I would like to thank Minister Stephane Travert for organising this conference at what is a very timely and important stage in the debate on CAP post 2020. The discussions here today have been very useful. They have allowed stakeholders to gain a deeper understanding of the importance of CAP across Member States, as well as here in France.
I also want to thank Commissioner Hogan and his services for their work on the CAP communication. This is a complex, but critically important issue for the future of the European Union. Against the background of the broader political challenges which face the Union at present, the provision of adequate funding for this common policy is more important than ever. The CAP binds the members of the European Union in a collective commitment to food security, environmental sustainability, and the protection of farm families and rural communities. Without adequate funding the CAP is an empty vessel!
With that in mind, it is important to remind ourselves of what CAP does for EU citizens:
- It guarantees food security for over 500 million European citizens;
- It maintains 10.8 million farms on 48% of European Union land;
- It helps to ensure that rural areas that are home to 55% of EU citizens are economically viable, and are not abandoned;
- It underpins employment for 44 million people within the wider food sector;
- It delivers the standards of food safety and animal health & welfare that EU citizens have come to expect;
- It protects water quality, biodiversity and landscape and provides tools to help farmers to mitigate climate change.
In Ireland, CAP supports an Agri Food sector that employs more than 173,000 people. This is 8.6% of total employment. The Irish Agri Food sector accounts for 7.6% of GDP. Indeed, it is Ireland’s largest indigenous sector, contributing some €26 billon in turnover. It is vital to the survival of rural and coastal areas where alternative employment opportunities do not readily exist.
So while even in Ireland, the CAP is not immune from criticism, we have good reason to value its contribution to the lives of our people and to the economy generally. And this contribution is reflected in rural communities across the European Union. Despite this, we have, as a community of member states, failed to communicate the great benefits of the CAP to the citizens of the European Union. We have to get better at this!
We have to explain that the CAP is not just a policy for farmers, but that represents the very best of the economic and social solidarity that binds us together as a community of member states. In many ways it is symbolic of all that is good about the European Union. However, stakeholders need to do more to better articulate the benefits of CAP for EU citizens.
This does not mean that we should be afraid to critically analyse the CAP, to face up to its deficiencies, and to improve it. Indeed it is our obligation as public representatives to do so. We are at the beginning of such a process now. In my view, the Commission’s CAP Communication of 29th November is a very good place to start. I would like to mention some of the important elements in the communication from an Irish perspective.
Direct Payments
Let’s start with direct payments. I welcome the strong commitment to them in the communication. They are crucial in providing income support and stability, and are a major element of family farm income. Of course they are often criticised because they are not responsive to market volatility. However, they have a value that goes beyond that, because farm families know that come what may in the market place, they will receive their basic payment every year. This is invaluable!
What is also very clear from [both today’s discussions and] the Agri Fish Council last week in Brussels, is that Member States are not in favour of co-financing of Pillar 1 Direct Payments. This would be a retrograde step which could undermine the “Single Market” and lead to “nationalisation” of Agricultural Policy. The communication proposes better targeting of Direct Payments through exploring a variety of options, including capping.
Ireland availed of the option under Article 11 of Regulation 1307/2013 and since 2015 has already put a cap of €150,000 on payments under the basic payment scheme. This means that no farmer in Ireland can receive more than €150,000 under the Basic Payment Scheme annually.
I am glad therefore that the communication refers to capping. However, my view is that any policy to apply a lower cap should be voluntary. Conditions are not the same across member states. For example there are very large farms in former Eastern Bloc Member States, in receipt of large direct payments, that support many families and employees.
So while the common narrative of 80% of payments to 20% of farms is emotive, and can be damaging to reputation of CAP, member states are best positioned to assess the reality on the ground.
Simplification and Subsidiarity
The big themes of this CAP communication are simplification and subsidiarity. As a proponent of subsidiarity, I am glad that this features in the communication in a significant way. The proposed new delivery model, with member states proposing measures within a framework laid down at EU level, can work for member states and farmers.
There are risks with it, however. We will have to work very hard together, to ensure that this does not lead to further complexity, and that integrity of the single market is preserved.
For example, given the experience with the approval of Rural Development Programmes after the reform in 2013, will European Commission and member state administrations have the capacity to develop and approve National Strategic plans without delaying payments? This is not intended as a criticism of either National or EU institutions. It is simply an observation that if the new system is to work effectively, any new system for the approval of National programmes must be much simpler than the old one.
Simplification is something we must continue to work at. It is much easier to say than to do, however. We need to make sure that schemes are straightforward to administer and control, and easy for farmers to understand. This way the administrative burden will be reduced for all, and the taxpayers and citizens of Europe will receive better value for money.
Simplification should also assist in reducing the error and non compliance rates. If schemes are too complicated, with too many detailed specifications and prescriptive actions, they become difficult to administer and control.
