Brussels, 15/01/2003 (Agence Europe) - Just one week from the presentation by the Commission, on 22 January, of the new moulding of the CAP reform project, Franz Fischler presented, on Wednesday, two Commission studies and four "external" studies concerning the impact of reform proposed last July. Recognising the limits of such studies due to the time allowed, the impossibility of updating models and the various approaches adopted, the European Commissioner responsible for agriculture and fisheries affirmed, in substance, that their results validate the general guidelines of the reform proposed. Such results show that decoupling aid from production would lead not to giving up production, but to continuing in this field to adjustments where they are needed the most. The studies also show that reform envisaged would above all improve market balances. In other words, taxpayers' money would no longer be spent to finance enormous food surpluses that cannot be sold. Modulation consisting of reducing direct payments and allocating larger sums to rural development would hardly have an impact on the markets. The most important result of the simulations is that there would be a positive effect on overall farm income. The main impact of decoupling would be seen in the beef sector, with minor impact in the arable crop sector. This is due to the fact that the current system is already decoupled to a certain extent, meaning that adjustments in production would be limited, Mr Fischler said.
Speaking before the press, the Commissioner felt the assessment made clearly shows that doing away with the link between payments and production will encourage farmers to use their land where it is profitable to do so. He put the question: "If farmers see better ways of farming, why should Brussels prevent them from taking their chance? Why should Brussels force farmers to produce at a loss? The motto of our mid-term review (MTR) is: 'Let the farmer decide what and how much to produce obviously always in a sustainable way!' The studies clearly show that doom-mongers who have claimed that our reforms would make British roast beef disappear or the Irish beef industry shut down have got it wrong". Mr Fischler also pointed out "our proposal to simplify the present premium system and to free producers from the direct link between number of animals and payments would result in a 3% decline of beef production. But, at the same time, there would be a 7% price increase offsetting the drop in production. Hence, the market revenue of beef producers would increase by 4% and this is what counts". Speaking of modulation, which provokes criticism because it would entail unfortunate consequences for farm revenue, the Commissioner said "they've got it wrong again. According to the studies, the full impact of the mid-term review (MTR) is positive with respect to farm income, increasing it by 1.7%".
The studies were published whereas the Commission is preparing to adopt, next Wednesday, a draft reform that is somewhat sweetened to be in accordance with the mandate of the European Council in Brussels last October and the EU membership of ten new Member States. Thus, the "revisited" project would above all provide for reduction of direct aid to agriculture by 1% annually, to be accumulated from 2007, that is, a total reduction of 6% in 2012. The original project provided for cumulative annual reduction of direct aid of 3% as of 2005, resulting in a 20% reduction by 2012.
(Studies made public on Wednesday may be consulted on the website of DG Agriculture at the Commission: http: //europa.eu.int/comm/agriculture/publi/reports/mtrimpact/index_en.htm).