A4-0384/96

Resolution on the Commission study on alternative strategies for the development of relations in the field of agriculture between the EU and the associated countries with a view to future accession of these countries (Agricultural Strategy Paper) (CSE(95)0607 -C4-0023/96)

The European Parliament,

- having regard to the Commission study (CSE(95)0607 - C4-0023/96),

- having regard to the report of the Committee on Agriculture and Rural Development and the opinions of the Committee on Regional Policy and the Committee on External Economic Relations (A4-0384/96),

A. whereas, according to the decision of the European Council in Copenhagen in 1993, the associated Central and Eastern European countries (CEECs) can become members of the European Union once they satisfy certain conditions; whereas in December 1994 and July 1995 the European Councils in Essen and Cannes confirmed this decision and adopted a strategy for bringing the CEECs closer to the European Union, while emphasizing that the accession of the associated European countries will promote stability and peace on the European continent,

B. having regard to the call in Article A of the EU Treaty for 'an ever closer union among the peoples of Europe' and to the preamble to the EC Treaty 'calling upon the other peoples of Europe' to join this union,

C. whereas the 1993 Copenhagen European Council stipulated a democratic and constitutional state system with institutional stability as a crucial condition of accession, while at the same time specifying a functioning market economy capable of surviving in the internal market and self-evident readiness to assume all additional obligations of membership,

D. whereas an enlargement of EU-15 to take in ten Central and/or Eastern European countries will increase the total land area of the Union by one third, i.e. 1.1 m km2, considerable disparities at present exist in terms of economic strengths and living standards and the gross domestic product of these CEECs is currently only around 3% of the EU's economic performance,

E. whereas the agricultural area of the Union will expand after accession of the CEECs by 44% and the area of cultivable land will expand by 55%, the number of consumers will grow by 106 m to almost 500 m and agriculture plays a much greater role in the CEECs than in EU-15, this being reflected in the fact that in the Union only some 6% of the workforce is employed in agriculture, producing 2.5% of GDP, while in the ten CEECs on average 25% of the workforce is so employed and accounts for 8% of GDP,

F. mindful that, in the pre-transition era, all cultivated land - with exceptions in Poland and Slovenia - was in the hands of collective and state farms, and that the transfer to private ownership is proceeding at varying speeds unevenly and in differing forms (outright ownership, farm tenancies, limited companies, state-owned companies) and is leading to differing degrees of fragmentation of ownership and of farming structures which may delay the emergence of 'efficient units',

G. whereas the number of downstream holdings that have already reached EU standard and are certified accordingly is still low,

H. whereas in the CEECs loans for agriculture are granted only reluctantly by private sources on account of the still incomplete transformation process and uncertain profit outlook, and state assistance and programmes for credit provision have consequently been introduced, without which a general stabilization in the agricultural sector would be much delayed,

I. whereas in some CEECs agriculture still serves as an employment buffer during the restructuring of industry, which has resulted in small-scale farming and has hampered the necessary modernization of agriculture,

J. whereas the level of prices in the CEECs since the collapse of the Communist system has risen sharply, as a result of the removal of massive price support for food products, and between 30% and 60% of private household expenditure goes on food, despite the fact that prices for the majority of food products there are still well below those in the EU,

K. having regard to the export surplus in the EU's agricultural trade with the CEEC-10 to date (more than ECU 3 billion in 1994), the continuing growth in exports to those countries (an increase of 7.7% to approximately ECU 12 bn in 1994) and the efforts of the CEECs to encourage the export of agricultural products, although difficulties still persist in meeting local requirements and in identifying sufficient trading partners in the Union as a result of disruptions to production in the wake of the collapse of the Communist system; whereas these countries will in the future be able to increase their production to above self-sufficiency level by means of better technology,

L. having regard to the importance which consumers in the Union attach to high standards in the areas of food hygiene, veterinary inspection and plant protection; whereas epidemics can have ruinous consequences for producers and consumers alike,

M. whereas rural areas throughout the Union are increasingly affected by economic decline, depopulation, increased unemployment, poorer provision of services and fewer educational and vocational training facilities;

