# EUR-Lex - 52007IP0101 - EN

Important legal notice

*|*

# 52007IP0101

**European Parliament resolution of 29 March 2007 on the integration of the new Member States into the CAP (2006/2042(INI)) **

*
Official Journal 027 E , 31/01/2008 P. 0240 - 0247 *

P6_TA(2007)0101

The integration of new Member States in the CAP

European Parliament resolution of 29 March 2007 on the integration of the new Member States into the CAP (2006/2042(INI))

The European Parliament,

- having regard to Article 33 of the Treaty establishing the European Community,

- having regard to Council Regulation (EC) No 1268/1999 of 21 June 1999 on Community support for pre-accession measures for agriculture and rural development in the applicant countries of central and eastern Europe in the pre-accession period [1],

- having regard to the Act concerning the conditions of accession of the Czech Republic, the Republic of Estonia, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of Poland, the Republic of Slovenia and the Slovak Republic and the adjustment to the Treaties on which the European Union is founded [2],

- having regard to Council Regulation (EC) No 1782/2003 of 29 September 2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers [3],

- having regard to Council Decision 2004/281/EC of the Council of 22 March 2004 adapting the Act concerning the conditions of accession of the Czech Republic, the Republic of Estonia, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of Poland, the Republic of Slovenia and the Slovak Republic and the adjustment to the Treaties on which the European Union is founded, following the reform of the common agricultural policy [4],

- having regard to Council Regulation (EC) No 864/2004 of 29 April 2004 amending Regulation (EC) No 1782/2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers, and adapting it by reason of the accession of the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia to the European Union [5],

- having regard to Council Regulation (EC) No 1290/2005 of 21 June 2005 on the financing of the common agricultural policy [6],

- having regard to Council Regulation (EC) No 1698/2005 of 20 September 2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) [7],

- having regard to Council Regulation (EC) No 318/2006 of 20 February 2006 on the common organisation of the markets in the sugar sector [8],

- having regard to the Interinstitutional Agreement of 17 May 2006 between the European Parliament, the Council and the Commission on budgetary discipline and sound financial management [9],

- having regard to Council Regulation (EC) No 2012/2006 of 19 December 2006 amending and correcting Regulation (EC) No 1782/2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers and amending Regulation (EC) No 1698/2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) [10],

- having regard to Rule 45 of its Rules of Procedure,

- having regard to the report of the Committee on Agriculture and Rural Development (A6-0037/2007),

A. whereas the 2004 enlargement increased substantially the agricultural area (by around 27 %), the number of farms (by around 60 %), and the number of agricultural workers (by around 57 %) in the EU, thereby boosting its production potential and making agriculture more important; whereas higher yields per hectare of food and feed production will release sufficient areas of land for biomass production and this situation has contributed to a further differentiation of the European agricultural and rural fabric; whereas this process has become more marked and has deepened with the accession of Bulgaria and Romania,

B. whereas agriculture in the majority of the new Member States differs significantly from agriculture in the EU-15 in terms of production levels and structures and the size of farms, and is characterised by lower levels of efficiency, technological development and vertical and horizontal integration than in the old Member States,

C. whereas agriculture plays a greater economic and social role in the majority of the new Member States than in the EU-15, as the sector's contribution to the gross national income and the proportion of employees working in the sector are above the EU average,

D. whereas in certain new Member States subsistence and semi-subsistence agriculture are of social, cultural and environmental importance,

E. whereas the new Member States have been successfully and smoothly integrated into the internal market, contributing to a significant increase of the European agricultural and food trade; whereas the new Member States duly introduced and enforced veterinary, phytosanitary, food safety, common market organisation and other horizontal rules, so that it was not necessary to apply any specific safeguard measures,

F. whereas the new Member States had to shoulder high social and economic costs in order to adapt to and integrate the common agricultural policy (CAP) rules and to adapt to the competitive environment in the EU; whereas the pre-accession funds only partially covered the costs of the adaptation and integration process before the accession; whereas the accession to the EU revealed the general economic and competitiveness problems of the new Member States; whereas the CAP has failed to contribute to solving these problems entirely,

