Commissioner Phil Hogan details what the future has in store for the Common Agricultural Policy (CAP) in Europe, in an address to Plenary session of the EESC: “Future of CAP” on 20th February 2019
The Common Agricultural Policy is a policy designed to benefit all the peoples of Europe, and as the voice of organised civil society, the Economic and Social Committee will have a strong input into the next evolution of the policy.
Of course, polls show strong public support for maintaining agricultural policy at the European level, due to the clear advantages for guaranteeing food security and ensuring a level playing field within the single market. Our citizens recognise that when it comes to this area of policy, the EU adds value to their lives in a way that national policies alone could not achieve.
But it is also right and proper that the CAP evolves. After all, it accounts for a significant proportion of the European budget, and it must be critically assessed from the perspective of taxpayer value for money.
The question driving the evolution of the policy can, therefore, be condensed into the following:
“As well as adequate food supply, which additional public goods should the CAP provide in exchange for its privileged position in the EU budget?”
We at the European Commission are satisfied that our legislative proposal for the next CAP provides an ambitious and comprehensive answer to this question.
And let me say that we are very grateful to the Economic and Social Committee for their opinion adopted in October last, calling for a strong CAP with a strong budget, based on the European Model of Agriculture and Food Production; supporting an economically, socially and environmentally sustainable European agriculture policy and farming sector.
I want to pay particular tribute to Mr John Bryan for his outstanding work in drafting this opinion and guiding it through the Economic and Social Committee. As I know, John is a farmer himself, and he understands in a very personal way how important the CAP is for the viability of our farmers, our rural areas, and our precious environment.
Environment and climate
I am particularly pleased that the EESC opinion recognises and welcomes our increased environmental and climate ambition.
We strongly believe that our proposal, in particular, the new delivery model for achieving greater results, will be a game-changer for the climate agenda. As such, we are delivering on the Opinion drafted by Mr Bryan in this space.
In relation to the MFF, I have taken good note of the view outlined in your opinion.
You regard any proposals to reduce the CAP budget as unacceptable and support the view that the EU budget should be increased to 1.3% of GNI to provide adequate funding for the CAP and the new policy objectives and challenges identified.
While I am personally very supportive, I am sure you appreciate that the Commission’s final MFF proposal was made in an extremely challenging budgetary context, taking into account the loss of an important net contributor due to Brexit as well as the need to address new challenges, such as security and migration.
Within that context, we feel the Commission made a fair and reasonable proposal, maintaining a strong budget for agriculture – the amount of €365 billion for the CAP means that 96% out of every euro paid to farmers for 2014 to 2020 is protected going forward towards 2027.
This reduction is complemented with a proposal to achieve greater equity in direct payments per hectare, notably through convergence, degressivity and capping, and a redistributive payment. This means that small and medium-sized farmers would largely escape any reductions in payments.
The reduction of Rural Development programmes can be compensated by the Member States or by transfers from Pillar One.
The MFF proposal also includes €10 billion for research & innovation in food, agriculture, rural development and the bioeconomy. This is a very significant increase for agricultural research compared to today and fits perfectly with the ambition to support the modernisation of European agriculture.
I want to emphasise the importance of a swift agreement on the MFF:
- To ensure a seamless transition between the current and the new budget;
- To provide predictability and continuity of funding and;
- To ensure that EU funds start delivering results on the ground as soon as possible.
At the December European Council, European Leaders endorsed the aim of reaching a political agreement by Autumn 2019. This will be essential to pave the way for finalising the CAP negotiations and to ensure a smooth transition to the next period.
The most important point to bear in mind in relation to the MFF is that the final decision does not lie with the Commission.
The Member States, working in co-decision with the European Parliament, have full freedom to increase their overall budget contributions with a view to keeping the CAP at its current level.
CAP legislative proposal
Let me turn next to the CAP legislative proposal. We have taken note of the decision by the Agriculture Committee of the European Parliament to hold a committee vote but not a plenary vote ahead of the European elections in May.
In the meantime, I hope the ambitious programme outlined by the Romanian Presidency of the EU will be maintained. Solid progress on an agreement can and must be achieved during the summer months.
This will, of course, require the appropriate political will and ambition, and I am confident the co-legislators will take these responsibilities seriously.
I believe that farmers need certainty and stability regarding policy and budget. Our co-legislators have a responsibility to deliver for them quickly, particularly when there is so much concern about the future due to developments like Brexit.
