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

Estonia's Agriculture and Fishery - Challenges of Enlargement

Meeting with representatives of the agricultural and agribusiness sector

Tallinn, 17 September 2002

Ladies and Gentlemen,

I welcome the opportunity to speak to you here in Tallinn about the perspectives of enlargement for the Estonian agriculture and fisheries sector. More than ten years after the independence of Estonia you are very close to another very important step in your history. Europe can grow together in a peaceful way, and this is probably the most important vision of our days. However, it is in the practical details where it becomes clear whether a vision becomes a reality or not.

We must not forget that the enlargement of the European Union does not only concern the economy. Nor is it just a matter for politicians. It is first and foremost a project for our citizens. Therefore, communication with the people is crucial, particularly in the countryside, where many people have fears. It is now up to all of us to inform the people about the benefits of joining the EU. Meetings such as the one today can help us to exchange ideas and to understand each other better.

In my speech today, I will talk about the changes which are necessary in the agricultural and agro-business sectors, and how the European Union is prepared to help with those changes.

After that, I will give you an overview of what we are planning to change in the Common Fisheries Policy to support a sustainable development for the future.

Ladies and Gentlemen,

We are together part of the important process of uniting Europe. This unification will offer opportunities for investment, economic growth and wealth. A Europe of common values is a good basis for stable peace. But the European Union is even more than that. It is also a community in which we can address challenges and find solutions together. This was true when the EU was founded, and it will equally be true for a Europe of twenty-five or thirty members. One of the basic principles of the EU is solidarity between the Member States. It is our goal to reduce the gap between living standards in Europe by investing heavily in less advantaged areas.

EU membership offers unrestricted access to the biggest consumer market in the world. The EU's single market of nearly 500 million people after accession will boost economic growth and create jobs in both old and new Member States. In terms of agriculture, membership means entering a very large and competitive market, where consumers will be willing to pay reasonable prices for quality food. The first positive results are already visible thanks to our bilateral trade liberalisation. As a consequence of our so-called double profit agreement, Estonia's agricultural exports to the EU have increased dramatically. During the first year of implementation they expanded from just over € 40 million to a value of € 58 million.

However, in order to use the opportunity of the single market even more, you need to continue and reinforce your efforts for your restructuring programme. The restructuring of your agriculture and the upgrading of your processing facilities is not something which is forced upon you by the European Union. Estonia is facing these tasks in any case, no matter whether Estonia joins the European Union or not. Increasing demands of consumers in your country regarding food quality and food safety, membership of the WTO and the further liberalisation of trade require these changes. By meeting the admittedly high standards applied in the European Union, you will not only increase your potential sales on this market, but also elsewhere in the world.

And in order to meet those challenges, further modernisation of your farms, and of the rural infrastructure in general, is also necessary. This too is not easy, but is clearly in your interest.

Your advantage as a future Member of the European Union is that you do not need to carry out all the necessary changes alone. And the EU is not just waiting for the day of accession with its support. 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. There is one programme that is specifically designed for agriculture. This so-called Sapard programme (Special Accession Programme for Agriculture and Rural Development) supports both the farmers and the countryside as a whole in the restructuring process. It is essentially the counterpart and preparation for the rural development programs that exist in the current European Union. Sapard supports investments in agricultural holdings, investments in processing and marketing, the rural infrastructure and the diversification of economic activities in the rural sector. This means that Sapard supports exactly those measures that are necessary to make Estonian agriculture more competitive and rural areas more dynamic. Through this programme, we allocate € 12 million to Estonia per year.

I am aware that the procedures linked to Sapard may seem difficult or bureaucratic to some. However, I would like to remind you that those procedures are essentially the same as those in the current Member States. For the first time, we are handing over EU funds to be administered by non-EU members. Sapard is dealing with taxpayers' 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.

What is most important now, however, is to help the farmers and the agri-business sector to use the potential of Sapard. This is where farmer and agri-business organisations play a crucial role: The information that they spread in the rural community is the basis for success! The funds are there, but many people in the countryside don't know how to use them. I want to encourage you to establish the link between those dealing with the Sapard funds and those who need them. Co-ordination between all actors is key for the success of Sapard.

