SPEECH/06/556
Mariann Fischer
Boel
Member of the European Commission responsible for Agriculture and Rural
Development
Simplification of the CAP: meeting the
challenge
Conference “A Simple CAP for Europe” Brussels, 3 October
2006
Ladies and gentlemen,
Let me give you a very warm welcome to this conference on the Simplification
of the Common Agricultural Policy, organised by the Commission's
Directorate-General for Agriculture and Rural Development.
We have a very full programme ahead over the next two days, and I hope that
you're looking forward to it as much as I am.
I'm especially glad to welcome my colleagues Juha Korkeaoja, the Finnish
agriculture minister, and Günter Verheugen, the Commissioner for Enterprise
and Industry. As Günter will confirm, in trying to simplify policy DG Agri
is not making a lone charge. Simplification is an issue for the whole Commission
and for every policy area, especially in view of our Lisbon agenda for growth
and jobs.
As Leonardo da Vinci said, "Simplification is the ultimate
sophistication."
Of course, this doesn't mean that life is always simple. Some people of my
generation will always struggle with the technology of a DVD-player!
If we look at farming, this has become much more mechanised, more
capital-intensive, more complex. These developments have been positive: it would
be much more challenging to feed a city like Brussels if we abandoned combine
harvesters and modern distribution methods in favour of ox-drawn ploughs and
horse-drawn carts.
On the other hand, we're all familiar with the concept of unnecessary
complexity. Must there really be so many buttons on the remote control unit for
the DVD-player? And why do I have to fill in ten pages of forms by hand to claim
a small tax exemption? Isn't there a simpler way of doing things, such as would
have pleased the great Leonardo?
We often ask similar questions about the Common Agricultural Policy (or
"CAP") – and with good reason. Yes, the CAP is complex. It addresses
complex problems, in a complex geographical and political setting.
Simplifying it is a stern challenge. But there is much to gain from the
attempt. We can help farmers to be more competitive. We can lighten the load on
administrators. And we can get more "bang for the buck" – squeezing the
maximum value out of every euro spent. So here we are today, taking a look at
where we are now, and mapping out the way ahead.
I ought to make clear what our simplification work is not about. It's not
about "scrapping the CAP". We need a common policy for agriculture, for many
reasons. If anyone thinks that reverting to national policies would really make
life simpler in the European Union's single market, I would gladly debate the
issue with them – but not today. For the purposes of this conference,
simplification is not abolition.
So what is simplification about? In the Commission's current work, we
distinguish between two types: technical simplification and political
simplification.
Technical simplification is about the detailed implementation of policy, and
sometimes about form. Revising a legal document to make it clearer, or
streamlining administrative procedures: these are examples of technical
simplification.
Political simplification is about changing underlying policies in ways which
make them simpler. For example, some say we should abolish production quota
systems. This would give farmers in some sectors the freedom to produce whatever
quantities the market would pay for, without worrying about artificial limits:
this is political simplification in action.
It's important to realise that we are pursuing both sorts of simplification.
Both are important. Political simplification usually creates more headlines, but
technical improvements are valuable as well: the devil is often in the detail.
Technical work often brings quick gains for relatively little pain, and
sometimes clears a path for political changes.
So let me first outline some of our technical projects.
The Commission will soon finish its work on a single Common Market
Organisation. For those of you who don't know, I should explain that a Common
Market Organisation (or "CMO") is a set of rules which governs the European
Union's market for a given agricultural product. For example, we talk about the
"cereals CMO" or the "beef CMO".
These sets of rules have become very confusing over time. Imagine the sum of
the market policies of the CAP as a broad, deep forest. Now imagine that there
is no single map of this forest – just a large collection of selective
maps, which cover different areas and have been updated many times by other
incomplete maps.
You wouldn't be surprised if a lot of people got lost in this forest.
The CMOs of the CAP – the legal documents setting out market policies
– are like these maps. They have multiplied over time to the point where
only experts can use them with confidence.
The solution: make a new map of our market policies – a single,
up-to-date map – a single CMO.
Creating a single CMO would not involve changing market policy instruments.
No deletions, no additions.
Instead, a single CMO – which would replace 21 individual CMOs - would
simply list and describe those policies more clearly in a consolidated legal
document. For every market policy mechanism which we operate, it would set out
the general principles which apply to all CMOs, then list the individual
differences, sector by sector.
I firmly believe that the single CMO would in itself bring valuable order,
clarity and transparency. Access to legislation would be improved enormously.
But the single CMO would also help us to check the consistency of our market
policy more carefully. When we have a better map of the forest, we can see more
clearly which parts of the forest need to be thinned out or replanted.
Another element of our current work on technical simplification is our Action
Plan. This contains 20 proposals for practical changes which can make life
easier for farmers, businesses and national administrations without changing
fundamental policy.
These are changes of detail. But we all know how some details in daily life
can make a big difference.
One example comes from the olive oil sector. Currently, farmers may not use
land planted to olive trees after 1998 to activate their entitlements to
decoupled payments. Today, this restriction makes little sense, and the related
controls are burdensome, so we propose to abolish it.
My second example concerns dried fodder. Under the CAP, processors can
receive a support payment – but only after the farmer has proved that he
or she met a number of conditions when growing the raw material. But as it is
the processor that receives the aid, and as the farmer now receives a decoupled
payment on the land, many of these conditions are an unnecessary burden. They
should go.