G. whereas the CAP triggered considerable development and significant changes in the agriculture of the new Member States, and whereas some problems and tensions have arisen mainly due to the fact that the CAP rules do not support sufficiently the development of a balanced, sustainable agricultural sector, especially as far as animal husbandry, horticulture and up- and downstream integrations are concerned,

H. whereas the Act of Accession introduced a long phasing-in (nine years), with a low starting level (25 % of the level applicable in the EU) for the direct payments in the new Member States, though internal market and budgetary contribution rules fully apply to them; whereas cost and income levels in the new Member States do not justify this degree of differentiation, which results in unequal conditions for the new Member States' farmers in terms of competition,

I. whereas the problems which should be tackled in the new Member States are, primarily, those requiring structural changes to strengthen competitiveness; whereas CAP measures supporting incomes and guaranteeing prices significantly contributed to such strengthening,

J. whereas the Commission and the Council have been late or reluctant in understanding the new Member States' special problems and offering the necessary help (for example problems on the fruit and vegetables market, especially as regards soft fruits, cherries and apples, the unjustified ban on Polish exports by Russia and Ukraine, the modification and proposed abolition of maize intervention rules, honey imports from third countries),

K. whereas the clear shortage of producer-owners in the food-processing industry in the new Member States and abuse of the dominant position of distribution chains seriously limit the competitiveness of the farmers and their possibilities for cooperation and integration,

L. whereas 8 out of 10 new Member States chose the single area payment scheme (SAPS) for the direct payments,

M. whereas the Community budgetary assistance necessary for rural development in the new Member States was significantly higher than the available budgetary allocations for the 2004-2006 period, and at the same time implementation rules of the rural development programmes limited the dynamic utilisation of Community allocations; whereas those factors have considerably narrowed the impact of the CAP second pillar in the new Member States, and may persist also during the new financial framework,

Smooth integration, win-win situation

1. Welcomes the fact that the agricultural and food sector of the new Member States has been integrated thoroughly and smoothly into the common market of the European Union;

2. Stresses that, although the 2004 enlargement caused disturbances on the agricultural and food markets of certain new Member States, it contributed significantly to the development of well-established market relations in the 25 Member States as a whole;

3. Points out that the agriculture and food sector in both the new and old Member States benefited at least partially from the enlargement — stakeholders in the new Member States benefited from the higher level of agricultural support and from the increase of trade possibilities, while the food-processing industry and international trade in the old Member States progressed, and there was a higher level of investment and a rise in turnover in the retail sector, in particular in the run-up to enlargement;

4. Considers that overall the integration of the new Member States has been successful but that the situation is not always clear cut, as not all farms have seen their incomes rise; points out that the increase in purchase prices and in subsidies were partially offset by the significant rises in production costs (for example rises in the cost of fuel, energy, fertiliser, plant protection products and machinery);

5. Stresses the fact that enlargement has not increased the risk level as regards food safety and animal and plant health, and notes in this respect that the standards and efficiency of the work of the competent authorities in the new Member States are above the EU average in certain aspects;

6. Observes that the 2004 enlargement has not imposed an unbearable burden on the CAP budget and has not demanded significant changes as far as the EU budget is concerned but that decisions on freezing the market and direct payment budget and the 2007-2013 financial framework require a sacrifice based on the principle of solidarity from the EU-15 from 2007 onwards; also notes that, further to the European Council's decisions of December 2005, EU-15 producers suffered further cutbacks because of the accession of Bulgaria and Romania, over and above the decisions to implement policies, such as voluntary modulation, to strengthen the second pillar;

7. Laments the fact that higher quotas were not allocated for either the 2004 or 2007 enlargement, if only at the level initially planned;

Application of the CAP in the new Member States

8. Notes that the considerable differences between the agricultural sectors of the new Member States result in differences in the impact of the application of the CAP and in the scope and vigour of the challenges the new Member States are facing;

