rural development. Therefore, farmers in the future should receive less direct payments and more rural development funds. Of course, this change would not apply to Poland until it reaches the same level of direct payments as in the current member states of the EU.
In addition to this, I propose to de-couple direct payments from production. This means that in the future, a farmer is not obliged any more to produce wheat or beef, no matter whether there is a market demand or not. Instead, he will receive the direct payments as a reward for the services he renders to society. But he is free to choose which product he wants to produce according to the market situation. In one word: our proposal would give back to the farmers their entrepreneurial freedom.
One thing must be clear, however: there will be no linkage between our reform proposals and the enlargement proposals. This would be the best way to slow down both. We want to complete enlargement negotiations by the end of this year. But we will not have agreement on further changes in the CAP before the end of the year. This means that we will continue to prepare enlargement on the basis of the existing policy. Necessary changes can still be made once enlargement has taken place.
Ladies and Gentlemen,
There can be no doubt: enlargement will help to seize even more of the unused opportunities that Lech Walesa has spoken about. Even more: it will help to create additional opportunities. For me there can be no doubt that Poland will be better in than outside of the European family. In addition to the economic arguments, we should keep in mind that the European Union is a unique and historic project that has fosters peace and stability to Western Europe. It will foster stability in Poland, too.
Thank you for your attention.