N. whereas, through their activities and their presence on the land, European farmers carry out an economic function, not least by producing goods for export, as well as a function on behalf of society, by occupying and managing the land and protecting the environment and indeed life in rural areas,

O. mindful, therefore, that in determining when a CEEC is admitted to the Union the development, structure and potential of its agricultural sector will be important criteria, but will not take priority over other criteria, and that an overall appraisal must also include the criteria laid down at the Copenhagen European Council referred to above,

P. whereas the Commission submitted to the CEECs a questionnaire covering all sectors of the economy for completion by the end of July 1996, which will enable it to draw up an opinion on accession,

Q. whereas the EU and its Member States have over the period 1990-1994 provided a total of ECU 38 745 m for the CEECs and are already today the most important financial contributor to economic modernization, with ECU 578 m having been granted to the agricultural sector under the PHARE programme,

R. having regard to the Commission's opinion that not all the objectives of the reform of the CAP have been attained and therefore, irrespective of CEEC integration, the CAP must be taken further towards consolidation of that reform, and that within the Union there must be greater emphasis on an integrated 'rural development approach', with new sources of income, whether 'alternative or supplementary' to conventional farming activity, needing to be created,

S. having regard to the Commission's opinion that simplification of agricultural policy is an objective which should be actively pursued,

T. whereas the Commission intends in the long term to develop a 'strategy towards more market orientation and competitiveness', to uncouple market policy and income support and reduce the gap between the internal price level and world market prices and, wherever possible, to limit the adverse impact on incomes by means of accompanying measures, such as the creation of supplementary incomes by employing and remunerating farmers as 'ecological service providers' and by developing renewable raw materials and biomass,

U. whereas the Commission intends to place the preservation of rural areas and the 'multifunctional' role of the farmer at the forefront of its approach based on further development,

V. whereas a review of the Structural Funds, which run out in 1999, is imminent, coinciding with the start of the revision of the GATT agreements which, after a period of truce, expire in 2003 at the latest; whereas, furthermore, the financing arrangements of the European Union have been settled only until 1999,

W. whereas, after integration of the CEECs, average GDP will fall and hence the number of EU-15 regions still eligible for Objective 1 status (less than 75% of average EU GDP) will diminish,

X. whereas the Commission has still not put forward any specific proposals as to how the reorientation of the common agricultural policy (which is correct in principle) is to be translated into practice, and cooperation between the Commission and Parliament on this major issue will suffer in the absence of anything other than general declarations of intent,

Basis for integration of CEECs

1. Takes the view that only after a successful remodelling of the European Union and a strengthening of its political and a broadening of its democratic foundations, in line with the objective of the Intergovernmental Conference, can the agreed and meaningful integration of the CEECs be a success for both sides;

2. Points out that the situation as regards agriculture in the various CEECs is not homogeneous and therefore warrants a differentiated, prudent and cautious approach in the course of the enlargement negotiations; thus, when establishing the pre-accession measures and periods and the post-accession transitional measures and periods, account must be taken of the specific situation of each associated country;

EU enlargement and the common agricultural policy

3. Takes the view that within the next few years a series of developments will have a significant impact on agriculture and that the CAP must take them into account; these are the anticipated rise in demand backed by purchasing power for agricultural products on the world market, the demands made on agriculture by modern industrial societies as regards the quality of products and environmentally benign farming, the inauguration of the next round of WTO trade negotiations and the new financial framework of the EU budget to be adopted from 1999;

4. Emphasizes that, as a prerequisite for any changes to the CAP, a rigorous assessment must be carried out of the consequences of implementation of the 1992 CAP reform and the reforms of the COMs of the unreformed sectors must be completed, in accordance with the guiding principles of 1992 and the decisions reached at the 1993 Jumbo Council, with due account being taken of the specific characteristics of the various sectors and the economic challenges which they face and the fact that any simplification process must not involve a renationalization of the CAP intervention and support machinery;

5. Takes the view that, before the end of the specific negotiations with the applicant countries of Central Europe, the broad outlines of the adjustment of the CAP must be established so that these states can decide on accession in the light of information about the future of agricultural policy;

