Brussels, 22/09/2006 (Agence Europe) - The informal meeting of agricultural ministers of EU Member States, focused on the future of the European Model of Agriculture, will be held from 24 to 26 September in Oulu, on the edge of the Gulf of Bothnia. Discussion will cover the deadline for a report on agricultural spending for 2008, EU budgetary reform in 2008-2009 and the quibbling over the Doha Round at the WTO. In his letter of invitation, the president of the Agriculture Council, Juha Korkeaoja, specifies that an informal meeting of the Agriculture Council has never been held in a place as far north as Oulu, the sixth largest town in Finland. Ministers, expected to arrive on 24 September, will visit a dairy farm the following day, as well as a wood production site and a distillery. The Council meeting on 26 September will be devoted to the future of the European Model of Agriculture. The Finnish Presidency calls for reflection on two questions: - 1) Is the European Model of Agriculture a relevant and valuable expression of the common values and principles underlying European agriculture? - 2) Does the present CAP - after the reforms that have been decided and implemented - adequately respond to the multi-functional expectations of society as a whole and is it sufficiently robust to respond to the future challenges, both external and internal?
In a working document, the Finnish presidency recalls that, in November 1997, at the time when the proposals of Agenda 2000 were being examined, the Agriculture Council had specified the notion of the European Model of Agriculture, and that the European Council in Luxembourg, in December 1997, had approved the model stressing the multifunctional role of agriculture. After the reforms in 2003 (uncoupling of aid in the cereals, beef and dairy sectors), 2004 (tobacco, olive oil and cotton) and 2005 (sugar), the European council in December 2005 decided to launch a complete review of the EU budget in 2008-2009 (spending, including agricultural, and resources). Also, the reform in 2003 provides for a report on the health of CAP to be made around 2008. In March this year, about ten countries presented a joint text in favour of an “ambitious, modern and competitive” CAP (EUROPE 9155). In its paper, the Presidency identifies five challenges facing tomorrow's agriculture:
Agricultural income: The Commission expects an increase of 12.8% in the EU25's agricultural income between 2004 and 2012 and even predicts 0.8% more thanks to total decoupling of farm subsidies.
Trade liberalisation: The EU has made the “strategic choice” to reform its CAP before the conclusion of WTO Doha Round talks and not to just wait for results. This choice was not sufficiently appreciated by the EU's partners at the WTO, the Presidency writes, warning: “an agreement (at the WTO) should not lead to a further reform of the Common Agricultural Policy”.
Enlargement: In addition to the integration of Romania and Bulgaria foreseen early 2007, membership talks have begun with Croatia and Turkey. Other countries, such as the former Yugoslav Republic of Macedonia, are knocking at the door of the EU. Enlargement will have an effect on the implementation of CAP and may also “exert strong pressure” on the functioning and efficiency of the Single Market as far as agri-food products are concerned. “Thus, simplification, decentralisation and respecting the principle of subsidiarity will be major issues in future”, the Presidency states, also stressing “it is crucial that the common European nature of CAP can be safeguarded”. Enlargement will inevitably also raise the question of financing the CAP after 2013.
Financial aspects: Today, the CAP and rural development expenditure represent only about 0.43% of EU GNI and account for 40% of the EU Budget compared to 65% in 1990. By 2013, they will represent 35% of this budget. In December 2005, the European Council decided that the budgetary ceiling originally intended for the EU25 should also cover additional expenditure resulting from the accession of Romania and Bulgaria to the European Union early 2007. Therefore the mechanism of financial discipline may have to be implemented and direct payments reduced accordingly in the EU15 Member States towards the end of the coming financial framework period, 2007-2013. As CAP subsidiaries are gradually reduced, rural development measures “are becoming more and more important in maintaining agricultural production and viability of the rural areas”. But, in order to guarantee sufficient funding for rural development measures, “other additional ways and means such as increased modulation and more flexible state aid regimes” need to be considered.
Completing reform: The Commission plans to extend decoupling to other sectors including wine, fruit and vegetables.
Special Agriculture Committee (SAC) experts will meet on 25 September in Oulu to examine two key dossiers: review of the energy crop regime and modification of sales denominations for veal.