9. Notes that Community rules were not adequately adapted to the new conditions in certain markets (e.g. the markets in soft fruit and in starch) following the enlargement of the EU by 10 countries in 2004;

10. Notes that adaptation to the conditions and rules of the internal market and the application of the CAP — especially concerning veterinary, phytosanitary, food safety, common market organisation and other horizontal rules — have resulted in considerable efforts being required from farmers and administrations in the new Member States;

11. Considers that over a period of several months the Commission failed to attach adequate importance to the ban on the export of Polish agricultural products to Ukraine and Russia or to take effective action to bring it to an end;

12. Notes that, although EU-financed pre-accession programmes contributed to the preparation for the application of the CAP and twinning programmes proved to be useful, the original goals were only partly achieved and the efficiency of the Community measures was limited;

13. Recalls that the Special Accession Programme for Agriculture and Rural Development (Sapard) started with a considerable delay and the scope was also limited, mainly owing to the complicated requirements and lack of due-time decisions of the Commission and of authorities of the new Member States;

14. Observes that certain new Member States face considerable difficulties in implementing the Community rural development programmes due to the complexity of their rules and the administrative burden of their management;

15. Reiterates that, as direct payments play a substantial role in the development and adaptation of the agricultural sector of the new Member States, their low level in the first years of the phasing-in period not only hindered the necessary adaptation but created unequal conditions for competition on the internal market as well, which many operators were economically unable to cope with;

16. Stresses the important role of the rural development programmes both in establishing a new, marketoriented approach for farms — e.g. in processing and marketing their own products or in tourism — and in creating alternative sources of income for those who abandon basic agricultural production for economic reasons;

17. Notes that the different levels of the direct payments between the EU-10 and EU-15 have not ensured a level playing field, thus in several new Member States the producers lost ground even on their domestic markets, a situation to which, primarily, competition resulting from an increase in imports and exports from third countries due to the changed customs regime also contributed;

18. Notes that the Commission's reservations towards the new Member States with regard to the alleged surplus of stock on the day of accession to the EU and its threats to impose large financial penalties were unjustified in most cases and based on erroneous calculations; further notes that no disruption of the balance was observed on any of the agricultural markets that could have been the result of this alleged supply surplus;

19. Emphasises that the new Member States were forced to apply complementary national direct payments (CNDP, "top-ups"), which can be considered as a form of cofinancing and a quasi-renationalisation of Community direct payments, and that this led to serious political and economic difficulties in various new Member States as they imposed a serious burden on the national budgets and limited the possibility of applying state aid schemes;

20. Points out that, due to budgetary constraints, contrary to the general objectives and principles of the CAP and contrary to the modulation in the EU-15, the majority of the new Member States were forced to regroup a part of their Community rural development allocations for CNDP purposes, as allowed by the Act of Accession;

21. Refers to the opinion of some new Member States that fully decoupled, area-based payments do not contribute entirely to the balanced development and sustainability of their agriculture, and that sector preferences and/or optional coupled payments could be necessary at least temporarily in certain Member States until 2013, and should be considered if requested; refers to the successful practice of the fully or partially coupled CNDP and temporary state aid measures in this respect;

22. Observes that the majority of new Member States would like to continue the application of the single area payment scheme (SAPS) as long as possible, since the switch to the Single Payment Scheme (SPS) means extremely high administrative and technical burdens and the SAPS is completely compatible with a future policy of decoupled payments;

23. Considers that it is necessary to implement cross-compliance rules and requirements concerning sound agricultural practices and environmental conditions both in the new and the old Member States; proposes to introduce the cross-compliance rules gradually, with full implementation by the end of the phasing-in period; also proposes that the new Member States be given the option of postponing the application of the cross-compliance rules until the end of the phasing-in of the direct payments; proposes further that the requirements concerning good agricultural and environmental conditions remain in force at least during the SAPS period as the majority of the new Member States may have difficulties in achieving conformity with the complex and costly cross-compliance rules;