6. Emphasizes that the option of developing the CAP in accordance with the model 'developing the 1992 approach' should be more carefully assessed, taking due account of the different agricultural and climatic situations in the EU and the CEECs and on the basis of the original guiding principles of the 1992 CAP reform; the statement made in 'Option 3: developing the 1992 approach' regarding the changes to be made to the current CAP is therefore clearly inadequate, since such changes must not lead to new problems and crises for Community farmers and European rural areas;

7. Considers it essential that the applicant countries should share with the European Union the same vision of Europe and its objectives, and be aware that they are committing themselves to a genuine common agricultural policy;

8. Calls for a continuation of regional policy and cohesion policy in the poorest regions focused on geographical and thematic considerations, for the amount of support provided in the individual regions to be dependent on the capacity and willingness of the Member State concerned to provide co- financing, and for solidarity with disadvantaged regions in the more prosperous Member States also to remain a matter of course;

9. Urges that enlargement should not call into question the current level of support to agriculture permitted by the Uruguay Round Agreement and should not have an adverse impact on the competitiveness of European agriculture;

10. Believes furthermore, that the consequences for the CAP of the accession of the CEECs cannot be analyzed without taking into account the impact of the establishment of a free-trade area with the Maghreb and Mercosur countries;

11. Notes that the 1992 reform of the CAP has scored a major success with the reduction of surplus production and the stabilization of agricultural yields, but at the same time has stifled the personal initiative of farmers with a proliferation of rules and regulations;

12. Draws attention to the fact that the deluge of legislation is growing, imposing a massive amount of paperwork on farmers which must be counted as an additional cost factor in the business;

13. Urges, therefore, that the accession of the CEECs should not weaken the common agricultural policy, but that the CAP should continue to enable European agriculture:

- to preserve its very essence, namely the structure of family holdings and harmonious occupation of the land by farmers,

- to continue to carry out its essential role in the economy and rural life,

- to retain the role appropriate to it on the world market, and

- to contribute to the further development of the Union;

14. Considers, moreover, that it is essential to study the impact of the new accessions on the CAP well in advance of actual enlargement;

15. Takes the view that, in order to allow various integration strategies to be adopted, it is essential to carry out more detailed studies and separate, individual quantitative analyses of the regional and global economic impact and the social impact of the process of integrating the various CECs, both in the EU and in each of these countries; it is therefore vital to hold a broad debate on enlargement involving a wide range of participants, in particular the social partners and organizations representing farmers in the various Member States;

16. Urges, in this connection, that all the final consequences of the implementation of the Uruguay Round agreements and of the free trade agreements should be examined and quantified;

17. Notes that, in the long term, demand for foodstuffs on the world market is expected to rise, which calls for a change in the Union's agricultural policy such that its farmers can become active operators on a growing world market with greater purchasing power;

EU agricultural policy and subsidiarity

18. Urges that EU agricultural policy should be implemented in accordance with the principle of subsidiarity and that the principles underlying the common agricultural policy, namely financial solidarity, Community preference and the unity of the market, must be retained;

19. Urges that a more detailed study be carried out to ascertain to what extent the implementation of certain elements of EU agricultural policy, such as policy on subsidies to promote specific landscape features and natural assets, can be organized at regional level in accordance with the principle of subsidiarity; rejects, however, the idea of renationalizing prices and incomes policy, as this would distort competition within the Union;

20. Urges that EU agricultural policy should be regionalized extensively at the implementation stage in accordance with the principles of subsidiarity and cohesion and that the bodies of the European Union should in future define only the politically and economically binding framework which the Member States are then required to fill out and account for to the relevant EU bodies;

Codecision for the European Parliament

21. Urges that the European Parliament must also be granted the full right of codecision in connection with the common agricultural policy;

Policy on rural areas

22. Emphasizes that the necessary revision of the Structural Funds and the CAP should take greater account of the fact that social, economic and environmental problems generally have a variety of causes and touch on highly diverse policy areas such as social, economic, agricultural, regional, environmental and transport policy, and that this is particularly so where rural areas taken as a whole are concerned;

23. Takes the view that EU agricultural policy must in future be geared to an even greater extent to reconciling the needs of quality food production as a means of securing a livelihood with the preservation of the economic and ecological functions of agricultural land, thereby contributing to the long- term viability of rural areas, and points out that under the prevailing conditions of agricultural and food production it is possible only to a very limited extent to offset additional costs arising from environmental protection requirements and ecologically necessary curtailment of production through higher market prices;

