Opinion of the Committee of the Regions on the 'Report from the European Commission on "Young farmers and the problem of succession in European agriculture"` (97/C 215/06)

THE COMMITTEE OF THE REGIONS,

having regard to the European Commission report on 'Young farmers and the problem of succession in European agriculture` (COM(96) 398 final);

having regard to the decision taken by the European Commission on 5 September 1996, under the first paragraph of Article 198c of the Treaty establishing the European Community, to consult the Committee of the Regions on the matter;

having regard to its decision on 18 July 1995 to direct Commission 2 for Spatial Planning, Agriculture, Hunting, Fisheries, Forestry, Marine Environment and Upland Areas to draw up the relevant opinion;

having regard to the draft opinion (CdR 457/96 rev.) adopted by Commission 2 on 12 February 1997 (rapporteurs: Mrs Haijanen and Mr Lafay),

unanimously adopted the following opinion at its 17th plenary session on 12 and 13 March 1997 (meeting of 13 March).

1. Introduction

1.1. The COR notes that the ageing of the farming community and the rural population in general poses a serious threat to the balanced development of rural areas throughout the European Union. The ageing demographic profile threatens to undermine the development of sound regional infrastructure and is a factor contributing to the rural exodus and desertification of the countryside. The subject of the Commission Report is of vital importance for the future of the whole of Europe and for European identity. More than just the future of a single sector is at stake; all economic activities in the countryside are affected. Young farmers are crucial for the continuation of agriculture and for rural policy in the EU.

1.2. According to the Commission report, which is based on 1989/91 figures, some 55 % of farm owners are over 55 and there are many farms where no successor is to be found in the family. The figures are seven years old and do not therefore cover the three new Member States. The COR deplores the fact that an up-do-date quantitative and qualitative study of the current position of young farmers is not available.

1.3. Without a dynamic strategy for the rejuvenation of the rural community, serious social and infrastructure problems will be encountered in the countryside. Depressed farm incomes, production controls and uncertainty about the future due to the Common Agricultural Policy (CAP) discourage young people from becoming farmers. In some Member States attention needs to be paid to improving the position of women in the countryside.

1.4. The CAP has a key role to play in addressing all these issues. It should be used to support every holding with a view to making it economically viable, on the basis of private enterprise and family ownership. This approach is also supported by young farmers.

1.5. Existing Union measures provide Member States with some scope for tackling the problems of young farmers. However, Member States must make more determined efforts to solve these problems whilst making better allowance at local level for the needs of young entrants to the sector. Local considerations and respect for the subsidiarity principle are at the heart of efforts to revitalize the countryside. But at the same time the policies applied must be flexible and respond to local and regional needs.

1.6. The requirements of agricultural policy, including those related to fair competition, must be respected. However, Member States should be allowed some leeway in planning and implementing specific measures. In addition, it must be ensured in the long run that European agriculture retains its belief in the future.

1.7. Difficulties are also caused by the diversity of statistical data on conditions in the countryside and the fact that these data quickly become outdated, thus reducing their reliability. The availability of new, up-to-date data would enable the Commission to make a more accurate assessment of the situation and thus make it easier to draw the right conclusions. The COR believes that Member States and the Commission, in particular, should take steps to improve the quality of their statistical data.

2. Current situation in agriculture and the difficulties and needs of young farmers

2.1. According to the Commission Report, less than 10 % of farmers are under 35 years of age and the average age of farmers rose further in the survey period 1979/1980-1989/1990, on the basis of 1989/1990 figures. The age structure of the farming community also affects social relations in rural areas: contacts with peers are lacking and only a few farmers are from non-rural backgrounds. This makes it difficult to establish social organizations and forge stronger links with town dwellers. Young farmers themselves consider it important to have their own associations and channels for exerting influence.

2.2. The Commission Report notes that the average area of farms managed by young people exceeds the average for older age groups, which makes for more efficient use of factors of production. However, there are large differences between young farmers in the European Union as regards financial conditions. Young farmers often incur heavy financial costs in connection with succession.

2.3. The numbers employed in agriculture and forestry have fallen sharply. This has contributed to desertification of the countryside, lack of suitable labour and alteration of infrastructure, particularly as regards services. Given the generally difficult employment situation prevailing in the Union, it is of the utmost importance to safeguard existing jobs and create new jobs in the countryside.

2.4. The difficulties faced by young farmers are due, in general, to the new socio-economic situation and the uncertainty attached to agriculture. Young farmers have to contend with rural desertification and decay caused by the impoverishment of the economic and social fabric and deterioration in the level of services.

