# CE2004084EN.01062001.xml

| 3.4.2004 | EN | Official Journal of the European Union | CE 84/620 |
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3.4.2004

EN

Official Journal of the European Union

CE 84/620

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(2004/C 84 E/0694)

WRITTEN QUESTION E-0544/04

by Erik Meijer (GUE/NGL) to the Commission

(26 February 2004)

Subject:   CAP: intended change in the ratio between payments to large and small farms, a ceiling for aid per farm and limiting the damage caused to third countries

Subject:

| 1. | When the reforms of the Common Agricultural Policy proposed by the Commission are implemented, what impact does the Commission expect them to have on the ratio between payments to large and small farms: will it remain unaltered or will it change? What impact does the Commission intend the reforms to have in this respect? |
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1.

When the reforms of the Common Agricultural Policy proposed by the Commission are implemented, what impact does the Commission expect them to have on the ratio between payments to large and small farms: will it remain unaltered or will it change? What impact does the Commission intend the reforms to have in this respect?

| 2. | Apart from the changes which the Commission has already proposed, does it consider additional measures necessary to prevent further emigration from rural to urban areas, which would ultimately cut agricultural production for the EU's internal market? |
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2.

Apart from the changes which the Commission has already proposed, does it consider additional measures necessary to prevent further emigration from rural to urban areas, which would ultimately cut agricultural production for the EU's internal market?

| 3. | Will the Commission work towards a subsidy model which safeguards the interests of small farmers better than at present, for example by setting a limit — e.g. EUR 30 000 — for financial aid to a single farm? |
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3.

Will the Commission work towards a subsidy model which safeguards the interests of small farmers better than at present, for example by setting a limit — e.g. EUR 30 000 — for financial aid to a single farm?

| 4. | When weighing up the shape which the reform of the CAP should ultimately take, will the Commission also bear in mind the impact on small farmers in other parts of the world, particularly their uncertainty regarding the supply of food and industrial raw materials for the internal market in the Third World due to market-distorting, relatively cheap imports of farm surpluses from EU Member States? |
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4.

When weighing up the shape which the reform of the CAP should ultimately take, will the Commission also bear in mind the impact on small farmers in other parts of the world, particularly their uncertainty regarding the supply of food and industrial raw materials for the internal market in the Third World due to market-distorting, relatively cheap imports of farm surpluses from EU Member States?

Supplementary answer given by Mr Fischler on behalf of the Commission

(13 April 2004)

(13 April 2004)

| 1. | The new system of direct payments to be introduced with the Common Agricultural Policy (CAP) reform will, in principle, not change the distribution of direct support between farms since it is based on historic references. However, taking into account the introduction of direct payments in the dairy sector and the option available to Member States for a regionalisation of the Single Farm Payment, redistribution of payments between farmers, within a region, may take place. Moreover, modulation of direct payments will explicitly favour smaller farms, since the first EUR 5 000 are exempted from modulation.
  In its July 2002 Communication (1), the Commission had proposed to modulate direct payments by up to 20 %, to increase the franchise according to the number of annual worker units and to introduce a ceiling for direct payments per farm of EUR 300 000. This would have triggered a stronger redistribution effect but was not supported by a majority of Member States. |
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1.

The new system of direct payments to be introduced with the Common Agricultural Policy (CAP) reform will, in principle, not change the distribution of direct support between farms since it is based on historic references. However, taking into account the introduction of direct payments in the dairy sector and the option available to Member States for a regionalisation of the Single Farm Payment, redistribution of payments between farmers, within a region, may take place. Moreover, modulation of direct payments will explicitly favour smaller farms, since the first EUR 5 000 are exempted from modulation.

In its July 2002 Communication (1), the Commission had proposed to modulate direct payments by up to 20 %, to increase the franchise according to the number of annual worker units and to introduce a ceiling for direct payments per farm of EUR 300 000. This would have triggered a stronger redistribution effect but was not supported by a majority of Member States.

1

| 2. | An important element of CAP reform, as decided by the Council in 2003, was to reinforce the rural development policy in favour of rural areas, by shifting funding from the first to the second pillar. The more targeted support under the second pillar should certainly help those rural areas still facing a net out-migration. However, the Commission's impact assessments show that, while some further exten-sification of agricultural production is expected, no disruptive impacts on overall levels of EU production are foreseen. |
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2.

An important element of CAP reform, as decided by the Council in 2003, was to reinforce the rural development policy in favour of rural areas, by shifting funding from the first to the second pillar. The more targeted support under the second pillar should certainly help those rural areas still facing a net out-migration. However, the Commission's impact assessments show that, while some further exten-sification of agricultural production is expected, no disruptive impacts on overall levels of EU production are foreseen.

| 3. | In its July 2002 Communication, the Commission proposed a 20 % modulation of direct payments, a higher franchise and a ceiling for direct payments per farm of EUR 300 000. These provisions, and in particular the proposed ceiling, were not included into the CAP reform package. For the time being, the Commission has no intention to issue a proposal to change the direct payment scheme in this respect. |
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3.

In its July 2002 Communication, the Commission proposed a 20 % modulation of direct payments, a higher franchise and a ceiling for direct payments per farm of EUR 300 000. These provisions, and in particular the proposed ceiling, were not included into the CAP reform package. For the time being, the Commission has no intention to issue a proposal to change the direct payment scheme in this respect.

| 4. | There is no doubt that the process of reform of the CAP, begun in 1992, is beneficial for world trade and offers new opportunities for developing countries. However, the situation and problems of developing countries are different from country to country and therefore the impact of CAP reform may also differ between different developing countries. In order to particularly support the least developed countries, the EU has offered a wide range of highly preferential concessions both on trade and on the more general issues of development. Indeed, the EU is the world's largest importer of agricultural products from developing countries and the main contributor in the world for financing development and cooperation. The objectives of these interventions are to reinforce, amongst other things, infrastructure, institutions and education. In case of emergency aid the EU strictly respects the international rule for a constructive use of food aids. |
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4.

There is no doubt that the process of reform of the CAP, begun in 1992, is beneficial for world trade and offers new opportunities for developing countries. However, the situation and problems of developing countries are different from country to country and therefore the impact of CAP reform may also differ between different developing countries. In order to particularly support the least developed countries, the EU has offered a wide range of highly preferential concessions both on trade and on the more general issues of development. Indeed, the EU is the world's largest importer of agricultural products from developing countries and the main contributor in the world for financing development and cooperation. The objectives of these interventions are to reinforce, amongst other things, infrastructure, institutions and education. In case of emergency aid the EU strictly respects the international rule for a constructive use of food aids.

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(1)  COM(2002) 394 final.

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