24. Considers that the increased gearing of the EU's agricultural policy to the respective regions and their specific characters should make it possible to continue and guarantee the production of high-quality food products, with corresponding processing and marketing, which will safeguard jobs, by promoting regional markets on which consumers are prepared to reward producers for the special social and ecological quality of these foodstuffs;

Sustainable husbandry

25. Considers that only sustainable husbandry can satisfy the above requirements in rural areas, and that sustainability cannot be reduced to environmental compatibility in the narrower sense, which confines itself simply to the consequences for soil, water and air;

26. Emphasizes that this requires a comprehensive approach and beyond the actual production sector must take in social, cultural and ethical aspects; points out that sustainable farming tends to be extensive in terms of energy and resources and that the aim of sustainable husbandry is to conserve and develop the basic essentials for life and economic activity, thereby necessarily securing the prospects of future generations;

Additional income from ecological services and environmentally safe energy production

27. Calls for the services provided by farmers in the sphere of the environment and conservancy to be properly remunerated as practical services provided by the farmer, so as to cover the cost, taking account of special regional situations;

28. Points out that as a result the farmer will in future work not only as a food producer but also as a 'provider of ecological services', and that this role will hence equate fully to the duties of 'providers of social services' in society;

29. Demands, however, an accurate definition of the very specific tasks which are to be performed in the relevant region by an agricultural sector focused on responsibility, sustainability and environmental conservation, since the justification for paying for such work as 'ecological service providers' will be accepted by public opinion only where remuneration is provided for specific tasks which members of the public can judge for themselves;

30. Stresses, however, that the preservation and development of the cultivated landscape are performed by farming as such, and that any severing of the link between production of food and management of the landscape should therefore be avoided;

31. Emphasizes that jobs will continue to be lost in traditional agricultural production proper, calls for alternative employment to be fostered in order to maintain and even increase the number of jobs in rural areas, regards the diversification of sources of income in farming, such as biomass production, the use of abandoned farm buildings for other purposes and the various forms of direct marketing, as an opportunity to preserve jobs in farming, but stresses that, in addition to this, jobs must also be created outside farming in order to ensure labour market stability in rural areas and that modern information technology and good communications make it increasingly possible for the countryside to be a good living environment and at the same time a place of employment;

Quality policy and labelling of foodstuffs

32. Calls on the Commission to develop a policy (for example a European quality seal) which makes it possible to communicate clearly to the consumer the environmental and ecological efforts made by farmers and enable consumers to check on these;

33. Calls for food production as a whole to be tailored more closely than hitherto to a high level of quality, a comprehensive proof of origin system, particularly where food of animal origin is concerned, seamless quality and origin control, proper animal husbandry and sustainable management of cultivated land, and for foodstuffs to be clearly labelled accordingly, as these issues have become increasingly important to consumers;

34. Calls for a start to be made on an ecological farming reform, in order to rule out the need for the cultivation, use and export of renewable raw materials to be subsidized from tax revenue in the long term; calls also for more rigorous application of the law on animal welfare, both on the farm and during transport, to prevent cruel transport conditions;

World trade

35. Takes the view that future GATT negotiations should be concerned not only with mutual reductions of tariffs and the removal of barriers to trade, but also with environmental legislation, the principle of sustainable farming and certain social evils which lead to unfair competition;

36. Points out that the growing demand for foodstuffs on the world market represents a major opportunity to be taken up in order to safeguard their share of the Union's product market;

Basis for accession to the EU

37. Urges that the future Member States should from the outset be seen as 'partners' and should be kept fully apprized of the reforms pending in the Union so that they can for their part adapt to changing circumstances and make adjustments to their standards where necessary;

38. Acknowledges that talks so far at the middle ranking and lower levels have been numerous and successful, but criticizes the fact that the 'structured dialogue' at government level seldom goes beyond the exchange of pleasantries, even though the discussion of specific difficulties which arise precisely during the pre-accession phase is essential at the highest level as well, in order to remove uncertainties and avoid disappointment; considers that it is also essential to facilitate and increase contacts between the administrations and professional organizations of the applicant countries and the EU Member States, which will play a decisive role in the preparation and success of integration;

