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Dacian Cioloș

Member of the European Commission Responsible for Agriculture and Rural Development

To reconcile the expectations of the markets and of society: opening a new path for Europe and its farmers

5th Forum for the Future of Agriculture

Brussels, 27 March 2012

Ladies and Gentlemen,

Thank you for inviting me again to this event for an open debate on the future of the Common Agricultural Policy.

As you know, the proposals for the reform of the CAP were put forward in October. The discussions are advancing on a technical level, in particular with effective work by the Danish Presidency and the rapporteurs in the European Parliament.

Most of you know the details of the reform. They will be debated further over the coming months. So today, I propose to place this reform in an historical perspective – to emphasise its main dynamics. This will enable us to look to the future, to see the reform's medium‑ and long‑term guidelines.

Farmers need a clear line for the coming years. They need a clear line at political level, with a reform which shows the way. We must not sell ideological illusions. On the contrary, we must offer instruments on which we are capable of finding a consensus among 27 Member States. We must find instruments which can be effective, taking account of reality and today's challenges.

Farmers also need a clear line at budgetary level. I am not going to go further into this point, even though it is fundamental. Nevertheless, I wish to emphasise that the European Commission has shouldered its responsibilities. It has made a budgetary proposal which is both realistic and consistent for the Common Agricultural Policy. The Member States and the European Parliament must at least confirm our approach so that the reform can be applicable.

What were the driving forces behind the previous reforms? They are well known, but we need to remind ourselves of them from time to time.

  • On the one hand, specific problems relating to certain CAP mechanisms. They led to too much budgetary expenditure.

  • On the other hand, external pressure relating mainly to the European Union's wish to make progress in the WTO negotiations. On this last point, this strategy has not yet borne fruit, at least in the multilateral negotiations.

The past 20 years have been marked by a gradual disengagement by public authorities. We have relinquished many of our options to intervene on the markets, in an economic and financial context which pushed for the abolition of ineffective measures. This has opened the way for high‑performance agriculture.

But it has been found that we have not introduced alternative mechanisms. With safety nets we have traces of the old tools, but not real tools for action to anticipate, to act, to give farmers the means with which to face up to increasingly numerous crises.

Moreover, we have left an impression of disengagement, but without making the CAP easier to understand – on the contrary.

This creates two problems:

  • The first is the meaning of the CAP and its instruments outside a very restricted circle of experts. The CAP has to be understood by citizens and taxpayers. I do not know whether you have already tried to explain the principles of decoupling or historic rights to someone who hasn't been 'initiated' in the CAP. It is a difficult task. When we talk of decoupling we are dealing with the past. We are not looking into the future. We are not addressing the considerable challenges facing agriculture.

  • The second problem is that of the means of action. As I have said, we have dismantled a certain vision of framed market management. This had to be done. But we have only gone half way. Today's CAP somehow pushes farmers to race against time. It pushes them to live and act in the short term. This makes it very difficult to define long‑term strategies. The specific nature of the different agricultural sectors is making itself felt more and more on the markets and in the regions. Not only must we guarantee food safety, we must also respond to society's more and more pressing demands. These pressures are bearing down on farmers who are fewer and fewer in number and are increasingly worried about their income. Let's be honest, we now play the role of firefighters, often without a fire hose. With the current agricultural policy, we are firefighters working with a watering can.

We need to restore the meaning, the sense of the CAP. That is what we want to do with this reform.

We must rethink the role of public authorities, make our instruments coherent again, particularly direct payments, and review the position of professional operators, particularly as regards market management. The professionals must have the means to face up to markets sustainably.

The idea is not to go backwards. On the contrary, it is to go forward with a new vision of agriculture's role in society and the role of this major public policy in the service of all Europeans.

Before setting out my vision of the future, let me say a few words about the challenges facing the farm sector. These challenges mean that, more than ever, we need a strong agricultural policy.

The CAP must take on board the ways the world has changed in the past few years. Once again, the CAP needs to help European agriculture itself to negotiate change.

Europe has changed. It has enlarged. It now has to deal with a wide range of situations and issues affecting the development and restructuring of its farming communities.

Farmers' professional activity exposes them to market forces in the shape of the prices they receive for what they produce. They are subject to public scrutiny as regards food safety and how they handle natural resources as public assets.

In future we will not be able to assess and govern European agriculture primarily on the basis of broad‑brush instruments such as direct area payments.

The sectoral approach (for milk, fruit and vegetables, etc.) will cease to be effective if it remains rigid and over‑centralised. We need a cross‑cutting of the sectoral and regional approaches within one coherent agricultural policy. In order to remain a common policy, the CAP must cater for the needs both of sectors and regions.

Financial support for agriculture must give farmers the incentive to produce public goods. The aim, in return, is to avoid a situation where they are left to contend with the insuperable vagaries of the market and of nature.

Such challenges cannot be overcome by the State controlling everything, nor by short‑term ad hoc action or ex‑post reaction. We have to formulate a new approach.

The Commission is taking a first step with this reform. And we will be following this up with the sectoral reforms that are in the pipeline.

The new approach will involve a new role for 'Brussels'. It is no longer in some office here in Brussels that we should decide how many tonnes of this or that product should be put on the market or exported.

Such instruments are too inflexible. They cannot adjust to a constantly shifting environment. They just mislead farmers into thinking that we can make time stand still.

We have to allow operators more scope to regulate their own activity. Currently, they do not have the means to do so. This means that we must review how sectors are organised, revisit the role of professional and interprofessional associations when it comes to market instruments and give them a genuine raison d'être.

We must also take another look at our competition rules so that they can be applied in practice. Agriculture is not just another sector among many. It is very fragmented. This fragmentation is a strength, but also a source of fragility. Any large business decides for itself whether to increase or reduce production. By the same token, we must give market operators, collectively, the means to avoid driving into brick walls.

The work about to be completed by the Food Supply Chain Forum could provide us with some indications as to what still has to be done in this area.

Public authorities have to be in a position to offer legal instruments and to manage those instruments to ensure they are put to good use. They must be able to put in place effective safety mechanisms that are less costly than in the past. This is the essence of the current CAP reform.

European agriculture needs to be enabled to perform its main function of producing food. At the same time, it must not forget its wider services to society – the management of natural resources and the economic development of rural communities.

This is what we are proposing with the 'tool box' for managing the markets and organising the sectors. This is what we proposed with the 'greening' of the CAP, which is also a kind of environmental security mechanism for avoiding irreversible excess and destruction.

It is for public authorities, by means of agricultural policy and a public budget, to reconcile the opposing expectations of the markets on the one hand and society on the other. It is our role to strike the balance between what is feasible and what is acceptable.

The European Commission's proposals serve to kick off the process of change. I am well aware that they are just a first step. Many more tasks await us after and alongside this reform.

The key thing is that farmers should have real control over their own future. Farmers must be in charge of the decisions they take – within a public framework that ensures food safety, proper management of natural resources and growth, employment and development in our rural communities.

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