But pre-accession aid is not enough. We have to create new opportunities for the people living in the countryside, so that they are not forced to move away: we have to improve infrastructure, provide education and training, and attract job-creating investment. This question is basically the same as inside the current EU. But in the candidate countries, it is even more pressing. Therefore, we cannot just take the existing agricultural policy of the EU and transfer it to Central and Eastern Europe. What the candidate countries need above all is support for the rural areas. We need an adequate approach that will help to integrate the new Member States harmoniously into the European Union.

The Commission has therefore proposed a well-balanced package for agriculture in the new Member States following accession. It covers the questions of direct payments, quotas and supply management instruments, but puts a major emphasis on, and delivers major funding to rural development. This package has been carefully crafted to meet the real needs of the sector in the candidate countries. All its elements should be seen together. The package is realistic, balanced and fair.

In following the negotiations, it is essential that you are realistic about what can be achieved. The room of manoeuvre for compromises in the negotiation package is limited. With regard to the proposal to phase in direct payments, you should be aware that certain Member States are reluctant to pay any direct payments at all to the new Member States. With regard to the quotas and other supply management instruments, I do see some limited flexibility, but only on the basis of solid arguments. In the short-term, we have to respond to the real needs of the rural sector, by doing more to assist the necessary restructuring and intensifying our rural development measures in the new Member States. In the long-term, of course, the CAP will be the same for all Member States.

I understand the concerns and fears of Estonian farmers, but it is essential that they are fully informed about what joining the EU really means for them. The direct payments will be phased in. The agricultural sector will have access to a far higher rural development support than EU farmers benefit from, and from certain measures which do not exist in the current EU. Moreover, from day one farmers will benefit from the other market mechanisms, such as intervention, storage systems, trade mechanisms aimed at stabilising prices and providing a secure income to farmers.

In short, membership of the Union will bring greater predictability of policy and prices, direct payments, which will steadily increase, access to a market of nearly 500 million consumers and major new funding for farm investment and rural development. I believe that Estonian farmers should actively look forward to accession!

Ladies and Gentlemen,

I will now take you from the land to the sea, from the major Agricultural Policy to the more modest but no less important Fishery Policy. Seafaring has a long tradition in Estonia and it is not surprising that the fisheries sector plays an important socio-economic role in the Estonian coastal areas.

As you are aware we are in troubled waters today. The intensive fishing of the past decades has led to the reduction of more and more fish stocks worldwide. Economically important stocks are threatened with collapse. At the same time, the fishing effort isn't going down, but up and it yields less and less fish. Economic opportunities for the fishermen are getting worse and many have to give up their trade.

I have often been asked how we could have come to this. My answer is: because the system is wrong. That is why a simple cure of the symptoms will not do this time. We need to cure the cause. The reform must lead to a new policy that ensures sustainable development in an ecological, economic and social sense. Our aim must be a successful and competitive sector, and one which works for the consumer, too. The European Commission therefore presented its proposals for a fundamental reform of fisheries policy a few months ago. What are the main points of our proposal?

In future we will manage our stocks multi-annually and catch quotas must be much more in accordance with the latest scientific advice.

Furthermore we intend to abolish aid for the construction or modernisation of vessels.

And we want to provide social assistance to those vessel owners who want to leave the sector for good, and scrap their vessel. We will also focus on the creation of alternative sources of employment so that fishermen who lose their jobs are not left stranded.

But let's not forget: We can have as many rules as we want, but without uniform control and sanctions throughout the European Union the system will not work. We want to introduce better controls and tougher penalties for overfishing, because only then can we re-establish confidence in the Community fishing industry.

Coming to the enlargement negotiations, I was very pleased by the fact, that we have already provisionally closed the fisheries chapter for Estonia in April 2000. But I would like to remind you that this does not mean that Estonia does not have to improve the necessary fisheries administration to manage the CFP after accession. I hope that in future, together with you, we can steer our fisheries policy in a new direction. It is my firm belief that we can also find a shared solution to the shared problem of declining fish stocks.

Ladies and Gentlemen,

Since my last visit to Estonia, your country has made remarkable progress. Your country is in many respects in the group of the frontrunners, and today it counts among the candidates that are most likely to join the European Union first. This is mainly due to the efforts of you - the Estonian people, who have opened up politically and economically to the European Union. I count on your co-operation and on your willingness to continue your efforts, to make enlargement a success for all of us.

Thank you for your attention.

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