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Member of the European Commission responsible for Agriculture and Rural
Peri Urban Platform Europe conference
[Ladies and gentlemen],
First of all, let me thank you very warmly for inviting me to join you today.
One of the realities that a politician has to learn very quickly is that life is rarely "black and white" – rarely one thing or the other. We naturally like to see things in simple terms, but in fact they don't always divide up neatly along clear lines.
As Commissioner for Agriculture and Rural Development, I could apply the same principle not only when talking about "black and white" but also about "grey and green"!
What I mean is: for the purpose of policy, where do "urban" areas end and "rural" areas begin? At a signpost in the road? 10 kilometres after the last internet café? Definitions are often rather arbitrary.
On the edge of so many European towns and cities, or even inside them, there are valuable areas of land where wheat grows or where cows graze happily in full view of office blocks: peri-urban areas.
These must not be allowed to fall off the "policy map", any more than a remote farm in Andalusia or the financial district of London.
If peri-urban areas are in a sense both "green" and "grey", perhaps a good way of avoiding a false distinction is to call them "purple"....
At present, all the areas in the European Union where farming of any kind is carried out face a number of challenges.
First of all, there's the challenge of producing what markets need.
I'm sure it hasn't escaped your notice that there has been considerable public anxiety about rises in agricultural prices.
There's a great deal to say about this topic, and I don't want to go too far into it now.
One thing I would say is that the causes are complex and include poor harvests, extra demand from emerging economies and dramatic increases in the oil price. Biofuels have been a popular scapegoat but they are not the main driver.
The second thing I would say is that some prices are now coming down from their peaks (for example, for dairy products and wheat).
But in any case, the public has woken up again to the fact that the world's food supply does not come out of a vending machine: food production needs inputs like seed, land and hard work!
And of course, the challenge of production is not simply a challenge of quantity. It's also a challenge of quality: producing exactly what the market is asking for in order to maximise returns.
On top of this, there's the ongoing challenge of providing the public goods and services that are expected from rural and peri-urban areas.
Most Europeans want Europe's green areas to be kept in good shape. They want them to be clean and attractive. And they want them to provide places of rest and recreation. Once again, this is not something that happens all by itself.
Our rural and peri-urban areas also face the task of doing well in the modern economy – just like urban areas. This means diversifying and creating new jobs.
This is already quite a long list of challenges. But as we know, some relatively new challenges are unfolding. These include:
The Common Agricultural Policy (CAP) already provides a number of tools for facing up to this long list of challenges. But we need to do more - and we intend to do more through the CAP Health Check, for which the Commission made legal proposals this week.
Through the Health Check, I propose to give farmers greater freedom to respond to growing demand for their products.
This means progressively increasing milk quotas from 2010 to 2013, before we abolish the quota system in 2015.
It also means ending compulsory arable set-aside. This was designed to control supply and is no longer needed – though I am proposing ways of keeping the environmental benefits that it has brought to some areas.
The other market instruments of the CAP must operate as a safety net for genuine crises: they must not set market prices.
This is the thinking behind proposed changes to our systems of public intervention and private storage, for example.
Secondly, I want to make the Single Payment Scheme more effective, efficient and simple in a number of ways.
As I said earlier, responding to demand is not simply about producing, but about producing the right things. Farmers can do this much more easily if their direct payments are decoupled from production.
Therefore, I propose that we extend the principle of full decoupling – except in a few cases where the downside of doing so would outweigh the upside.
The PURPLE regions' position paper on the CAP suggests that support payments should not be based only on historical entitlements.
It's a political reality that history plays a certain role in setting entitlements for decoupled payments: national governments will simply not sign up to a system which heavily redistributes funding between Member States.
Nevertheless, under the Health Check proposals, Member States would have the opportunity to flatten out differences in payment rate per entitlement – in other words, to move away from a "historical" version of the Single Payment Scheme and closer to a "regional" model.
Further improvements to cross-compliance would be good news for everyone. Here, I propose to remove obligations which are unenforceable or not directly linked to farming. I have also proposed new obligations connected to water management and certain landscape features.
Finally under the heading of the Single Payment Scheme, I want to give Member States greater flexibility with measures currently known as "Article 69" measures. The new version of Article 69 would, for example, allow governments to take money from direct payments and use it to support insurance schemes for natural disasters, as well as mutual funds for crises caused by animal and plant disease.
How will the Health Check help us to address the "new challenges"?
We can address these mainly through rural development policy. Unfortunately, rural development funding for 2007 to 2013 is already allocated. So if we want to take further action, we need more money.
I propose to obtain this through a system of "progressive modulation". This would take further money out of direct payments to farmers and place it in the rural development budget – only for measures linked to climate change, water management, renewable energy and biodiversity. Farmers with higher direct payments would make a larger contribution.
As I speak about what further action we can take through rural development policy, of course I'm aware of your concerns about how the whole rural development budget is divided up.
As you know, for the sake of coherent policy, the Commission gives guidelines on spending rural development money, and approves Member States' and regions' rural development plans. But it doesn't write the plans itself. This would be totally impractical given the huge variety of the European Union's rural and peri-urban areas.
Therefore, if you want to make sure that you get the funding which you feel you need, get your message across to your governments loudly and clearly!
But let me emphasise that, in its design, rural development policy is accessible to peri-urban areas.
You can use all measures available under policy axes 1 and 2: in other words, those related to the competitiveness of farming and forestry, and to the environment. This is true irrespective of an area's population density. Let's not forget that the city of Hamburg has a rural development plan!
With regard to measures under axis 3 – economic diversification and quality of life – the situation is more complicated. These measures are open only to "rural" areas – as defined by individual Member States.
And yes, that means that certain peri-urban regions don't have access to these measures.
The Commission looked into the possibility of harmonising the definition of "rural areas". The Council debated the options in 2005. And Member States said they wanted to keep the power to make their own definitions.
A single definition would probably also have excluded certain areas!
In any case, let's bear in mind that, for the period 2007 to 2013, 34 per cent of the rural development budget has been earmarked for axis 1 and 44 per cent for axis 2 – to which peri-urban areas have full access.
As you note in your position paper, one of the problems giving rise to such concerns over funding is that the overall rural development budget does not really match the scope of what we're trying to achieve with it.
We can rectify this to some extent with the progressive modulation which I have proposed. Nevertheless, bringing enough funding into the rural development budget will be a key challenge beyond 2013.
I'm constantly telling national governments – especially finance ministers – that cutting back funding will mean cutting back results.
If we're really serious about having rural and peri-urban areas with competitive farmers, natural beauty and vibrant economies – and if we're serious about making these areas our allies as we face up to new challenges – we must be serious about giving our policies the funding they need.
With the right combination of well-funded policies for both agriculture and wider rural development, we can look forward to a bright future for all of the areas of the European Union where things grow or graze – whether these things are 50 kilometres from the nearest post office or just 200 metres from a cinema complex.
I know I can rely on your help to make this a reality.