2.5. Farmers also encounter various social problems, including the erosion of their cultural identity, a sense of powerlessness and exclusion and the poor public image of farming. Another problem area relates to the poor position of women in agriculture.

2.6. Setting up in agriculture makes heavy demands on finance, including the cost of buying the farm and paying compensation to coheirs. The prospect of major financial commitments makes farming less attractive to would-be entrants and poses a threat to the continued development of the farm after the transfer of ownership. An important role may also be played by the tax burdens associated with the handover of agricultural holdings.

3. Current Community measures

3.1. Objective 5a measures

3.1.1. Setting-up and investment aid

3.1.1.1. The COR supports the Community scheme whereby setting-up aid and supplementary investment aid are granted to young farmers in the start-up stage, also where mergers are involved, and advocates that Member States use these measures more intensively.

3.1.2. Vocational training for young farmers

3.1.2.1. The COR considers that training has a major role to play in helping young farmers to acquire the skills needed to adapt to constantly changing production conditions. The EU should encourage Member States to organize equivalent training for young farmers throughout the Union. Similarly, the EU should encourage Member States to make use of the aid facility based on Regulation (EEC) No 2328/91 () on improving the efficiency of agricultural structures.

3.1.2.2. The COR also feels that it is important to extend the scope of training to encompass other sections of the rural community as this would contribute to the creation of effective and broadly-based organizations in the countryside. In addition to covering all aspects of agricultural production, training should focus on business management, including financial management, marketing, communication and social skills. Moreover, environmental issues, ecology, and protection of the landscape and cultural heritage should also be included in the training programme.

3.2. Accompanying measures to the CAP reform

3.2.1. Early retirement scheme

3.2.1.1. The COR supports the Community early retirement scheme, which offers a good way to rejuvenate the farming community, but regrets that the scheme is not applied more widely in Member States. The COR thinks that the scheme should primarily favour the transfer of farms to young farmers who undertake to use new or improved forms of cultivation. In addition, Member States should be encouraged to apply the scheme more widely.

3.2.1.2. Some flexibility should be allowed at local and regional level as regards the interpretation of the obligation to farm the land full-time. It is important from the point of view of safeguarding jobs and services in rural areas to ensure that the early retirement scheme provides farmers who leave the land with opportunities to go on living in the countryside.

3.2.2. Other accompanying measures

3.2.2.1. The COR notes with satisfaction that young farmers are highly motivated with regard to the other accompanying measures, concerning e.g. multiple jobholding and methods of production compatible with environmental protection and preservation of green spaces.

3.2.2.2. In this connection, the COR endorses the conclusions of the Cork Conference, according to which policies should promote rural development which sustains the quality and amenity of Europe's rural landscapes (natural resources, biodiversity and cultural identity). Such policies help to maintain the vitality of the countryside.

3.2.2.3. The Commission should seek to sustain the higher motivation and level of education of young farmers by arranging further training, guidance and counselling.

3.2.2.4. The Commission should take account of the fact that young farmers are more motivated and better educated in regard to e.g. the management of the environment. Measures addressing environmental protection and conservation of traditional landscapes should be targeted so as to offer a potential source of additional income for young farmers.

3.3. Rural development policy in the context of regional programmes

3.3.1. Objectives 1 and 6

3.3.1.1. The COR hopes that some of the measures and programmes in areas covered by Objectives 1 and 6 will be targeted specifically at young farmers. In the view of the COR, the Commission should continue to encourage regions to pay attention when drawing up programmes to the position of young people in the countryside. This applies particularly to the less developed regions, where the input of new ideas from the younger generation can help to raise living standards.

3.3.1.2. The COR takes the view that information on successful programmes in Objectives 1 and 6 areas, together with appropriate training, should be made available to all young farmers operating under similar conditions.

3.3.2. Objective 5b

3.3.2.1. The COR draws attention to the most important aspect of programmes operated in Objective 5b areas, namely job creation. The COR considers that the wide range of economic activities carried on by young people in the countryside in all sectors of the economy is a potentially rich source of jobs.

3.3.2.2. Programmes targeted at young farmers will help to ensure the preservation of a lasting infrastructure in the countryside. A dynamic and diversified rural economy is the best way to ensure the implementation of the rural development programmes adopted by the EU.

