Brussels, 26/09/2013 (Agence Europe) - European Parliament rapporteur on direct payments and rural development, Luis Capoulas Santos (S&D, Portugal) expects the reform of the common agricultural policy (CAP), as it stands after the recent agreement (see EUROPE 10929), to be passed by a very wide majority in the European Parliament. In an interview with EUROPE he sets out the measures that make the CAP greener and fairer and suggests that, if a weakness is to be found, it is in the chapter on market measures. He is concerned, for example, at the effect that ending milk quotas will have. He calls for mechanisms to protect European agricultural sectors which could be adversely affected by trade agreements between the EU and the United States and between the EU and Canada (interview conducted by Lionel Changeur).
Agence Europe: You seem pleased with the agreement on the reform but acknowledge that Parliament could have got more. In which areas?
Luis Capoulas Santos: We managed to negotiate on things where the Council didn't want to negotiate. During the Irish Presidency [January to the end of June 2013], we weren't able to discuss three or four multiannual financial framework-related points. Ireland argued that the European Council had already come to a decision and that the Agriculture Council had no mandate to negotiate. Parliament, however, took the view that not to negotiate (on co-decision issues, mark you) would be a clear breach of the Lisbon Treaty. We argued the point with the Lithuanian Presidency and warned that, if there were no negotiations, we would revert to our March position, with all the consequences that that would have for the timetable, since negotiations would have to be resumed [second reading rather than first reading agreement]. Finally the Council decided to change its stance. The changes aren't exactly what we wanted but the Council showed flexibility on issues that were important to us. The Council didn't want degressivity of aid. It accepted compulsory minimum 5% degressivity, which means that a member state could apply 100% degressivity if it wanted and put a cap of €150,000 on aid. The Council also agreed to a rise, from 75% to 85% in the co-funding rate for rural development programmes in the less developed areas.
How will the rise in the co-funding rate work?
The amounts remain the same. We have given member states which are facing budgetary problems the opportunity to reduce the size of the national contribution [it will be at least 15%]. Some countries are experiencing difficulties in putting sufficient money into the national budget to allow them to make use of Community cash.
In what ways will the CAP be greener and fairer?
The CAP will be greener because, in the first pillar [direct aid], 30% of the budget has been devoted to greening. There is also - thanks to the Parliament - a necessity to reserve 30% of credits in the second pillar [rural development] for agri-environmental and climate-change measures. Practically a third of the EU budget will go to “green” measures.
Convergence of aid between countries [known as external convergence] could have been stronger but, no matter what, an effort has been made to bring greater fairness. There are measures that will improve internal convergence [between farmers within the same country]. Degressivity, from, €150,000, “redistributive” aid for the smallest farms [which will allow a higher payment to be made for the first hectares] and internal convergence: every farmer who receives more than the national average will see a reduction in his/her aid so that those below the average receive a little more. It was agreed, too, that no farmer in Europe should receive less than 70% of the average in his/her country. There is more fairness and equity between countries and between farmers.
What will be the outcome of the plenary session vote on the reform at the end of October or start of November?
I'm absolutely certain that the political groups which supported the 26 June agreement will continue to give their support. Some smaller groups may still put down amendments. But it would be totally inconsistent for the large groups in the Parliament, such as the Socialists, the EPP, the Liberals and even the Greens, to bring forward amendments - although any group that has at least 40 members can do so. I'm sure the reform will be adopted by a very comfortable majority.
The CAP has been reformed but are there any sectors that have been forgotten, such as tobacco, fruits and vegetables or olive oil?
Criticism of the reform is focussed mainly on market measures. This is because, in Europe, liberal ideology is very strong. Thus, the majority in the Council, in the Commission and in the Parliament is in favour of cutting market measures. As a Socialist, I'm not happy because I believe that some instruments should be retained at a time when price volatility and market uncertainty are still apparent. An effort was made, however, to retain certain measures for the sectors under greatest threat. But it will not be possible to change the agreement to get improvements. It must be remembered, too, that up to 12% of each country's aid can still be coupled [that is, linked to production] aid. Tobacco, for example, is not among the products that are eligible for coupled aid, however. That's because this sector has been demonised.
The debate over milk has been opened. Would you like to see regulatory mechanisms take over from quotas in 2015?
The milk sector is the one that benefits least from the reform. Some countries want to keep a system not dissimilar to quotas, while the liberal countries believe that the market should be left to regulate itself. The most competitive areas, with the lowest production costs, will survive. The others, in mountainous areas, or in the outermost regions or in areas which face other natural difficulties, will struggle. I argued for the retention of quotas but I lost the battle as a majority [in the Council and the Parliament] backs an end to quotas. Ending quotas will pose serious problems in those regions where milk production is an important factor in maintaining the rural population.
Are you worried about the impact of the trade agreements being negotiated by the EU with the United States and with Canada?
Globalisation is inevitable. .The smartest thing to do is to confront problems, not to avoid them. Sooner or later we will have a trade agreement with the United States. What has to be done is to determine the transition mechanisms to ensure that the sectors which have no chance of standing up to the competition do not disappear from one day to the next.
Are you, perhaps, thinking about the meat and milk sectors?
Yes. The door should only be opened gradually, as we have done for the EU market, but with rules, precautions and stages to ensure that the huge market operates well, with conditions that are fair for economic operators. (transl.fl)