24. Welcomes the fact that the Council has adopted the Commission's proposal on the extension of the SAPS until the end of 2010 and on the involvement of new Member States in the energy crop aid scheme;

25. Calls on the Commission, in the context of simplifying and rationalising the implementation of the CAP, the direct payment schemes and the rural development programmes, to take account of the problems faced primarily by the new Member States and to propose appropriate solutions without departing from the implementing rules for the CAP;

26. Stresses that the Commission should take the special problems and concerns of the new Member States more into account in its decisions within the framework of the CAP;

27. Expresses its serious concern regarding the Commission's recent proposal to completely abolish the intervention system in respect of maize from 2007; notes that the way the proposal was presented is contrary to the fundamental principles of the EU given the timing, the lack of a proper evaluation — especially as regards implications for the common organisation of the market in cereals and the area-based direct payments — and the lack of alternatives or transitional periods; is of the opinion that premature abolition of the maize intervention system would probably have serious consequences;

28. Believes that, in the spirit of the 2003 CAP reform, the introduction of area payments for soft fruit produced for processing should be considered along with the possibility of making them conditional on compulsory membership of food-processing groups or producers' organisations and the requirement to sell products under commercial contracts, which could contribute to increasing competitiveness in the soft fruit sector and improving the situation for growers in Member States, in particular Poland;

29. Considers that further changes are necessary in the agricultural production and rural fabric of the new Member States and emphasises that CAP rules and Community aid have to assist this procedure; stresses that it is crucial to effect these necessary changes in a cushioned way, as the agriculture-bound rural society and economy of the new Member States could not tolerate too rapid and drastic changes in their production and employment structure;

Future of the CAP in the enlarged EU

30. Points out that the present CAP is unsuitable to manage a substantial part of agricultural and agriculture-related problems in the enlarged EU; considers that the decoupling of the direct payments, forced by the World Trade Organisation (WTO), increases in general the market orientation of European agriculture but that decoupled direct payments do not contribute fully to the establishment of a sustainable agricultural sector and rural society, either in the new Member States or in a considerable part of the EU-15; points out that either additional measures or tailor-made application of the direct payments are necessary;

31. Takes the view that, especially in Member States and regions where specialised farms play a decisive role in the agriculture, the present system of direct payments promotes arable cropping too significantly, does not assist properly the establishment of sustainable animal husbandry and does not promote and facilitate the necessary structural changes;

32. Notes that, in the case of some new Member States, in some sectors, the allocated quota levels led to the freezing or even decline of agricultural production, and that the fact that decoupled payments were linked to the lower level of quotas constituted a further subsidies disadvantage for the new Member States, in addition to the phasing-in; also notes that the problem occurs also in some of the old Member States;

33. Believes that the achievement of the CAP objectives is also hindered in the new Member States by the insufficient level of rural development financing, by the lack of an efficient risk and crisis management system and by excessively strict Community rules on state aid;

34. Stresses that the CAP must be kept on the Community level in the framework of a reformed CAP and any renationalisation of the CAP should be avoided; stresses, however, that specific measures based on the principle of subsidiarity have to be applied; takes the view that it is necessary to revise the scope, objectives, goals, and principles of the CAP, including the European agricultural model, taking into consideration the objectives and needs of agriculture, rural areas, farmers, consumers and the entire society in the enlarged EU of 27 countries in order to determine the necessary financial resources and ensure their proper, equitable and fully justified allocation;

35. Emphasises that all possible factors (e.g. consequences of earlier financial decisions, CAP reforms, experiences of the new Member States, the diversity and variety of European agriculture) have to be duly taken into consideration in the future reform of the CAP, particularly during the CAP "health check" and the mid-term review of the 2007-2013 financial framework in 2008-2009;

36. Stresses further that it is imperative to avoid decisions forced only by attempts to reduce the level of Community funding or maintain the financial status quo among Member States;

37. Considers that biomass and bioenergy production will play a strategic role in the future of the agricultural sector in the EU; calls in this respect for appropriate EU funding to promote the production of biomass on land no longer required for growing food and feed; recalls in this respect the high capacities of the new Member States, and the increased overall production potential of the enlarged EU;

