Brussels, 20/06/2003 (Agence Europe) - According to a report adopted by the European Commission on Thursday, despite the overall steady progress and success, there are also structural weaknesses which continue to hamper the development of Portuguese agriculture. These are the main findings by the Commission, which was asked by the European Council to present this report analysing the situation in Portuguese agriculture, following a request by Portugal at the summit of December 2002 in Copenhagen. The analysis shows that Portuguese agriculture continues to be affected by several specific difficulties. Economic output and income per labour unit, although steadily improving, remain very low, largely due to the fact that Portuguese agricultural labour is poorly equipped with land and capital and because there is serious underlying underemployment in the sector. The assessment of the Commission is that the specific nature of the problems experienced by Portuguese agriculture cannot just be traced to deeply rooted structural adjustment problems, but are also affected by the manner in which the CAP currently applies to Portugal. In global terms, the Commission expects that Portuguese agriculture would profit from the new perspectives offered by the various elements of the current CAP reform proposal.
The Commission recognises that the particular economic importance of the milk sector in the Azores, and the problems linked to the development of Azores milk production, merit specific attention and that these problems need a solution.
An important feature of Portuguese agricultural developments over the last decade has been the shift in land use from arable crop production, with very low productivity, to extensive animal rearing, based in particular on an expansion of the suckler cow herd. This movement has been supported through specific policy measures for Portugal and would appear to correspond better to the conditions in many of its Less Favoured Areas. The Commission would therefore be prepared to monitor how this positive development for Portugal may continue to be encouraged in the future.
The Commission further recommends that specific attention will need to be paid to the impact of the reform on agricultural production in Less Favoured Areas, all the more so because these areas have a considerable overlap with those of high natural value. For Portugal, this concerns, in particular, extensive suckler cow and sheep farming activities.
The report considers that economic measures, such as the Less Favoured Areas and agri-environmental programmes, may provide a crucial answer to the need to consolidate the income of Portugal's semi-subsistence holdings, while the necessary restructuring of the sector is continuing to take place. For that reason, the Commission is prepared to look favourably into the possibility of strengthening support to Portugal from the Rural Development chapter.
The Commission concludes: the critical issues for Portuguese agriculture in the coming years would therefore appear to be the need to: Re-launch and speed up structural adjustment; Support the development of a sustainable and market-oriented agriculture focused on quality; Improve the sustainability and competitiveness of rural areas.
Because of recognised structural weaknesses, Portugal benefited from tailor-made transition measures after its accession in 1986. From 1991, Portuguese prices and aids were aligned on EC levels and although the 1992 reform of the CAP was fully applied in Portugal, the country was granted some special conditions. Under the Agenda 2000 reform, Portugal benefited specifically from increases in the ceiling for durum wheat, the extended irrigated area in the cereal sector, increased ceilings in beef premia, and through having a relatively high proportion of Less-Favoured Areas (LFA). Currently the EU grants specific support for the dairy and beef sectors in the Azores in order to enable the dairy sector there to continue restructuring.