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SPEECH/04/138

Dr. Franz FISCHLER

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

Agriculture and enlargement - 44 days to go

Press conference

Brussels, 18 March 2004

Ladies and Gentlemen,

The biggest enlargement in the history of the EU is just 44 days away.

Agriculture was without doubt one of the most important and tricky parts of the accession negotiations. It is also probably the most demanding part of the EU body of law when it comes to implementation.

The deal on agriculture agreed in Copenhagen is a good deal for farmers in the acceding countries, and for the rural sector in those countries as a whole. Accession will bring many benefits, which are unfortunately deliberately overlooked by detractors of EU accession,

The fact that direct payments will be phased in over 10 years, starting with 25% in 2004, is not the whole story. Farmers in the new member states will immediately benefit from market measures and a beefed up rural development policy. This means a safety net in case of market crises and more money in their pockets if they go for more environment or food quality.

What the Polish, Slovak or Latvian farmers will see following enlargement is: rising levels of income support, stable prices, and massive support for their restructuring process. On rural development in particular, the measures are tailor-made for the needs of the new member states.

Rural communities in the ten new member states can expect proportionately higher financial allocations than in the EU15, all in all € 5.1 billion for rural development from 2004 to 2006. All these measures contribute to strengthening the rural economies, cushioning adverse social effects of the restructuring process and making rural areas a more attractive place to live and work.

I have a clear message for the farm communities in the ten new member states. The EU is of course not heaven, but it is far from being hell. Farmers will clearly be better off in the EU. According to an impact study, application of EU market measures only - with zero direct payments - is likely to generate an increase in farm income of around 30% for the eight Central and Eastern European candidate countries.

And they should not forget that restructuring and modernisation has to happen with or without the EU - That is to say: with or without the support of the European agricultural policy!

When speaking to farmers, I am sometimes shocked by the poor level of information on the ground. I would really like to urge our friends and partners in the new member states, in the regions and from the farm organisations to give their farmers the full picture and help to debunk the old cliché of how unfair their accession deal is.

It is high time to let the farm community know that the reality is different and it is high time to thoroughly inform farmers on how they can benefit from EU support. And this is a task the Commission alone can impossibly shoulder!

Ladies and Gentlemen,

Where are we in the enlargement preparations?

In general, I have to say that acceding countries have risen to the challenge, they have worked extremely hard. All acceding countries have come a very long way. "Chapeau" to them!

But doubtless, the new member states and in particular those from Central and Eastern Europe still have their share of work to do. And this is hardly surprising. 40 years of communism cannot be so easily undone.

There are areas, which are still causing us serious headache, such as the establishment of Paying Agencies and the Integrated Administration and Control System (IACS) which are necessary to run the CAP. Significant challenges remain, regarding the Information Technology equipment, or the number and the training of staff, to cite just two.

All acceding countries still have work to do. In many cases the timetable for finishing the work is very tight.

Let there be no illusions: Acceding countries do need an accredited paying agency by accession. This means that the administrative capacity must be in place by 1 May, otherwise farm subsidies linked to market measures such as public intervention or export refunds cannot be paid out.

There is not a second to lose.

I do not need to remind people here of what is at stake: any further delay could result in farmers missing out on EU support, or national budgets being faced with significant claw-backs of farm subsidies. This would definitely not be in the interest of the Commission and the new member states.

EU taxpayers, in both old and new member states, would not accept EU funds being spent incorrectly. This is why there can't and won't be room for compromise.

A big final effort is required to get everything done on time. I know that the acceding countries are confident that they can do it, and I wish them 'bon courage' for their last few weeks' work.

But at the end of the day, it is the responsibility of the new member states to ensure that the structures are up and running and the subsidies their farmers are entitled to can be paid.

As far as the agriculture pre-accession instrument SAPARD is concerned, we are making good progress. We have finally reached "cruising speed". By end 2003 almost 13,000 projects have been contracted to final beneficiary, committing 56%, or € 1.2 billion, of the EU contribution allocated to the countries by for 2000-2003.

Ladies and Gentlemen,

I would like to turn now to two particular issues that have been in the press a lot recently: the measures to avoid speculation on stocks, and the application of CAP reform to the new member states.

On the stocks question in particular, there have been some opinions in the press that bear no relation to reality, for example that this is a covert attempt by the EU to bankrupt producers in the new member states or stop them 'exporting' to the EU15!

This is of course nonsense.

The main point to note is that average price levels and import tariffs, for a wide range of products, are much lower in the 10 new countries than in the EU15. This naturally creates a serious risk of speculative stockpiling by operators, and we would be neglecting our duty to EU taxpayers if we did not put in place adequate measures to prevent this.

There are complaints that the list of products is too long, the charges are too high, and the administrative burden disproportionate. We are sensitive to these points, and have tried hard to accommodate new member states' concerns. But there are limits. The list of products is based on our best assessment of the risks of speculation, and the charge must have a deterrent effect. The bottom line is: We will not allow that taxpayers' money ends up in the pockets of speculators.

The other subject I would like to mention is the question of CAP reform and the necessary adaptations of the Copenhagen deal. To make it clear: We are talking about: adaptation, not erosion!

In the adaptation package, there are important points that are real, major advantages. These include full use of the negotiated ceilings under the new single payment scheme, non-application of financial discipline and modulation until direct payments reach the EU level, considerable administrative simplification and temporary exemption from cross-compliance under the Single Area Payment System.

To be clear: This discussion should not be abused to fight old battles one cannot win. In the adaptation process the level of production quotas such as the milk quota is not an issue. These levels have been unanimously agreed in Copenhagen, and, dare I say, the new member states got a sweet deal, with the EU going to great lengths to give the newcomers the best possible historical reference.

I am therefore confident that the General Affairs Council will approve this adaptation package next week.

I thank you for your attention, and my colleagues and I stand ready to answer the questions you might have.


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