EUROPE MUST HAVE A STRATEGY FOR ITS AGRICULTURE
Presentation of the outcomes and recommendations of the Global Food Forum 2017
Opening speech of Michel DANTIN, MEP.
Dear colleagues and friends,
I am pleased to welcome you here today at the European Parliament and to present the recommendations of the 2017 Global Food Forum, which brought us together in Italy last October.
We had just completed negotiations for the Omnibus Regulation, the famed CAP Health Check, undertaken as a trio with Albert DESS and Paolo DE CASTRO.
But that seems a long time ago now and the reform, the much talked-about reform of the CAP, is now underway following the publication of Commissioner Phil Hogan’s Communication on the 29th November last.
The European Parliament is already hard at work with tireless effort from Herbert DORFMANN and Clara AGUILERA, and the Council is preparing conclusions with the aim of commencing work next June.
You’ll be aware of the Commissioner’s opening gambit: a new delivery mechanism, new green architecture, and a retargeting of directs payments are the main measures on the table.
While reading through the Communication, a thought occurred to me: 30 years after the MacSharry reform in 1992, is this anniversary an opportunity for a genuinely root and branch reform?
Speaking in historical terms, is the forthcoming reform truly a far-reaching one? Or is it an evolution, rather than a revolution, a technical tweak, rather than a new departure for policy?
Is it, finally, a minimalist’s reform that ducks the real challenges or, as is more likely, a clever way of coping with the administrative reform of DG AGRI and future cuts to the agricultural budget ‒ combined with a new way of getting Europe and Member States to cooperate?
As is often the case in Europe, the devil is in the detail, and sometimes the details can be expensive.
The context of the reform
We are all aware that the European Union is going through a series of unprecedented crises. Crises whose impacts on the EU’s budget, on its trade, on its politics, and on its administration will have profound consequences for the CAP. These crises go by the endearing names of BREXIT, SECURITY, DEFENSE and MIGRATION.
The departure of the British will leave a gaping hole in the European budget. The Chairman of the Budgets Committee, Jean ARTHUIS, will correct me if I’m wrong… this hole is equivalent to a net loss of not less than 6 to 10 billion.
Protecting the CAP’s budget in this context is going to require unswerving determination. In addition to new spending priorities, the percentage loss to the CAP from Brexit currently stands at between 5 and 10% of its funding, that’s between 3 and 5 billion Euros. This will likely lead to a percentage fall in European agricultural revenue of between 6.5 and 10.4%.
Brexit will hit trade: how hard will depend on the new trading arrangements that are agreed on, but exports to the UK will be impacted: I am thinking of French fruit and vegetables, Irish beef, or Italian Prosecco.
And politics is reeling. The shockwaves from the British referendum and the rise of nationalisms and populisms in Europe have reached the 13th floor of Berlaymont. The Commission’s plan to save Europe is to give the appearance of passing the baton to Member States and to promote cooperation with them based on a sort of vigilant subsidiarity. And the Commission must also address the loss of staff from traditional policy areas, now committed to the new challenges of (European) security, defense, and migration.
To address these challenges (the Commission) must come up with a magic formula that:
- on the budget – makes savings from administrative & implementation costs;
- on trade – helps affected sectors to adapt, via a flexible agricultural policy, and lastly,
- on policy – passes the baton to Member States, so that they commit to delivering on agriculture and shoulder the responsibility if implementation problems occur or if targets are not met.
Does the (Commission’s) Communication satisfactorily address these challenges? I’ll let you make up your own minds.
And all of this begs another question. Do we have the time?
The reform timetable
Despite the importance of these challenges, I would point out that the CAP has already seen numerous reforms over the last 20 years.
Farmers are crying out for a period of stability, but also for a fresh status, one which allows them to hold their heads high as businesses and function as creative entrepreneurs.
However, the Commission is unlikely to be able to put forward a legislative proposal in time to allow the Council and the European Parliament to reach agreement before the European elections in 2019.
This leaves us with only 8 months to complete a reform of the CAP and with only two weeks for the trilogue negotiations. You’ll recall that we needed 22 months between 2011 and 2013. By this yardstick the timetable is unrealistic!
In the current very challenging situation, I do think we need to take the time that is needed!
And we must be careful not to underestimate the impact of Brexit on the agricultural sector; which will mainly be in terms of trade.
We need to work together to address the genuine challenges that European agriculture is facing today.
And we need to work together on a root and branch reform immediately following the 2019 elections. Such a reform will have to provide a robust and realistic response to the competitiveness and environmental challenges facing European agriculture ‒ and it will have to strengthen the resilience of our production systems and rural territories.
Bearing all this in mind, allow me to share with you a deep-felt conviction:
Europe needs a strategy for its agriculture.
Europe is an old continent, with human development in virtually every corner, and we have a duty to maintain activities in our rural areas and keep them open. To help our rural areas navigate the transformations underway and the challenges of our time, we need a strong, sustainable, and creative agricultural sector.
To respond to the challenges of globalisation, of food security, of climate change, and of the increasing demands of our citizens, European agriculture is going to have to produce more with less ‒ and increasingly so ‒ and we need a CAP to do this!
We also need a CAP to ensure the economic viability of our farms, to meet the economic and social challenges of rural areas, and to respect the European union’s climate and environment objectives.
