29 January 2008 - Commissioner Mariann Fischer Boel spoke in Dublin to the Irish Farmers' Association Annual General Meeting on 29 January 2008.
See full text of the Commissioner's speech below.
[Ladies and gentlemen],
It's nice to be back in Ireland, and a pleasure to join you for your annual general meeting.
In the farming world, we're not exactly short of things to talk about at the moment.
One of my favourite topics just now is, of course, the CAP Health Check.
A number of people were surprised that I started dropping hints about what would be in the Health Check several months before the Commission launched its "communication" last November.
Now I can give you the reason - and it's all about Ireland.
Someone in Brussels who is a big fan of Ireland and the Irish once told me a proverb. According to that proverb:
"An Englishman thinks while seated. A Frenchman thinks standing. An American thinks while walking around. And an Irishman thinks afterwards!"
But no-one could tell me how long afterwards. So I thought that, if I started talking about the Health Check in 2006, then by November 2007 Irish farmers would have something to say in reply!
But of course, in reality, I know that you're right on top of what's going on in agricultural policy, and I'm looking forward to hearing your comments today.
Also, I know you have a number of concerns about the Health Check. So in the next few minutes, rather than run through the Health Check in detail, I want to pick up on one or two points of particular relevance.
Let me start with the Single Payment Scheme.
As you know, there's a section in the Health Check communication about flattening out the single farm payments that different farmers receive – in other words, reducing the differences between these payments. And I know that this has set a few alarm bells ringing in Ireland.
Let me reassure you: this section of the Health Check is nothing to worry about. If you still want the "historical" model of the Single Payment Scheme, you can still have the historical model.
I personally think there's a strong case for reducing the variations between individual payments. I think that, in the years to come, the public will find it hard to understand why Farmer X is paid more each year than Farmer Y just because of production decisions that he took 10 years earlier – or perhaps, because of decisions taken by his predecessor!
This is why I propose to give Member States the option of flattening out payment levels. But we are talking about an "option" here. I don't want to impose change on countries which feel that their system is working well.
I know you also still have concerns about cross-compliance.
As you know, changes to the system are already underway.
I have to make it clear that we are absolutely not going to unpick the principles of cross-compliance. We need cross-compliance in order to link direct payments to things that the public wants – and therefore, in order to justify those payments.
But new systems often experience teething troubles, and we've seen that with cross-compliance. The changes adopted by the Commission last December and by the Council last week with regard to rules on control and sanctions should lighten the burden on farmers and national administrations – but without hampering the system's effectiveness.
Let's be clear that these changes are not window-dressing: they're real changes. A good example is the introduction of a de minimis penalty level of € 100, beneath which the penalty won't actually be charged. Other important changes are the concept of "minor infringements" which won't lead to a fine at all, and the abolition of the 10-month rule.
The work on cross-compliance is ongoing within the Health Check – especially on the scope of application. We have to concentrate on the fundamental obligations and remove everything that does not pass this test.
We might also have to add a new standard if something important was left out back in 2003. This could for instance be the case with regard to water management.
I would also like to give some reassurance about plans for agricultural market instruments.
There seems to be a fear in some parts of the European Union that the Health Check is about "liberalisation without rules", or something of the sort.
This is absolutely not true. Within the Health Check, we're not trying to choose between black and white. Our options aren't limited to heavy-handed regulation of markets on the one hand, or free-for-all liberalisation on the other hand.
We're looking for pragmatic, balanced solutions that work in the real world.
Certainly, I want to "liberalise" where farmers who want to raise production and profits find needless obstacles in their way. The milk quota system would be a good example of this.
On the other hand, this is not liberalisation without rules or boundaries.
In the case of milk quotas, for example, I want to take the right steps to give the sector a "soft landing" when the quota system runs out in 2015.
Ireland and other Member States recently made it very clear that their farmers needed more milk quota as soon as possible so that they wouldn't miss the boat as market opportunities open up around the world. This is why I proposed an increase of 2 per cent for this year.
Within the Health Check, we will very probably propose further increases before 2015 – enough to help meet demand, at a rate that will not undermine the market's stability.
In parallel with this, if there are economically fragile areas which really depend on milk production, I want to help them survive in a world without milk quotas – whether through rural development policy, or possibly measures under "Article 69", which would allows to top-slice the direct payments by a certain percentage and the money could then be used for the dairy sector.
The main point about our market tools like intervention, export refunds or aid for private storage is that they should serve a useful purpose, not simply slow down farmers' ability to respond to market signals.
For me, that useful purpose is to act as a genuine safety net. They should not set market prices, and we should not have to clear out the storehouses with subsidised sales to make the system work.