3.3.3. Leader

3.3.3.1. The COR strongly supports the use of the Leader Community initiative as an adjunct to the Objective programmes.

3.3.3.2. In the view of the COR, Leader projects could be implemented more effectively if they were more closely tailored to Structural Fund objectives.

3.3.3.3. The Leader programme calls for the establishment of local action groups. This could help improve coordination between Leader and other local development schemes and ensure that the Structural Funds are used in accordance with the subsidiarity principle.

3.3.3.4. The COR notes with satisfaction the large number of Leader projects in Objectives 1 and 5b areas. The projects have created a development momentum in the countryside and thus established an environment which is more favourable to young people, in particular. The Leader projects also help to promote job creation in the countryside.

3.3.3.5. The COR asks the Commission to provide information on how young farmers can make use of the Leader programme, including the opportunities and funding available for initiatives from young farmers.

3.4. Market organizations

3.4.1. The COR notes the main aims of the CAP reform as concerns the control of production, namely improving the balance between supply and demand and maintaining the level of farm incomes. Common market organizations which boost farm incomes have a direct impact on young people's interest in agriculture and their willingness to take up farming.

3.4.2. Member States are authorized to establish national reserves of production rights. The COR would like to see them make use of this facility and allocate production rights in order to encourage young farmers to set up.

3.5. Other Community measures

3.5.1. Community training programmes

3.5.1.1. The COR notes with satisfaction that the Community has established several training programmes.

3.5.1.2. The COR hopes that the Commission will improve the dissemination of information on the programmes to relevant target groups. In this regard, the COR calls for a more active role on the part of local authorities responsible for the administration of the programmes, in compliance with the subsidiarity principle.

3.5.1.3. Training is particularly important for young farmers who are starting up, and is a requirement for obtaining setting-up and investment aid. The COR refers here to the vocational training assistance available to young farmers under Regulation (EEC) No 2328/91.

3.5.2. Community research activities

3.5.2.1. In the view of the COR, research carried out at local and regional level as part of an overall programme can provide useful information on the problems of agriculture and rural areas. The COR feels that the new Community research programme is good as far as its content and coverage are concerned and will provide young farmers, among others, with new information on regional development work, new technology, new working methods etc.

3.5.2.2. The COR calls on the Commission to carry out a closer analysis of the situation of young people setting up in farming on the basis of new statistical data. The COR takes the view that the Commission should give a better account of the contents and results of the young farmers' programme.

3.5.3. Information

3.5.3.1. The COR thinks that it is important to provide information on a regional basis, as this is the best way of ensuring that individuals receive all the information they need. Local farmers' associations also play an important role in the dissemination of information and there is no doubt that young people prefer using their own associations' information channels.

3.5.3.2. The COR feels that the Commission should improve the availability of information.

3.5.3.3. The COR endorses the Exchange Programme for Young Farmers and hopes that the scheme will be developed further.

4. Comments on the Commission's proposals and recommendations

4.1. Like the Commission, the COR notes that there are already several Community programmes in place. However, more attention needs to be paid in the implementation of programmes to the needs and difficulties of young farmers.

4.2. The COR notes with satisfaction that the Commission, in keeping with the subsidiarity principle, emphasizes the competence of the Member States and the regions in several areas, including those which have a bearing on young farmers.

4.3. Community measures

4.3.1. Setting-up aid

4.3.1.1. The COR deplores the fact that the number of persons receiving setting-up aid has fallen, possibly because of unduly stringent conditions for access to aid.

4.3.1.2. The COR welcomes the Council's decision to broaden the definition of full-time work to include forestry, tourist and craft activities. In the view of the COR, all activities which contribute to the diversification of agriculture should be accepted. Nowadays, traditional agricultural production must be supplemented by other activities if farms are to be profitable.

4.3.1.3. The COR feels that the only way to ensure that setting-up aid is allocated to the most deserving applicants in special cases and borderline cases is for the relevant decisions to be taken at local level.

4.3.2. Training

4.3.2.1. The COR asks the Union to improve the availability of training and ensure that equal training opportunities are provided throughout the Union.

4.3.2.2. In the view of the COR, the responsibility for taking local conditions into account and satisfying local training needs lies with local vocational training experts. It is also easier at local level to encourage young people to participate in training.

4.3.3. Early retirement scheme

4.3.3.1. The COR notes with satisfaction the Commission's desire for a debate on the early retirement scheme and its openness to new ideas on the development of the scheme.

4.3.3.2. In the view of the COR, young people must be given priority over other would-be successors in all Member States.