With Commissioner HOGAN’s proposals as a starting point and following a timetable that we will decide in the Parliament and the Council, we have a duty ‒ and must have the courage ‒ to put forward a new framework, and we must neither be too complacent nor too easily satisfied.
The proposal to introduce a new delivery system will only be deemed to have been a good one if it genuinely simplifies, not only for DG AGRI and the Member States, but also for farmers.
Similarly, I am not opposed to Member States drawing up strategic plans, because these are essential to ensuring coordination between the CAP’s goals for agriculture and food and other national level goals such as spatial planning, social policy, or environmental challenges.
I would like to stress, however, that the CAP is and should remain a common policy. The CAP ensures that the internal market in agricultural products functions as it should, and that all Europe’s citizens have access to a healthy and balanced diet. Any form of renationalization is out of the question.
Moreover, in this new architecture, the European Parliament and the Council must still be able to determine common rules and basic standards, as well as determine the instruments of policy and appropriate financial allocations. Member States may be given some room for manœuvre, as long as this is done in the respect of internal market rules.
The operative expression here is ‘common rules’ and it constitutes a ‘red line’.
But everything I have discussed so far concerns the how of policy delivery. It is also necessary to discuss what the CAP needs do to support agriculture.
So, what should the next CAP do?
The CAP will have to provide the means to ensure the resilience of Europe’s different agricultural industries so that they can continue to ensure our food security in a context of market and price volatility, rising production costs, and climate and health risks.
In this respect, direct payments are legitimate both as a basic component of farm income and as remuneration for the provision of certain public goods that only farmers are in a position to supply to society.
Direct payments must be maintained. This is a red line. Any proposal that advocates co-financing for Pillar 1, whether mandatory or voluntary, would cross this line. Any such measure would constitute the end of European solidarity, and thereby the end of the common dimension of the CAP. It would seriously risk fragmenting the single market.
Herbert would like to see a debate about historical references and the distribution of funding resources, and let’s be honest about this, this is a debate we should have had a long time ago.
Likewise, the issue of the convergence of support between Member States is one we cannot avoid. But it continues to be important today that we look at this issue with a sense of fairness, which means bearing in mind that countries have different living and production costs.
Direct payments must also be supplemented on a voluntary basis ‒ but on an increasing scale ‒ let’s assume this is the direction of travel for policy ‒ with risk management or insurance-based tools in order to cover growing climate, health, and market risks. A first step in this direction was taken by the Omnibus Regulation, and it would seem sensible to take this further.
But risk management tools aren’t a magic wand that can be used to cover all risks. The Union needs a more effective means of responding to crises that can affect agriculture. It needs a crisis or emergency reserve that can be deployed easily and that would not be subject to the principle of budgetary annuality.
A final way to increase the resilience of Europe’s agricultural industries is to ensure that farmers obtain more of their revenue from the market – today, on average, less than 50% of farm income comes from the sale of production…Is this sustainable? Is it responsible?
One of the reasons, although it is not the only one, is a misfiring supply chain. This is a long-standing debate…and some hard-won solutions have been obtained via the Omnibus Regulation… I am referring to competition law and to PO; and there’s more to come thanks to the determination of Commissioner HOGAN with his proposal for legislation to tackle unfair trading practices and improve market transparency. We are making progress.
Competitiveness and sustainability in the agriculture sector
The CAP must also strengthen the competitiveness and sustainability of the agricultural sector. The aim is to build today and prepare for tomorrow.
Let’s accept a simple truth, and one we all agree on: that the CAP is first and foremost an economic policy! The CAP cannot solely be an environmental policy, because if agriculture and the rural territories in which it thrives are unsustainable in economic terms, then farmers will not be able to meet our environmental and climate objectives.
The CAP should become, once again, a policy that’s about investing, investing in scientific progress, investing in research and innovation. It should be about access to finance for farmers. The CAP needs to enable farmers to meet the economic and environmental goals that society expects them to. Why not allow Member States to pursue sectorial strategies as part of Pillar 2’s rural development policy! In this respect, the Wine programme and the Fruit and Vegetable programme can be a source of inspiration.
To unlock the agricultural sector’s economic potential and also enable it to play an ambitious environmental role, the CAP must also cease to be prescriptive.
A CAP that gives its farmers more freedom is a CAP that enables its farmers to express their innovative potential!
The CAP must therefore take a different approach to how it achieves its environmental goals. The complexity of the CAP’s greening measures and the prescriptive nature of its instruments have destroyed the farm manager’s ability to innovate and has led to all round distrust!
I believe that it is crucial to place the farmer at the heart of this policy. The green payment needs to be simplified and attuned to local circumstances. It should give more scope to innovative methods and be results-oriented, but it should not imperil the common nature of the CAP in the name of unfettered subsidiarity.
We need to expand the use of certification and equivalence measures. These could relate to a list of environmentally virtuous practices agreed at European level as basic common standards.
I am also convinced that new technologies, precision agriculture, and the European programme Copernicus can contribute to the competitiveness and sustainability of the agricultural sector. We would do well to support a technology roadmap for our agriculture that makes use of these assets.
And finally, the CAP should continue to ensure the development of Europe’s rural territories and generational renewal.
In this respect, the Cork 2.0 declaration for a dynamic rural development policy and the calls for more ambition in relation to managing generational renewal, should guide our action.
This is how I am approaching the forthcoming reform and these are the thoughts that I wanted to share with you before giving the floor over to the President of the Global Food Forum.