Agriculture News Digest

       No. 25     12 November 2002

Fischler in Ireland: "CAP reform not put on ice"
Fischler calls for realism in enlargement end game
Fischler meets ministers from all candidate countries
Commission publishes study on possible options for the reform of the EU's milk sector
Further liberalisation of agricultural trade with Slovenia
Commission to recover EUR 86.36 million of CAP expenditure from the Member States
EU Budget 2003 Amending Letter: less money needed for agriculture
Speeches by Commissioner Fischler
What's new on the Commission's "Agriculture" web site?

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 CAP reform: mid-term review
Fischler in Ireland: "CAP reform not put on ice"

11/11/2002 - Franz Fischler, Commissioner for Agriculture, Rural Development and Fisheries, discussed the Commission's proposals to reform the Common Agricultural Policy (CAP) in Ireland today. Speaking to the press, Fischler underlined that the Summit conclusions made no statements which "put the mid-term review proposals on ice". "The Heads of State do not expressly rule out the possibility of the mid-term review being adopted before 2006 nor do they prevent decisions from not being implemented until after 2006. Last week's decisions have not changed our objectives or the need to continue with the process of reforming the common agricultural policy. We need a more market-oriented approach in agriculture. Agricultural production must be geared to demand, in other words, consumers' desires, not to artificially created price incentives". The Commissioner pointed out that one major consequence of the Summit was that 70% of the direct payments for the new Member States, as well as the implementation of all upcoming reforms would have to be accommodated within a CAP budget frozen at the level of 2006. "The cake will have a similar size as today, but more people will want - and need - to eat from it. But there is also a positive side of this fixed budget. We now know how much money we will have available until 2013. This is a clear mandate to try and guarantee a long-term planning security for our farmers".


 Agriculture and enlargement
Fischler calls for realism in enlargement end game

08/11/2002 - Speaking at a press conference in Prague, Franz Fischler, EU Commissioner for Agriculture, Rural Development and Fisheries, urged his Czech partners to focus on the possible and on what is best for the Czech Republic during the endgame of the EU accession negotiations. "The time for playing politics is over. Realism and pragmatism must be the order of the day. Following the decision of the Brussels Summit, from 2007 on, the progressive increases in the direct payments for the new Member States must be funded from a fixed budget which is based on 2006 spending. The budget does not, therefore, cover such increases the money must be found by savings within the fixed envelope. Furthermore, any additional market expenditure arising, for example, from increases in the number of suckler cows, beyond those calculated in our first proposal of January last, will also have to be found through savings within the fixed envelope. You will understand that this means the margin of manoeuvre of the EU-15 has become far narrower". Fischler also praised the Czech farming sector. "They have come a long way in terms of restructuring and modernisation. But still much work has to be done in the run-up to Czech accession. I know that especially Czech farmers ask themselves sometimes: 'Is the effort worth it?' My answer is yes. What should never be forgotten is that the Czech farming sector will earn more money after enlargement, with or without direct payments", he said.


 Agriculture and enlargement
Fischler meets ministers from all candidate countries

07/11/2002 - Franz Fischler, Commissioner for Agriculture, Rural Development and Fisheries met the Agriculture Ministers from all the 13 candidate countries in Prague. This meeting marked the last opportunity for an exchange of views before the final round of enlargement negotiations for ten candidate countries. Mr Fischler urged the ministers to pursue a realistic approach in the end game of the enlargement negotiations. "We have a mere six weeks to complete them. To achieve this common goal we need realism and pragmatism. Rather, the last few weeks should be used to carefully assess what improvements in the negotiating position of the EU you think you can justify, on the basis of objective data, convincing enough for the Member States to be prepared to defend the results to their own farmers. Changes which incur additional budgetary expenditure will be the most difficult. The decision of the Brussels Summit to freeze the CAP budget means that any improvement can no more be covered by an increase in the available budget. It will have to be paid by other EU farmers. Don't forget that the money for the phasing in of direct payments for the new members after 2006 will not fall from the sky - it has to be found within the ceiling now established". Fischler also insisted that the economic situation of farmers after accession would improve for four reasons 1) better opportunities in an EU-market of 500 million consumers, 2) higher prices and other CAP support mechanisms, 3) substantial rural development support and 4) the phasing in of direct payments.