4.3.3.3. The increased use of the early retirement scheme will reduce the investment costs arising from transfer of farms. The scheme should also take account of the position of transferors; ideally, parents should be guaranteed the possibility to live in the vicinity of the farm after they hand over. In this way, the range of services provided in the countryside could be increased.

4.3.4. Market organizations

4.3.4.1. The COR considers that the main objectives of market organizations at Union level are balancing supply and demand and maintaining the stability of farm incomes.

4.3.4.2. The CAP and the agricultural sector will have to adapt to new realities and challenges; young farmers must be helped in the adjustment process and be given clear indicators for the future.

4.3.4.3. Member States should see to it that reserves of production rights are used at local level to encourage young farmers to set up.

4.3.4.4. The COR feels that young farmers just starting up should be on an equal footing with other farmers as regards the allocation of production rights. The allocation of these rights should help to establish viable farms.

5. Conclusions

To summarize its opinion on young farmers and the problem of succession in agriculture, the COR:

a) urges Member States to make more effective use of the EU measures already in place;

b) endorses the reforms and improvements for the benefit of young farmers outlined in the Commission report, and looks forward to concrete measures;

c) recognizes that the measures which the Commission proposes Member States should take are very much in keeping with the subsidiarity principle in that they take local and regional considerations into account. The COR warmly endorses the application of the subsidiarity principle and considers that this is undoubtedly the right approach;

d) calls on the Commission to take urgent steps to update basic data collected on conditions in the countryside and to carry out, without delay, a quantitative and qualitative study of the position of young farmers in the EU;

e) urges the Commission to improve the early retirement scheme for older farmers with a view to facilitating the transfer of ownership to young farmers. When considering the diversification of agricultural activity, the role played by retired farmers after the transfer of ownership should also be examined;

f) proposes that other economic activities should be accepted as being related to farming so as to promote the diversification of farm production. Ancillary farming activities carried on by young farmers should definitely be included in working time when determining eligibility for aid. In addition, as the proportion of part-time farming continues to rise, there is a case for including it henceforth in aid arrangements (investment and set-up grants). Farming should remain the main activity. Such arrangements would take due account of regional circumstances;

g) calls for financial aid decisions under the various structural policy programmes, as well as Member States' own aid decisions, to be taken as close as possible to local authorities and in cooperation with young farmers;

h) wishes to point out that as its role is to examine the local consequences of EU policies, it feels directly concerned by the problems encountered by young farmers setting up in different parts of the European Union and would like to be actively involved in drawing up EU policy for such farmers;

i) urges the Commission to plan ways of publicizing agriculture as an occupation and to endeavour, in partnership with local and regional experts, to make the countryside more attractive to business;

j) thinks that training is of vital importance for young farmers in today's changing production conditions. Training should take account of economic and social considerations and should also be targeted at young people without a farming background;

k) supports the idea of introducing tax incentives for young people setting up in farming in all Member States. Consideration should also be given to easing the burden of other setting-up costs, e.g. by phasing payments, so as to enable successors to invest in the development of farms;

l) hopes that Member States will give young farmers preference in the allocation of production rights. The COR calls upon the Commission to give thought to the need to ensure that there is a future for farms currently suffering from limited production possibilities because of restrictions imposed by the CAP, especially with regard to the increase in the milk quota and production rights for suckler cows and sheepmeat/goatmeat production. There is no point in creating instruments for the transfer of farm ownership to young farmers if the future viability of the farming venture itself is pushed into the background during discussions;

m) calls for an improvement in the provision of information to young people on the opportunities to acquire a farm, obtain setting-up and investment aid etc. In the view of the COR, the provision of comprehensive and transparent information will significantly improve the public image of the countryside and make agriculture more attractive as a potential occupation for young people;

n) would like to see the Commission work in close cooperation with young farmers' organizations in addressing issues concerning young farmers;

o) hopes that Member States will establish bodies charged with the task of helping to implement the measures relating to setting up in agriculture. These bodies would assist young farmers during the first 4-5 years of the start-up phase;

p) notes that this report is a major contribution to the debate on the future of the European countryside suggested in the conclusions of the Cork conference, and that the report reflects the priority which the EU now accords to sustainable development. The concrete proposals it contains will ensure the continuity of the CAP, a key element of which is the setting-up of young farmers. Such measures will help to secure a more tangible and positive Union.

Brussels, 13 March 1997.

The Chairman of the Committee of the Regions

Pasqual MARAGALL i MIRA

() OJ No L 218, 6. 8. 1991, p. 1.