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Mariann Fischer Boel

Member of the European Commission responsible for Agriculture and Rural Development

"European Model of Agriculture"

National Parliaments Conference - European Model of Agriculture
Helsinki, 12 October 2006

Members of agricultural committees, Ladies and Gentlemen,

I am happy to be back in Finland for this my fourth visit since July. Your beautiful country seems to have a particular attraction to Commissioners of agriculture and rural development.

I am particularly grateful for the invitation to this conference. It is an excellent initiative for which the Agriculture and Forestry Committee of the Eduskunta (Finnish Parliament) deserves much praise.

In the years ahead our plates will be full. On our policy agenda will be strings of health checks of the CAP as well as the general budget review. It is beyond doubt that these many "rendez-vous" will shape our CAP for many years to come.

We therefore need to prepare them thoroughly. The decision of the Finnish presidency to launch already now a debate on the future of our European Model of Agriculture is therefore very timely.

I can assure you that no time is being wasted in Brussels. My services are busy with studies, impact assessments, drafting option papers, exploring scenarios. These are busy days in the kitchen – lots of pots are boiling at the same time.

And rightly so. Much is at stake. Difficult decisions will have to be taken in your committees, in national governments and in the European Parliament. Rather than keeping the door to the kitchen ceiled I have therefore decided at an early stage to give an impression of what is boiling under our lids.

I recently had the opportunity to share some of my ideas and reflections with the European ministers of agriculture. I intend to do the same with the European Parliament later this year. And I very much welcome this opportunity to continue the debate today with members of national parliaments' agricultural committees.

You will have an important role in each of your member states in determining the policy pursued by your respective governments. But our CAP is – and must remain a common policy. And it needs to be understood in a European context. I therefore believe that this conference is an important opportunity to link up the debates in the member states at an early stage of the long process that we have ahead of us. And for my part I am delighted to be able to contribute.

The CAP has come a long way – from its early beginnings with a strong focus on the family farm, improved productivity and efficiency, to the policy we know today which has a much broader scope – and first of all which serves a much wider and diverse clientele.

It is fair to say that the European Model of Agriculture has been reshaped several times since its creation – and fortunately so! Our society has changed dramatically in the last fifty years, and so has our trading patterns. It goes without saying that we have had to factor in these changes in the way we perceive agriculture in our society.

The most striking "redefinition" of the agricultural model was probably the one that lead to the Agenda 2000 Reform. It was a reform that saw the introduction of principles such as competitiveness, sustainability, diversity, responsiveness to society and simplification. These are principles that have guided us through the subsequent 2003, 2004 and sugar reforms and these principles remain valid and will continue to shape the CAP also in future.

The context in which the CAP operates has also changed. These last 10 years alone the changes have been breathtaking.

Since the Agenda 2000 we have grown from 15 to 25 member states. In a few months we will welcome another two members. Agricultural enlargement has been a great success! And we have proved many sceptics wrong: The integration of the New Member States into the institutional mechanisms of the CAP and EU markets has largely gone smoothly.

But with enlargement come new challenges and new aspirations. In particular, the importance of promoting growth and jobs in rural areas takes on new significance when we see the need for modernisation and restructuring in many parts of the enlarged Europe.

The international trading environment has also evolved significantly. We currently face the uncertainty of a Doha round that has been brought – lets hope only momentarily – to a halt.

But the overall tendency cannot be mistaken. International competition will only go one way. It will grow – fuelled by consumers that want tastes from the whole world – and modern logistics that make it possible. This means threats – but also opportunities for a European agriculture than can produce quality products and that can innovate.

Our rural areas are more diverse than ever and have grown considerably in size with enlargement, but in some respects they are closer than ever. New communications technologies and the internet is changing the way people live and work in rural areas, and provide new ways for our farmers to farm more efficiently and sustainably.

And finally the way we farm has changed. From being considered as the main threat to our environment farmers are today increasingly seen as preserving the environment and delivering environmental services. The development of bioenergy and biofuel in the future – and its positive contribution to climate change - will only further reinforce the image of an agriculture in balance with its environment.

It is against this background that we need to develop our agricultural model in Europe. And let's not forget that as any model – its strength will be in its ability to adapt. The European agricultural model is not static. And must never become static.

"Health check"

But what then is the political calendar in which we will shape the future of the European Model of Agriculture in the years to come?

At the time of the adoption of the 2003, 2004 and sugar reforms, a series of "health check" clauses were introduced into the final agreements.

Over the period 2007 to 2009, the Commission must report on cross-compliance, the consequences of partial decoupling and the choice of model for implementing the Single Payment Scheme, as well as reporting on certain agricultural markets, most notably the dairy sector.