39. Stresses that the Commission must as soon as possible put forward specific ideas for a reformed regional policy and common agricultural policy, and that the CEECs must at an early date be familiarized with the above principles of a new regional policy, particularly 'rural policy' and 'sustainability';

40. Emphasizes that an enlarged Union must also have a common agricultural policy into which the respective national agricultural policies are integrated and that joint financing must therefore be retained, as must also supervision by EU institutions of the expenditure;

41. Calls for the agricultural sector in the applicant countries to be evaluated jointly with all other sectors in accordance with the catalogue of criteria presented in Copenhagen, at the same time taking due account of the fact that purely formal adoption of the necessary standards is not enough, but that instead reliable and lasting penetration of those standards to all levels is necessary;

42. Takes the view that the CECs are less in need of high prices or compensatory payments for their farmers than of assistance geared to restructuring, modernizing and diversifying their production capacity in the agricultural sector and towards an improvement in their rural infrastructure in both upstream and downstream sectors;

43. Calls on the Commission, therefore, to encourage the introduction in the CECs of an agricultural policy aimed at preventing any rise in domestic food prices which is incompatible with household incomes, while at the same time ensuring that it does not cause massive job losses in this sector;

44. Acknowledges, finally, that a prerequisite for the broadening of social and environmental strategies is a set of rules guaranteeing appropriate minimum cost prices which ensure that goods imported into the EU are marketed at the EU price level and prevent social and environmental dumping;

Costs of integrating the CEECs

45. Warns against presenting any more forecasts based on the outdated assumption that the existing system of the Structural Funds and the common agricultural policy will be extended without prior reform to the new Member States, and calls on the Commission to submit as soon as possible cost estimates taking into account the development of markets and of the common agricultural policy and the main procedures for allocating resources from the Structural Funds;

46. Emphasizes that all cost estimates of integration should also take into account the costs and problems which would arise in many areas from non- integration;

47. Calls, in view of the economic and social sensitivity of the farming sector, for all decisions in this area, in particular in connection with enlargement, to be based on prior clarification of the framework of the future financial perspective;

48. Takes the view that farmers in the CEECs can organize the production and marketing of their products to a greater extent on a cooperative basis, in order to be able to represent their economic interests more effectively in dealings with the wholesale trade, and for this reason the competitiveness of the downstream economic sectors can also be enhanced, for example, with knock-on financing for such production and marketing improvements also being provided in the form of investment subsidies and interest rebates through the appropriate European institutions;

EU standards in the veterinary, plant protection and foodstuffs sectors

49. Urges that in the forthcoming equivalence negotiations between EU-15 and the CEECs absolutely firm EU standards are laid down in the areas of food hygiene, veterinary inspections and plant protection and fully enforced, since the protection of consumers and producers from diseases of all kinds is of crucial importance and shortcomings in food hygiene and veterinary inspections and standards can lead to the loss of markets on a massive scale that threatens livelihoods; considers it vital to avoid nullifying the results of the considerable efforts made by Community producers over a period of decades, which have resulted in their attaining high veterinary and health standards;

50. Advocates that EU health standards should be laid down as a guideline for the CEECs, so as to enable these countries, with financial support from the Union, to make prompt headway in establishing and implementing effectively their inspection arrangements at the European Union's new eastern frontier;

Employment and expansion of agricultural production

51. Notes that, in view of the present often high figures for those employed in agriculture by comparison with the Community, the CEECs need in the long term to provide additional alternative jobs for the workforce which, as in EU-15, will in the long run be unable to stay in gainful employment in agriculture on account of continuing structural change;

52. Emphasizes that experience with migration within the Union from poorer to wealthier Member States shows that a population movement of some 3% must be expected and, since the prosperity gap between the CEECs and even the poorer Member States in EU-15 is still a wide one, the search for jobs may trigger a migration of at least 6 million workers, although the continuing unemployment in the EU makes it impossible at the present time to absorb such a large amount of additional labour;