Director-General Jean-Luc Demarty will be saying more about the Action Plan a
little later. I would simply add that the proposals currently in it are not the
end of the story: I very much hope to receive more suggestions from your side.
We want all of you to become involved so that we can add projects to the Plan as
the months go on.
Now I return to a point which I made earlier: that the Commission is
committed to simplifying not only technical issues but also underlying
policies.
There will be three main avenues for further policy change in the coming
years.
The first is the sectoral reforms which are, like sugar, already done, or,
like wine, bananas and fruit and vegetables, currently under discussion. There
is rich potential for simplification here. An example would be the end of vine
planting restrictions - once we have brought the wine market back to durable
stability.
The second avenue for policy change is what I call the "health check" of the
CAP, to be carried out in 2008. This certainly won't mark a fundamental change
of direction – but it will mean policy adjustments, to keep the CAP
working as it should.
The third avenue is the general review of the EU budget. This is planned for
sometime around 2009, and it will include reflections on the CAP's longer-term
future beyond 2013. For me it is important that these discussions on the CAP are
in the first place "policy-driven". Of course when formulating the new policy we
have to bear in mind that we won't have the same amount of money available for
its financing. In other words: we need to create or reshape our policy tools in
a way that they are at the same time efficient in maintaining a competitive
European agricultural production, simple in order to keep the administrative
burden for farmers and national authorities to an absolute minimum and less
costly in order to respond to budgetary constraints.
Many different ingredients of the CAP will come under the microscope within
both the health check and the budget review. For example, in the health check we
may need to adjust a number of market instruments; and in the budget review,
their very existence in the long term could be open to question.
One of the central tools in the CAP will probably provide a theme that runs
through all of these discussions: the Single Payment Scheme (and its simplified
variant in some New Member States).
The Single Payment Scheme, established by the reform of 2003 and developed in
later reforms, gives us a very solid foundation for simplification of the CAP.
When fully implemented in the form currently agreed, it will draw in 90% of
direct payments to farmers, which were previously very diverse and complex; and
it doesn't vary according to agricultural production (the aid is "decoupled"
from output).
However, it is more complicated than it might be, and I firmly believe that
we should tidy it up: make it more streamlined, simpler, better.
Within the health check, we should take a hard look at the many exceptions to
the principle of full decoupling which are currently practised within the Single
Payment Scheme. Unless we can show that they do more than just add extra layers
of complexity, we should end them.
Our ongoing work on assessing the administrative burdens on farmers from the
CAP, and from the Single Payment Scheme in particular, should throw valuable
light on this issue.
Another point of complexity which we could examine in the health check is
that of the different kinds of entitlements to decoupled payments which are
generated by the current system. There are "standard" entitlements, and those
with special conditions attached – related to set-aside, for example.
I see a strong case for sweeping aside the variations and creating a single
type of entitlement.
It could for instance mean the end of set-aside, which is a relic from the
days when cereals subsidies were linked to production or (later) to planted
area. The end of set-aside would lift a heavy burden from the shoulders of
farmers and administrators alike.
Looking further ahead, what questions should we ask ourselves about the
Single Payment Scheme in the budget review? One of them could be this: after
2013,what will be the role of the direct payments and could we move towards a
single model of decoupling?
This is only a question at this stage, not a clear conviction. But one thing
is obvious to me: to survive the waves of external change which are beating
against it, the CAP must have the strength of simplicity. So simplification will
stay high on the agenda as we do our long-term thinking.
Now comes a word of caution.
Simplification of the CAP is a worthy goal, which offers very substantial
benefits. But it comes with a price tag attached.
The price tag is this: in a simple CAP, exceptions from the rule must be just
that – exceptions. They cannot be the norm.
Everyone who knows the CAP also knows that a simple idea for improving it can
become more complicated as Member States try to mould it to their individual
requirements. This is exactly the fate that befell the Single Payment Scheme in
2003, as I have already outlined.
Of course, this is democracy. I understand this; I was there at the table in
2003 as a minister. But here's a hard truth: we can't have our cake and eat it.
We can't both keep things simple and also hand out exceptions to anyone who
asks.
This does not mean that we are condemned to having a "one-size-fits-all" CAP.
In the area of rural development, for example, I think Member States and regions
will almost certainly continue to have very generous room for manoeuvre.
What it does mean is that we must all be responsible in seeking a balance
between flexibility and simplicity. This is a task not only for the Commission
but also for Member States, the European Parliament, interest groups and
citizens. It's a challenge for all.
A final point I would like to raise in this context is that simplification
should not undermine other fundamental goals of our common policy. A good
example here is Cross-Compliance. Of course we want to take away all unnecessary
burdens here as well, but we must preserve the main objective underlying the
Cross-Compliance system: the delivery of public goods and services. This is in
the interest of all - and particularly of the farming sector, because
Cross-Compliance will help us to win broader support for our policy in
future.
Ladies and gentlemen, to finish, let me summarise again the task before us:
to find the sophistication in simplicity that Leonardo da Vinci spoke about. I
don't promise that the CAP will ever have the plain elegance of his Renaissance
hang glider. But I am absolutely sure that we can make it into a better tool for
the job that it does – sharper, cleaner, stronger, simpler to use.
I'm greatly looking forward to hearing your ideas on how to achieve that over
the next two days and in the months ahead.
Thank you for listening, and enjoy the conference!
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