Mr President, ladies and gentlemen, the purpose of the own-initiative report on agricultural incomes is to help us review the implementation of the European agricultural model based on multifunctionality and the competitiveness of farms. Incomes are in fact the barometer of the viability of farms. Without sufficient incomes, farmers disappear and production moves away from the most fragile areas. But if farmers are eliminated and concentration accelerates, we risk moving away from the European model we advocate, which involves the presence of farmers on all territories. The analysis of incomes is therefore of obvious interest. The relevant findings for the period 1995 to 2002 are as follows. Firstly, the average agricultural income in the Europe of the 15 rose by 7% with large national variations, for example +32% in Portugal and –30% in the United Kingdom. Secondly, public support accounts for more than 50% of this figure, but its distribution is debatable. Twenty percent of farms receive 73% of aids for 59% of areas and 25% of employment. Thirdly, producer prices fell by 1.1% while consumer prices rose 11%. Fourthly, the slight improvement in this average income comes from the fact that the cake is shared between fewer and fewer farmers since the number of people working in this sector fell by 15.7% over the same period. We must therefore ask ourselves whether the phenomenon can be allowed to continue without jeopardising our European model of agriculture. This question is all the more serious because the application of multifunctionality is going to result in higher production costs even though public support is set to decline for farmers of the 15 Member States between now and 2013, chiefly because of the rise in Community support for agriculture in the ten new countries. The European Union cannot remain indifferent to this situation. We need to give some thought to the direction of future changes to the CAP to make it consistent with the two objectives of multifunctionality and competitiveness which we have set for farms. From this point of view, the market must tend to reward the act of agricultural production. As for public support, it must increasingly go to pay for the non-market services that agriculture performs for society. The most recent CAP reform includes positive steps forward in this direction, especially with the conditionality and modulation of aids. With decoupling, though, the CAP is establishing historically acquired rights that will have the effect of preventing remuneration for multifunctionality for all farms on all territories. It is therefore absolutely essential to get away from these historical rights, something that will be possible gradually if modulation is substantially increased. On the matter of market-generated income, I recommend restoring priority to pricing and market policy, taking the view that progress in product quality, necessary as it is, is only the passport giving access to those markets. Several directions will therefore have to be opened up or reaffirmed so that the market can play its part without prices collapsing and taking incomes with them. I will quote them: ‘flexible, production-based regulation of supply; the introduction of production-based safety nets; Community encouragement of sectoral policies for a better distribution of added value; our imports should be subject to the same standards as those of the Union’. From this report, Members will all understand that there is still a tremendous amount to be done if the CAP is to achieve its objectives. Our European agricultural model was legitimate in its conception. It must become so in reality again. That is why I regret the Commissioner’s absence from this debate all the more.

Political group: PSE