Environmental Public Goods
The provision of environmental public goods is also a major feature of the CAP communication. Our farmers are custodians of the countryside. Their actions have an impact on the environment and countryside we all share and many of us live in.
The environmental ambition of the CAP must be increased. CAP must help member states to meet their climate change and environmental obligations. However, if we expect farmers to deliver public goods, they must be remunerated for doing so. And we know that EU citizens agree with this proposition, because it was one of the very clear outcomes of the EU Commission’s CAP consultation earlier this year.
We need to be mindful that any increased environmental ambition must not lead to increased complexity. The key challenge for the CAP post-2020 will be to facilitate an increase in food production levels by up to 70% by 2050, in order to meet the requirements of a growing global population, while at the same time, facilitating adaptation to climate change mitigation strategies. Put simply, CAP must continue to assist farmers in producing more food in a sustainable manner.
Generational Renewal
We need new blood in farming! Farmers across the EU are an ageing demographic and we need to do more to encourage generational change.
This is a concern for all Member States. In that regard, it is good to see it centre stage within the CAP communication. We need a new generation of farmers, with the education and training to innovate, to adopt new technologies and improve the efficiency of their holdings.
Every sector or profession needs new young blood coming in with new ideas and ways of doing things. Equally important is the transfer of knowledge from the older to the younger generation of farmers.
The CAP communication rightly points to the need to combine EU measures with national measures such as taxation and other incentives, to stimulate generational renewal. This is one of the major challenges of our time.
Risk Management and Income Volatility
In recent years agricultural markets have been characterised by extreme volatility. We need better tools to manage risk. Agriculture is more vulnerable than any sector to the impacts of climate change and more regular extreme weather events, which appear to be increasing in prevalence. The “European model” of farming has many advantages, but it also means that we must provide a safety net for farmers, whose scale inevitably makes them vulnerable to market shocks.
Extreme market volatility is an increasing factor in managing farm enterprises. It is critically important that we have a flexible toolbox to deal with issues as they arise and to provide an effective safety net.
Existing EU instruments can still make a vital contribution! Instruments such as intervention and the new more flexible exceptional measures provided for under the Common Market Organisation Regulation have proven their worth. They must be retained as options.
And we also must explore the possibility of supporting income stability instruments, insurance, and mutual funds. We must learn the lessons of the past however. It is clear that most member states chose not to use these mechanisms in the current CAP, largely because they were too rigid in their application.
In that regard, the changes in the recent Omnibus Regulation around risk instruments are welcome. Ireland like a number of other Member States has yet to utilise these tools, however we will consider them again, in the context of CAP post 2020.
These tools should however, remain voluntary for Member States. There should also be an increasing role for the private sector in managing risk. In Ireland, our dairy co-operatives have developed a number of new instruments, including fixed milk price contracts and fixed margin schemes. While the challenges are different, I would like to see other sectors make an effort to insulate suppliers from price volatility in this way.
Strengthening the position of farmers within the supply chain
I have spoken at length about the benefits accruing to European citizens as a result of the CAP. None of this happens without the farmer. To preserve the European model, we need to ensure that farmers can make a decent living from their activities, particularly if we want the next generation to carry on the tradition.
While the CAP can help, it is also widely recognised that the farmer must obtain a fairer share of the margins along the supply chain. The citizens of Europe agree!
It is remarkable that 96% of respondents to the EU Commission’s public consultation on the future of farming, across both farmer and non farmer respondents, agreed that the position of farmers in the supply chain should be strengthened.
For this reason I support the Commission’s efforts on Unfair Trading Practices, and I know that this is an issue that exercises my French colleagues too. In a Single EU market, an approach deployed at EU level has the best chance of success.
Conclusion
The CAP has an image problem. If we are to fix it, we must ensure that it is seen as a policy of the future rather the past. Its value in underpinning investment, research, and innovation, and its practical application at farm level, must be appreciated.
We must also explain to citizens how it helps to improve competitiveness and resilience in the face of economic and climate challenge. We must explain that it underpins the production of food, using the highest standards of quality, safety and animal health and welfare in the world.
We must explain how it helps farmers to contribute to a better environment. And we have to do more under every single one of these headings! And if the CAP is to achieve all that we expect of it, we must ensure that its critical importance to the future of the European Union is fully appreciated, as we face into what will be a very challenging negotiation in relation to the financial framework of the European Union.
From Ireland’s perspective, I will be arguing for as strong a budget for the Common Agricultural Policy as possible. I look forward to working with the institutions of the European Union, with my Ministerial colleagues, and especially with my good friend Minister Travert, to deliver the best possible Common Agricultural Policy for the citizens of the European Union into the future.
Thank You.