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Member of the European Commission responsible for Agriculture and Rural
Informal Agriculture Council
[Michel, dear colleagues.....],
First of all, I want to thank Michel not only for putting on such an excellent programme of activities, but also for his choice of topic for our formal agenda.
Now that we're looking not only at the CAP until 2013 (through the Health Check) but also the CAP after 2013, the question arises about the relationship between them. And this has made me think of a comment by one of France's greatest thinkers, René Descartes.
In his famous Discourse on Method, Descartes uses the image of travellers in a forest. He points out that, if you have some idea of the right direction to take through the forest, you should more or less keep to it. If you continually change direction too sharply, you risk going round in circles and getting nowhere.
I would make a similar point about the Health Check and any planning for the CAP for after 2013.
Yes, we may decide to change direction to some extent, but there is no need for completely rewriting the CAP.
In general terms, in the Health Check we're doing important work and looking at important topics. Among these topics are:
These issues will not suddenly lose their importance on December 31, 2013! And if to this list we add two more issues – broader environmental concerns, and the general viability of rural areas – then we're at least getting close to the areas of discussion raised by the French presidency in its paper for this meeting.
Nevertheless, there are a lot of open questions about the CAP after 2013, and within the time constraints for my presentation I can only identify a few of them now.
The first question is: How much money will we have?
The fact is that there are enormous pressures on the European Union budget, and there's fierce competition between different spending priorities.
All of us in this room know that the importance of agriculture and rural development goes far beyond what can be expressed in figures for shares of gross domestic product or employment. We must get this message across clearly to politicians and the general public if we want an adequate budget for the CAP after 2013!
The second question that I would like to ask is: To what extent do we want to let market forces act within our farm sector?
This issue is sometimes portrayed as a choice between black and white – between "regulation" and "liberalism". But this portrayal is false and it sabotages good debate. Fixing a CAP for the future is not about choosing between a command economy on the one hand and "law of the jungle" liberalism on the other. We have many policy tools at our disposal, that we can use to varying degrees. Finding the right combination is a task of hard pragmatic thinking, not ideological rhetoric.
Therefore, we will need to have a number of tools in our policy toolbox. The question is: Which ones?
What I don't think we should do is move large sums into a general insurance scheme against income loss. If we did try to provide basic coverage against income crises out of the CAP budget, we would backtrack from our approach of more market-orientation and the costs would almost certainly be enormous.
Obviously, this does not mean that I have no concern for supporting farmers' incomes. On the contrary. So let's remember what the economists tell us about this issue. They say that the most efficient way of supporting farmers' incomes is through decoupled direct payments.
Already today decoupled payments are a central strand of the "safety net" which the CAP offers to farmers. And there are also arguments in favour of having some sort of system of decoupled direct payments after 2013 – though I will say more about this in a moment.
Before I do that, let me ask a rather controversial question: How should we divide up total CAP funding between different sorts of objectives?
I'm thinking here of two rough categories of objectives: on the one hand, those related to income support and market management; and on the other hand, those which we would associate with "rural development" in a broad sense.
At times, this is an area of furious debate – as we have seen from the discussions about modulation within the Health Check.
Some lobby groups are fighting tooth-and-nail to keep as much money as possible in the CAP's first pillar – especially in direct payments to farmers. Other groups are making furious efforts to win more cash for wider environmental, economic and social objectives.
In general terms, I would say this.
On the one hand, farming plays a pivotal rule in many of Europe's rural areas, and we need to set a policy framework within which it can prosper.
On the other hand, the wider rural economy and society are important for farming. Vibrant, economically diverse rural areas make much better bases for farming. Also, only now are we realising the scale of some of the environmental challenges that face us.
Therefore, whatever the size of the CAP budget may be after 2013, I find it hard to imagine that we will give a smaller slice of the cake to objectives which we naturally associate with rural development policy. The opposite seems much more likely.
A question which is related to this issue is perhaps the following one: To what extent will we want to target CAP money in future?
Direct payments help us to achieve a number of goals. As I've already mentioned, they support farmers' income. And through cross-compliance, they also help us to achieve certain environmental goals (as well as objectives related to animal welfare and public health).
But they do these things in a relatively untargeted way. The payment to a given farmer is not calculated on the basis of his or her income. Likewise, although decoupled payments are linked to standards through cross-compliance, their initial value is not calculated on the basis of these standards.
On the other hand, they have the advantage of being a relatively simple system.
By contrast, we do have policy tools which are much more targeted – mainly in rural development policy. We aim specifically at certain outcomes (or we calculate income foregone), and the payments made are calculated on that basis. But this process of targeting requires a lot of planning and evaluation.
So where do we want the balance to lie between simplicity and precision, both for income support and for other objectives (for example environmental ones)?
That question becomes all the more difficult to answer because, if we move the current balance towards more targeting, that would almost certainly mean a redistribution of CAP funding between farmers, regions and Member States.
For some, this would not be an easy political pill to swallow. As a former national minister, I understand that very well!
Nevertheless, in terms of public opinion, I think this is the way the wind is blowing. The European Union is becoming more transparent in its financial dealings, and the scale of certain challenges is becoming more apparent. In this developing climate, I suspect that we will have to show more clearly than ever before what "results" the CAP is delivering – results that the public supports and wants. We will need to do some more hard thinking to get this process of "linking" right in reality and in public perception.
I'm aware that everyone here probably has quite a lot to say on all these issues and therefore I should bear in mind another comment from Descartes. "Good sense" is apparently the thing that's most fairly distributed in the world – because no-one seems to want more of it than he or she already has. With that in mind, I don't intend to put my trust only in my own good sense, but I invite all of you to share your good sense with me now! Thank you.