Commission publishes study on possible options for the reform of the EU's milk sector

07/11/2002 - A 'Study on the impact of future options for the milk quota system and the common market organisation for milk and milk products' has been published by the European Commission. Aimed at assessing how dairy markets and production outcomes will be affected by alternative policy reforms, the study performs an ex-ante quantitative assessment of alternative dairy policies for the EU for the period 2000 to 2014, with the help of modelling tools. The report analyses the impact of four different sets of scenarios for the future of the EU milk quota regime : a status quo scenario which corresponds to the Agenda 2000 policy package ; repeating the Agenda 2000 approach which assumes the Agenda 2000 reform is deepened over the period 2008-2010 ; a two-tiered and cut quota scenario; and the quota abolition scenario. The impact on the milk and dairy products markets and EU milk producers are also evaluated, as are the consequences for the EU budget, EU consumers and the processing sector. Commissioned by the European Commission, the study was undertaken by a consortium of experts from the Institut National de la Recherche Agronomique (INRA, France) and the University of Wageningen (Netherlands). The findings contributed to the Commission's Report on Milk Quotas.


 Agriculture and enlargement
Further liberalisation of agricultural trade with Slovenia

06/11/2002 - In the framework of the "double profit" agreements between the EU and candidate countries, the Commission adopted a proposal for a Council Decision in view of additional liberalisation of agricultural trade with Slovenia. The agreement with an additional duty free trade coverage of around EUR 100 million incorporates a substantial improvement in existing concessions and addresses further new concessions in the cereals sectors. The deal includes granting reciprocal duty-free tariff quotas of 20,000 tonnes on wheat, 9000 tonnes on rye, 32.000 tonnes on barley and 20.000 tonnes for maize. Both sides agreed complete liberalisation for other cereals, malt and molasses, as well as over 220 other agricultural products, in particular in the fruit and vegetable sectors. The agreement also involves a commitment from the parties to remove export refunds for the cereal sectors. The proposal has now to be adopted by the Council and will most likely enter into force on 1 January 2003. In parallel, the Slovenian authorities are in the process of implementing the concession agreed for EU exports to Slovenia.


 Clearance of accounts
Commission to recover EUR 86.36 million of CAP expenditure from the Member States

05/11/2002 - Following a decision of the European Commission, a total of EUR 86.36 million of EU farm money misspent by Member States is to be claimed back. The money is to be recovered because of inadequate control procedures or non-compliance with EU rules on agricultural expenditure. While Member States are responsible for paying out and checking virtually all expenditure under the Common Agricultural Policy (CAP), the Commission is required to ensure that Member States have made correct use of the funds. This audit procedure is a vital instrument for controlling CAP expenditure, permitting the recovery of sums paid out without sufficient guarantees as to the legitimacy of the payments made or the reliability of the control and verification system in the Member State concerned.



EU Budget 2003 Amending Letter: less money needed for agriculture

30/10/2002 - As in October last year, the Commission decided on a letter of amendment to the coming budget, to update agricultural expenditure and fisheries agreements' estimates. Despite a stronger Euro, the budgetary needs for agriculture in 2003 are estimated to be EUR 337 million less than initially expected. These savings in agriculture are largely attributable to advances for direct aids to cereal producers, amounting to EUR 974 million already paid out in 2002. In comparison to the financial perspective, agriculture is likely to be EUR 2.6 billion under the ceiling in 2003. In 2002 there will be lower than expected expenditure on the 2002 agricultural budget. A prudent estimate of this surplus will be budgetised in 2003, which will mean that revenue required from the Member States in 2003 can be reduced already by EUR 500 million.


 Commissioner Fischler's web site
Speeches by Commissioner Fischler

"Towards sustainable farming - Ireland and the Common Agricultural Policy" (Meeting with agri-business sector, Dublin, 11 November 2002)

"Enlargement: Opportunities in a new era" (DG Agriculture Information Conference, Prague, 8 November 2002)

"EU Accession of the Czech Republic - Challenges for Agriculture and Rural Areas" (Meeting with Farmers' Associations and Agri Business Representatives, Prague, 7 November 2002)

Speech at the Ministerial Meeting with all Agriculture Ministers of the Candidate Countries (Prague, 7 November 2002)

Statement in response to oral question on the CAP (EP-Plenary Brussels, 6 November 2002)


 Publications
What's new on the Commission's "Agriculture" web site?

"Study on the impact of future options for the milk quota system and the common market organisation for milk and milk products"



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(c) European Communities, 2002