53. Takes the view that, given the problems with the transformation of the economy, a recovery in agricultural production at least to the level before the collapse of the Communist system will take many more years and any attempt to raise the price level for agricultural products, which is still much lower in the CEECs, through direct or indirect aid from the Union may be economically damaging, socially unacceptable and politically destabilizing as long as private households are still spending between 30% and 60% of their disposable income on food and inflation rates continue at between 10% and 30% and even higher;

More aid from the EU during the pre-accession phase

54. Urges that, during the pre-accession phase, financial assistance for the CEECs must be stepped up and extra funding provided, for example to develop a credit facility system, to set up border and import control facilities along the Union's future new eastern frontiers, and stresses that, while foreign capital and foreign firms are both desirable and indispensable, the establishment of their own structures by, for example, regional producer and processing associations, e.g. in the meat and milk processing sectors, is necessary in order to avoid subsequent dependency;

55. Takes the view that this EU financial aid must as a matter of priority be provided in both upstream and downstream sectors to restructure, modernize and diversify agricultural production capacity in the CEECs, to improve rural infrastructure, for additional programmes to promote integrated rural development and for environmental programmes, and that assistance for the initial and further training of appropriate specialists must be stepped up;

56. Takes the view that, given the current price situation in the CEECs and the justification for compensatory payments in the Union, it is not advisable to apply these compensatory payments to the CEECs, but, nevertheless, calls on the Commission to quantify, in precise financial terms, the third reform option referred to in the Agricultural Strategy paper, as requested by Parliament's Budgets Committee at its hearing in May 1996;

57. Urges that aid from the Union during the pre-accession phase should be coordinated, however, by creating a specific instrument modelled on the Integrated Mediterranean Programmes (IMPs), and should in addition provide for the expansion or enhancement of existing EU programmes and mechanisms (e.g. trans-European networks);

58. Points out that in the review of the existing Structural Funds, which is due before 31 December 1999, this CEEC aid programme can be integrated into the existing Structural Fund scenario and could be funded either through reallocation of expenditure or through utilization of the room for manoeuvre within the own resources ceilings;

59. Emphasizes, however, that financial assistance cannot be made available during the pre-accession phase to consolidate inefficient structures which, after integration of the CEECs, can in no way face up to the competitive pressure from other undertakings in the Union, and that the principles by which farmers in the CEECs can be subsidized at this stage must be guided by the principles of a new common agricultural policy as outlined above, where the main focus is on 'sustainability' and the promotion of 'rural areas';

60. Acknowledges the importance of the agricultural markets in the CEECs and the substantial differences between them and agriculture in the EU, chiefly as regards prices and the percentage of household disposable incomes accounted for by foodstuffs, and urges that, in the pre-accession period, appropriate measures be taken to ensure that the pressures to harmonize with the single market do not result in serious distortions of agricultural markets in the East, whether in terms of prices or the structure of land ownership and employment;

61. Takes the view that there is an urgent need for measures to expand and improve veterinary and plant-health facilities and equipment and aid to promote the harmonization of monitoring techniques and legislation, and supports preservation measures to prevent soil erosion and its environmental degeneration;

62. Notes that the pre-accession measures presented by the Commission include proposals in addition to the current agreements, the impact of which on the various agricultural markets and regions has been neither studied nor quantified; for that reason, the proposal to authorize the CEECs to transfer among themselves any unused quotas provided for under the current agreements seems sensible;

Timetable for accession of the CEECs

63. Notes that, in view of the still very different state of preparedness of the CEECs at the present time and of the integration guidelines agreed in Copenhagen and Madrid, the accession of the CEECs will necessarily take place in staggered groups;

64. Calls on the Commission and Council to report regularly to Parliament during the pre-accession phase - at least annually - on the progress of negotiations with the individual CEECs, with the first such report to be submitted after evaluation of the questionnaires forwarded to the CEECs;

65. States that it will follow the negotiations with the CEECs closely, use all opportunities for open discussion with the CEECs on a partnership basis and, during the final phase of the consultations, decide on its own responsibility in what way, in which groups and according to what time-scale integration is to take place;

66. Instructs its President to forward this resolution to the European Council, the Commission, the governments and parliaments of the Member States and the governments and parliaments of the Central and Eastern European countries.