38. Underlines that fulfilment of the specific needs of the Member States and regions, including problems and difficulties in the new Member States, should be maintained on the basis of subsidiarity with the following, tailor-made instruments:

(a) introduction of a revised system of direct payments, including the introduction of new measures such as voluntary recoupling options, to be used only by those Member States which consider this necessary to meet social, employment and sustainability objectives; extension of the payments to new sectors and new beneficiaries (for example soft fruits destined for processing), within the revised system of national financial envelopes and full Community financing,

(b) introduction of additional, optional, regional or temporary market measures with Community financing,

(c) application of the national envelope system from the EU budget in the sectors to be reformed (wine, fruit and vegetables),

(d) improved support to producer organisations, strong encouragement for them and repeal of national legislation which hampers them,

(e) promoting cross-border cooperation between producer organisations,

(f) introduction of an efficient agricultural crisis and risk management system with Community financial assistance, paid from the national envelopes,

(g) strengthening the internal market with common quality standards, marketing, competition, food safety, environmental and animal welfare rules,

(h) reinforcement of the rural development system and its funding,

(i) increase of the flexibility of the state aid rules (e.g. widening the scope of block exemptions and increase of the "de minimis" level);

39. Considers that WTO compatibility has to be ensured during the Doha Round negotiations as part of the EU offer on reducing trade barriers or in exchange for agreeing with the maintenance of internal support levels of the other WTO members;

40. Stresses that additional customs duties imposed under the special safeguard clause (SSG) could be a useful means of protecting sensitive sectors of the Community market, including those in the new Member States, from surplus imports or from imports at excessively low prices; calls on the Commission to negotiate in the current WTO round the possibility of making appropriate changes to the scope of the SSG in the EU's list of concessions; points out that some of the new Member States had the opportunity to apply the SSG in sensitive agricultural sectors not on the EU's current list of concessions;

41. Expects that the future CAP will not only take into consideration the needs of the enlarged EU but that it will also become easier to manage, that it will reduce the administrative burden of farmers and national authorities and will support the market-oriented, environmentally sound production of safe products, while ensuring the future of sustainable agriculture;

42. Invites the Commission, the Member States and all stakeholders to conduct a lively discussion and submit forward-looking proposals in order to build a sustainable future of the agriculture in the enlarged EU;

43. Welcomes the Commission's intention to draw up a long-term vision of the future of the CAP after 2013 that: would allow it to benefit from the exceptional opportunity for expansion presented by the forecast that growth in global agri-food trade will be twice as fast as total expected growth in world trade over the coming three decades; would seek to ensure that agriculture development is uniform throughout the EU; and, through the combined efforts of the EU-15 and the new Member States, would enable agriculture to fulfil its role in terms of production and other activities;

*

- *

44. Instructs its President to forward this resolution to the Council and Commission, and to the parliaments and governments of the Member States.

[1] OJ L 161, 26.6.1999, p. 87.

[2] OJ L 236, 23.9.2003, p. 33.

[3] OJ L 270, 21.10.2003, p. 1. Regulation as last amended by Regulation (EC) No 2013/2006 (OJ L 384, 29.12.2006, p. 13).

[4] OJ L 93, 30.3.2004, p. 1.

[5] OJ L 161, 30.4.2004, p. 48.

[6] OJ L 209, 11.8.2005, p. 1. Regulation as last amended by Regulation (EC) No 320/2006 (OJ L 58, 28.2.2006, p. 42).

[7] OJ L 277, 21.10.2005, p. 1. Regulation as last amended by Regulation (EC) No 2012/2006 (OJ L 384, 29.12.2006, p. 8).

[8] OJ L 58, 28.2.2006, p. 1. Regulation as last amended by Commission Regulation (EC) No 247/2007 (OJ L 69, 9.3.2007, p. 3).

[9] OJ C 139, 14.6.2006, p. 1.

[10] OJ L 384, 29.12.2006, p. 8.

--------------------------------------------------