What do I mean when I talk about "safety nets"? I mean that, in the case of a real market crisis, our market tools prevent farmers from being forced out of production and losing their livelihood. This is what I want to achieve in the Health Check.
Related to the topic of market tools is the issue of managing risks and crises.
It's important to remember that lots of different tools exist in the European Union to help farmers deal with life's many uncertainties.
Member States have decided very clearly that, if more is done to help at the level of the European Union, this should not interfere with what Member States are already doing, and it should not be seen by the WTO as distorting trade.
However, it seems that what is available related to the climate and animal health is not complete. So I would like to set a new framework for such measures so that Member States can better deal with damage to harvests, and animal disease.
I don't want to say too much today about the other challenges mentioned in the Health Check communication: fighting climate change, managing water, making the most of bioenergy, and preserving biodiversity.
But as you're aware, last week the Commission proposed a large package of measures related to climate change, and European agriculture can't ignore the issue. We have already curbed greenhouse gas emissions from farming – these now account for 9 per cent of the European total – but we will have to go further.
Rural development can help farmers to meet new obligations in this area, and to face the other challenges which I've just mentioned.
This is the main reason why we desperately need more money in the rural development budget. This is why I have proposed an increase in the rate of compulsory modulation.
I know that this idea is not especially popular over here. But I would ask you to bear four points in mind:
First, a healthy slice of the money in the rural development budget is spent directly on farming.
Secondly, even the funding not spent directly on agriculture benefits farmers indirectly if it strengthens the rural communities in which farming is embedded.
Thirdly, moving funding to rural development means that more money is spent on the countryside overall, because of co-financing. So every Euro paid by the EU would be added by another Euro from the national budget.
And fourthly, European citizens expect us to have a strong rural development policy. They connect very clearly with its goals.
Overall, I think the case for moderately increasing modulation is strong.
Of course, while we have all these discussions about domestic policy on the boil, we're still working hard to get an agreement in the Doha Round.
In the next few days, the chairman of the agricultural negotiations should put a new draft outline agreement for agriculture on the table.
I don't know what's on its way. But I will say this. Any deal which could emerge in the weeks ahead must be comprehensive and cover issues of clear interest to the European Union. That means that the following issues need to be adequately addressed within the agricultural package:
our limited flexibility in market access, notably as far as the treatment of sensitive products is concerned to which clearly belongs the beef;
our offensive interest in domestic support, notably as regards the disciplines for US agricultural support;
full parallelism in the export competition pillar; and
sufficient protection of our geographical indications (GIs).
In this context I want to repeat what I have said many times before: for the agricultural negotiations it is absolutely clear that the CAP reform 2003 is Europe's important contribution to the Doha Development Agenda and marks the limits for its negotiating brief in the WTO round. The reform gives us a margin of manoeuvre – but we can use this only if our WTO partners come up with equivalent concessions in agriculture and elsewhere.
The Doha Round is not only an agricultural round! The ambition in agriculture must be fully matched in the other areas of the negotiations, notably non-agricultural market access, services and rules.
Therefore, once we get back to discussions at ministerial level, there will be a balanced deal, or there will be no deal. The European Union must come away from the table with gains in areas of interest to us. We cannot and will not be the sole banker in this WTO round!
At the same time, I know you're keeping a very wary eye on an issue of bilateral trade: beef exports from Brazil to the European Union.
I've taken your concerns about Brazilian beef very seriously; and I've made this clear to my colleague Commissioner Kyprianou, responsible for food safety.
The Brazilians must play fair.
If they want to export beef to us, that beef must meet the agreed standards - standards which Europeans demand.
So on the basis of the findings of last November's inspections, we have taken action.
But we also have to play fair.
Our response must be in proportion to the problem. We can't impose a total ban on Brazilian beef unless that's the only viable solution.
Our response thus far meets that criterion of being in proportion. And make no mistake: the new rules which we have set down are demanding. We expect that, out of the 10 000 holdings which are currently eligible to export to us, only 3%, which means about 300 holdings, will initially make the grade under the new rules.
In any case, we will keep reviewing the situation to make sure that we've solved the problem. If our chosen solution fails, we will find a better solution, which ultimately could be a total ban. Because our animal health and food safety standards are non-negotiable.
Ladies and gentlemen, I think I've said enough for the moment.
As always, I'm looking forward to hearing what you think.
As I said earlier: according to that proverb I mentioned, Irishmen do their thinking "afterwards". But after listening to me today, don't wait too long to tell me what you think about the Health Check!
It would be nice to get the Health Check wrapped up this year, so if you leave it very late to give me your thoughts, you'll miss the party.
This would be a shame, because who knows better than an Irishman how to get a party going?!
Thank you for listening.