In the meantime, we continue to make substantial progress in other areas of agri-food policy:
EU food chain
On December 19th, 2019, the co-legislators reached a political agreement on new rules to ban certain unfair trading practices in the food supply chain.
The agreed proposal was endorsed unanimously in the Special Committee on Agriculture on January 14th and by Comagri on January 23rd. The European Council endorsed the agreement and we now await a vote in the plenary of the European Parliament in March.
This is the first time that legislation has been adopted in this area at EU level and it represents a major win for European farmers who will now be better protected against unfair trading practices.
It reflects a Europe that protects and it will contribute to an environment where farmers are in a stronger position to claim their fair part of the value added in the chain. The profession of being a farmer will be more attractive for it.
I would like to thank the Committee and rapporteur Peter Schmidt for his opinion and contribution and the fruitful collaboration we had in working on this dossier.
I am confident that you will consider the final outcome to be a real step forward in relation to protecting the position of farmers in the food supply chain.
EU Agri-food trade
Trade is a political priority for the European Commission and a priority that I have strongly supported myself. I returned just this Monday from a trade mission to Singapore, Australia, New Zealand and the United Arab Emirates, and in all four of these countries, we have made substantial progress in delivering further trade benefits for our exporting agri-food companies.
In terms of economic partnership agreements, the EU has been very active in 2018 and will continue to work on new deals in 2019. The negotiations with Japan, Vietnam, Mexico and Singapore were all concluded last year.
In 2019 we hope to see substantial progress with Mercosur, and we expect to see significant progress in the discussions with Indonesia, Australia, New Zealand and Chile.
We should remember that for every €1 billion in agri-food exports, over 20,000 jobs are supported in rural areas and agri-businesses.
At the same time, the Commission is working very hard to improve and deepen its trade and investment relationship with the African continent.
Already today, the EU is the largest trade partner and importer of agri-food products from the world’s Least Developed Countries, many of them in Africa.
Commissioner Malmstrom and I negotiated the removal of trade-distorting export subsidies at the WTO in Nairobi in 2015.
I also expect to see the conclusion of Geographical Indication agreements with CARIFORUM and China.
I want to reserve a special mention for the EU-Japan agreement. This represents one of the most successful deals ever achieved in agriculture for the EU, and the biggest concession ever granted on agriculture by Japan to any trade partner.
In relation to EU agri-food exports to Japan, around 85% of tariff lines will enter duty-free over time corresponding to about 87% of current trade value.
It was a very good outcome for geographical indications – our European rural intellectual property. Wines, beef and pig meat, cheeses and processed products are all protected now in the EU-Japan agreement.
Some well-known examples include Cognac, Irish whiskey, Champagne, Feta, and Asiago cheese, to name but a few.
Wines and sparkling wines now enjoy duty-free status since the entry into force on February 1st, and already, there is great interest from Japanese buyers of food and drink products.
Africa-Europe Alliance for Investment and Jobs
I would next like to turn to another important dimension of our international agenda: our relations with Africa. The EU proposes a paradigm shift in relations between our two continents.
It is about building a true and fair partnership focussed on mutual economic interest and fully in line with Africa’s Agenda 2063 and flagship initiatives, such as the African Continental Free Trade Area. It is also about delivering on our commitments taken in Abidjan in November 2017.
Our proposed Alliance is actually all about boosting investments and creating jobs, in particular, for young Africans. As a first ambition, we want to reach 10 million jobs in the next five years.
To make real progress on this ambitious agenda, a real mobilisation of all Member States and all African partners is a pre-condition.
The Commission cannot deliver this agenda alone but will do its best to foster mobilisation and to ensure coordination of actions.
One of the concrete initiatives that can nourish this enhanced cooperation in the area of agriculture and rural development is the Task Force for Rural Africa (TFRA) launched by along with the African Union Commission.
The Task Force met throughout 2018 in Brussels and Kigali and its main recommendations for action were presented at the Africa-Europe High-Level Group in December 2018. The recommendations of the Task Force for Rural Africa will be instrumental in implementing the agricultural dimension of the new Africa-Europe Alliance.
In conclusion, ladies and gentlemen, I hope I have given you a good overview of the work we are doing to strengthen the CAP and support our farmer and rural areas.
I am grateful for your support in this mission, and I look forward to working with you in the coming months to deliver a good final outcome. Thank you.
This article is based on remarks given by Phil Hogan, Commissioner for Agriculture & Rural Development to Plenary session of the EESC: “Future of CAP” on 20th February 2019.
Commissioner for Agriculture & Rural Development
Tel: +32 2 299 96 96