This "health check" was never and is not meant to be about further fundamental reform. The main objective will essentially be to ensure that the CAP is working as it should. It will be an opportunity to fine tune our tool box.

But at the same time, the “health check” will also be an ideal opportunity to conduct a political reality check and ensure that our agriculture remains in line with society’s needs and expectations. Capping will be an issue to consider in this context.

Another issue that will merit further consideration already in the health check is increasing the compulsory modulation – And let me be absolutely clear this is something that I am eager to do.

The CAP should be governed by simple, clear, transparent, and cost efficient rules – easy to manage for those that abide by them and for those that control them. Simplification will therefore be on the top of my agenda in the years to come.

A couple of weeks ago I therefore hosted a conference in Brussels where I presented an action plan with 20 concrete actions to simplify the CAP. And already by the end of the year I will be tabling a proposal for a “single CMO”. A single map to replace the existing 21 maps that set out our market policies today. All these measures – important as they are do not alter the underlying policies. They are technical simplifications.

But It is obvious that as we are changing our policies we can also simplify them. This is something we saw when reforming the sugar sector. And this is something that I will be very attentive to in the context of our "Health check" adjustments.

Should we for instance continue to accept the many exceptions to the principle of full decoupling, and what about set-aside ? Is there not there a potential of delivering farmers and administrators of a heavy burden ?

Budget review

Let me turn now to the budget review. And let me be very clear. Some will see this as an opportunity to radically reshape the European policy mix - with the CAP as the main sponsors through substantial cuts in its own budget.

I want to make it absolutely clear that I feel bound by the budget agreement reached by Heads of State in 2002 that secured the cab Budget until 2013 (Brussels ceiling). We owe it to our farmers who are still busy adapting to the fundamental 2003/4 reforms. We should not accept any budget cuts in 2009.

But at the same time I would like to caution those that believe that we can keep on at the level we know today after 2013. We will also need a strong CAP in the future. But it will have to be a slimmer CAP.

That is why I want to use the budget review to engage in a reflection about our longer-term vision for the period post-2013. This would also allow to send signals to our farm sector about the long term changes to our policies. This would provide the sector with the predictability and policy stability without which there will be no investments. And as you know, without investments there will be no change.

But we need to have the right debate – if we want to achieve the right result. And I want to avoid a debate that is only looking at the size of the budget. Rather than simply setting a financial target – as some will be tempted to do – I want to have a debate about substance. An in depth debate about the policy instruments that will be needed in the future.

Only thereafter should we address the issue of how much for the CAP.

To do this we need clear ideas about the model of agriculture that we want to promote. I see five considerations that we need to build upon:

First much has already been achieved – not least on the basis of the 2003 Reform which I consider as the appropriate policy framework to extend to fruit and vegetables and wine. But now is not the time to rest on our laurels. The modernisation of our CAP must be pursued.

Although the Doha-round has so far not been concluded I think it is a political reality that we will in the longer term have to rely less and less on export refunds. What consequences will we have to draw for our classical market tools like public intervention and production quotas? These are issues that we need to consider in view of the period post-2013, but we need to examine and discuss them in the context of the review.

Second, we need to take a closer look at our approach to decoupling. Maintaining agricultural activity spread across the European territory has for years been a vocation for us – it must remain so. There are many strong environmental and social reasons for sticking to this objective.

Our first analysis however suggests that production related support is not the best way of achieving these goals. Instead the focus must be on the agricultural activity rather than on the agricultural production. We therefore need to take a close look at the conditions for moving to full decoupling.

Third, we need to maintain the diversity of European agriculture. This is one of its strengths. The structural diversity of our farms has become greater with enlargement. The reforms we have introduced have brought in new forces for structural change, in my view potentially both positive and negative.

Fourth, we need our policies to be in line with the EU's overall growth and jobs and sustainability objectives. In this respect one important aspect will be our ability to further strengthen the link between primary production, the processing industry and other economic activities around agriculture. Growth and jobs will not be created primarily on farms but in the industries and companies that depend on our primary production.

Finally in order to safeguard the European Model of Agriculture we need to strengthen further our rural development policy. As I like to say "this is where you find the music". It's a targeted policy. It is a policy where only the imagination sets the limit – and imagination we have a lot of in the rural areas.

The European Model of Agriculture embodies a core set of values that reflects the diversity of European Agriculture. Its strength, like the CAP, is that it has been able to adapt to new challenges over time. Like the CAP, it will face challenges over the coming years. But I am confident that it will prove as relevant in the next ten years, as it has proved in the last ten.

Thank you

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