Opinion of the Committee of the Regions on "The regional implications of the Common Agricultural Policy on enlargement of the EU"

(2002/C 107/02)

THE COMMITTEE OF THE REGIONS,

having regard to the decision of its Bureau on 20 September 2000, under the fifth paragraph of Article 265 of the Treaty establishing the European Community, to issue an opinion on this subject and to instruct Commission 2 (Agriculture, Rural Development and Fisheries) to undertake the preparatory work;

having regard to its opinion on pre-accession measures for agriculture - SAPARD (CdR 273/98 fin)(1);

having regard to its opinion on the CAP and eastward enlargement (CdR 239/96 fin)(2);

having regard to the draft opinion (CdR 416/2000 rev. 2) adopted by Commission 2 on 9 October 2001 (rapporteur: Mr Johansson Municipal Commissioner, Gislaved Municipal Council, S/PPE),

adopted unanimously the following opinion at its 41st plenary session on 14 and 15 November 2001 (meeting of 15 November).

Recommendations

1. The Committee of the Regions believes that agricultural policy should continue to be "common" after enlargement, in order to guarantee free movement for, and trade in, food and agricultural produce in the single market, and to ensure a level playing field for competition between the Member States. The Common Agricultural Policy is also designed to ensure a fair standard of living, and to supply consumers with healthy foodstuffs at reasonable prices. The Common Agricultural Policy should be implemented simultaneously at European, national and regional level, in full compliance with the subsidiarity principle. The areas outlined above must form a common policy which, falling within the sphere of responsibility of the EU, must comply fully with the principle of financial solidarity and economic and social cohesion introduced by the Single European Act, so as to ensure that all European farmers in similar situations are treated in the same manner.

2. The financial perspective adopted in connection with Agenda 2000 paved the way for enlargement within agreed budget parameters. However, the CoR notes that if the funds earmarked for enlargement under the agriculture budget are to suffice, the applicant countries must be phased gradually into the direct support system. If all the first wave applicant countries (Poland, Hungary, Estonia, Slovenia, the Czech Republic and Cyprus) were to join by 2006, and be immediately entitled to direct support, then the budget appropriations would not be enough. The Committee of the Regions therefore advocates gradually phasing the new members into the Community direct support system. By letting direct support levels in the applicant countries rise gradually to the normal Community level over a transitional period, any harmful effects of introducing the system too rapidly can be avoided.

3. The Committee of the Regions believes that a reform of the Common Agricultural Policy is needed, inter alia to ensure that the needs of less-favoured agricultural regions can be met. The long-term objective of a revised CAP must be to make farms more competitive. The Committee welcomes further opening of the EU to world agricultural markets beyond that which has already taken place. The Committee supports the Commission's intention to establish a multifunctional agricultural system as the future model for European agriculture in the WTO negotiations. Direct payments should be reduced in line with farm size, with the aim of increasing support for rural areas. The outermost regions and mountainous regions should be an important element of European agricultural policy, because emigration of the rural population from such regions must be prevented for ecological and economic reasons.

However, in order to promote a European agricultural model based on high-quality, safe and healthy products and on respect for the environment, and to ensure that the model responds to the demands of the European consumer, the CAP must retain support mechanisms in the form of direct aid linked to the promotion of this model. There is thus a need to modify substantially the existing support mechanisms by removing the link to production and surface area, giving priority to those farms geared most towards the European agricultural model we wish to promote and to those facing the greatest natural disadvantages when competing in the market. The new aid system must also allow the regions a degree of subsidiarity in the use of aids for the promotion of structural and environmental policies in their area. Under the new aid model, priority would be given to family-run farms.

4. Agricultural policy for the period post-2006 should be designed so as to enable agriculture and food production in competitive agricultural regions to operate in a basically deregulated market. Price setting should take place as in any other deregulated market, according to supply and demand. Market forces will thus ensure that only food for which there is a demand will be produced. The Committee of the Regions believes, however, that there is still scope in a deregulated agricultural market for paying targeted environmental subsidies to farmers in favoured agricultural areas. This should depend on the extent to which society needs special environmental measures to, for example, ensure biological diversity, a varied landscape or leisure areas. Such support should, however, be uncoupled from the production of food and agricultural produce, in order to avoid creating new regulations which hamper the deregulated market in agriculture.

5. After 2006, less favoured rural regions and rural regions which have suffered losses of income as a result of the ongoing liberalisation of the Common Agricultural Policy should also receive environmental, rural development and structural aid in the combination and scope which reflects the needs of the particular region. The CoR therefore feels that responsibility for implementing this aid should lie with the individual region or Member State, in accordance with the subsidiarity principle. The regions and Member States are best placed to understand to what extent measures are needed to develop leisure facilities, the environment, and structural and rural development. Regional implementation of these programmes must continue to be part of a common regulatory framework, and be approved by the Commission. Reform of the Common Agricultural Policy in line with the recommendations made in point 3 above must increase the scope for economic support to the less-favoured agricultural regions, in compliance with the principle of financial solidarity and economic and social cohesion.

6. The Committee of the Regions believes that the ongoing efforts to support the applicant countries are very important in ensuring that the new agricultural regions can be successfully integrated in the common agricultural market. These agricultural regions will probably need a mix of structural, rural development and environmental aid even in areas where natural conditions are conducive to agriculture. Moreover, the Committee of the Regions feels it is important for the applicant countries to be given increased support prior to accession in the form of advice about the need for land reforms, development of processing industries, slaughterhouses, etc. Not least, the Community must continue to contribute support and expertise to ensure high levels of food safety in the applicant countries, in a drive to facilitate integration.

7. The Committee of the Regions believes that the objective must be to create as few special regulations or transitional arrangements as possible in connection with enlargement. The future agricultural policy model outlined above should be able to encompass most of the special initiatives which will be required in the agricultural regions of many applicant countries. The Committee of the Regions feels that the Member States may need to be gradually phased into the Community direct support system. In principal it suggests that the applicant countries should meet the acquis communautaire in all areas. Any transitional arrangements still needed for the new members in areas such as food safety would pose constraints on the free movement of foodstuffs and agricultural products in the single market. The Committee of the Regions would therefore call on the Commission to shed light on any problems which might arise in border areas between the EU15 and new member countries as a result of such transitional arrangements.

8. The Committee of the Regions feels that there is an urgent need to simplify the regulatory framework and facilitate administration of the Common Agricultural Policy. The current system is awkward and costs both society and individual farmers time and money. The Committee of the Regions believes that the deregulation model outlined here will allow the complications and red tape associated with the current market organisation to be reduced. A trend towards less detailed provisions for the Common Agricultural Policy should also facilitate the integration of new members in the European Union. The Committee of the Regions takes a positive view of the Commission's proposed system of simplified support for smaller agricultural concerns. It would, however, be desirable to cut red-tape and simplify rules and regulations for all agricultural concerns in the future.

Brussels, 15 November 2001.

The President

of the Committee of the Regions

Jos Chabert

(1) OJ C 93, 6.4.1999, p. 1.

(2) OJ C 116, 14.4.1997, p. 39.