Brussels, 12/07/2011 (Agence Europe) - Speaking on Monday 11 July, European Agriculture Commissioner Dacian Cioloº sought to reassure MEPs concerned by cuts in the CAP budget for 2014-2020. He said that the fact of retaining funding for direct payments and rural development, with the creation of new budgetary lines for minimising the crisis situation and the impact of globalisation, is along the lines set for achieving common agricultural policy objectives.
Paolo De Castro (S&D, Italy), who chairs the agriculture committee, said they did not want this policy to have slimmer resources in the future, as it must meet the interests of Europe's 10 million farmers and 500 million consumers.
Albert Dess (EPP, Germany) said direct subsidies will fall from €413 to €306 billion and the agricultural budget will be cut by 11%. “We find it unacceptable that agriculture should be the only sector which has such large cuts in its budget”, Dess said. The EP has called for the agricultural budget to remain unchanged over the period 2014-2020 (compared to 2013), he pointed out.
Luis Capoulas Santos (S&D, Portugal) said “this proposal is not at all what we had expected”, asserting that they believed the real decrease in the agricultural budget (the result of the proposal) to be around 7-10%. He wondered how the new reserve for addressing crises in the agricultural sector would be activated (€3.5 billion over the period 2014-2020), and was sceptical about the real possibility of using the European Globalisation Adjustment Fund in the agricultural sector. Capoulas Santos went on to express the fear that some of the funding would remain in the “virtual domain”, going on to conclude that: “We want to improve this proposal and help you, Commissioner, to obtain a budget allowing for new challenges to be raised”.
George Lyon (ALDE, UK) does not understand why the Commission has agreed to a real freeze on cohesion policy, and to a cut in CAP spending. How, he asked, can direct payments be funded while at the same time taking into account the demands made by the new member states and EU enlargement?
James Nicholson (ECR, UK) took the view that they had done well to obtain what they had managed to obtain. However, he asked, how will this budget allow food safety to be guaranteed in the future? He wondered whether the Globalisation Adjustment Fund (applied to farmers) was the carrot held out to livestock farmers to make them accept the trade agreement foreseen with the MERCOSUR countries, going on to state his readiness to fight against that. He also spoke of the Commission's ideas on flexibility between the first pillar (direct aid and market spending) and the second pillar (rural development). Nicholson also criticised the elements of the “greening” proposal for direct payments. The Commission is suggesting that 30% of direct aid should be subject to “greening” (farmers should adopt environmentally-friendly practice) - but Nicholson felt that this would only create more red tape.
“One year ago, we did not even know whether we would have the amounts that you have put to us”, admitted Martin Häusling (Greens/EFA/Germany). He pointed out that unofficial Commission documents suggested cuts of 30-40% in farm spending for 2014-2020. “I believe that we can be pleased with the project presented. However, these financial means say nothing about how funds will be redistributed within the agricultural sector and about the breakdown of funding between member states.” Unlike the previous speaker, he considered it constructive that there was mention of 30% of aid made subject to “greening”, saying: “That is a way to keep the amounts we have”.
The second pillar deserved to be more robust and stable, Martin Häusling said, adding: “It is intolerable for the resources of the second pillar to be used to fill out the first pillar. We need a structure that is perfectly clear.”
CAP spending freeze in current prices. Dacian Cioloº said the Commission has applied the same methods of calculation for CAP as for cohesion policy - “a nominal freeze without calculating inflation”, which, the commissioner said, corresponds to what the EP has asked for. “The Commission has taken the requests made by the EP and has applied them not only to cohesion but also to the CAP”, Cioloº said, adding: “The CAP remains the first policy financed by the Community budget.”
“Amounts for the first and second pillar will be clearly fixed for each member state in the legislative package on CAP reform” (due on October 2011), Cioloº said. There is flexibility on funding between pillars, not for member states but for the Commission when it presents its proposals on CAP reform, he explained.
Reserve for agricultural crises. Cioloº said the budget will be used with the same degree of flexibility as during Commission intervention in crisis situations (very swift mobilisation with rapid procedures when needed). This reserve is outside the total CAP budget, “which will facilitate the management of situations”, he said. The funding from this reserve that has not been used should be used for other priorities within the framework of the CAP.
Globalisation Adjustment Fund. Legislative clarification is still needed to define in greater detail under what circumstances the fund will be used in the agricultural sector. Cioloº assured Nicholson that his position on international trade agreements in agriculture has not changed and that he remains just as attentive to relevant talks, with or without the Globalisation Adjustment Fund. It is not because one has proposed this fund that one must be more flexible in trade talks, he said, adding: “Losses due to the bad negotiation of trade agreements cannot be compensated for by this fund”. The aim of the fund is to compensate farmers for losses of income due to violent price fluctuations on the international market, he said in substance.
New member states. “A little over €9 billion have been made available in current euro terms to continue to finance the phasing-in of aid for the new member states, without this affecting the direct payments of the older member states”, the commissioner said.
The main elements of the Commission's proposal for CAP 2014-2020 in constant and current prices are as follows:
First CAP pillar (direct subsidies and market measures): (1) constant prices: €43.5 billion in 2013, €281.8 billion for 2014-2020; (2) current prices: €45.3 billion in 2013, €317.2 billion for 2014-2020 (i.e. 7 x €45.3 billion).
Second pillar (rural development): (1) constant prices: €13.9 billion in 2013, €89.9 billion for 2014-2020; (2) constant prices: €14.5 billion in 2013, €101.2 billion for 2014-2020 (i.e. 7 x €14.5 billion).
Classical CAP: (1) constant prices: €57.4 billion for 2013, €371.7 billion for 2014-2020; (2) current prices: €59.8 billion in 2013, €418.4 billion for 2014-2020 (i.e. 7 x €59.8 billion).
Aid for the needy (from the European Social Fund as of 2014, but managed by DG Agriculture): (1) constant prices: €2.5 billion (2014-2020); (2) current prices: €2.8 billion (2014-2020).
Food safety: (1) constant prices: €2.2 billion (2014-2020); (2) current prices: €2.5 billion (2014-2020).
Market crisis reserve: (1) constant prices: €3.5 billion (2014-2020); (2) current prices: €3.9 billion (2014-2020).
Globalisation Adjustment Fund (new agricultural part): (1) constant prices: €2.5 billion (2014-2020); (2) current prices: €2.8 billion (2014-2020).
Research and innovation: (1) constant prices: €4.5 billion (2014-2020); (2) current prices: €5.1 billion (2014-2020).
Total (taking into account preceding five new instruments totalling €15.2 billion in constant prices and €17.1 billion in current prices): (1) current prices: €386.9 billion for 2014-2020; (2) constant prices: €435.5 billion (2014-2020). (L.C./transl.jl)