WRITTEN QUESTION E-1509/02

by Rosa Miguélez Ramos (PSE) to the Commission

(29 May 2002)

Subject: Evolution of agricultural income in 2001

The Commission has published data compiled by Eurostat on the evolution of agricultural income, which state that in 2001 agricultural income in the EC rose by 3,3 %, thanks to a 1,2 % rise in production and a 2 % fall in the number of farmers.

Nonetheless, there are variations between Member States in the pattern of agricultural incomes. In Spain income rose by only 2,6 %, while in other Member States the increase was four times greater. The figures for Denmark, Austria and Germany were 12,3 %, 10,9 % and 9,9 % respectively. Portugal and Ireland scored 11,8 % and 7,8 % respectively.

Can the Commission provide specific information on the evolution of agricultural income in Galicia in 2001?

What is the Commission's interpretation of the fact that the application of the CAP gives rise to these disparities in the evolution of agricultural income? What does the Commission believe to be the reasons for the circumstance that the rise in incomes has been four times greater in certain Member States (Denmark, Austria, Portugal and Germany) than in Spain?

Answer given by Mr Fischler on behalf of the Commission

(26 June 2002)

According to Eurostat, the income from agricultural activity, measured as the net value added at factor cost, in real terms and per labour unit, would have increased by 3,3 % on average in 2001 in the Community as a whole. This increase in income would constitute a renewed sign of recovery after the falls recorded in 1998 and 1999 and the 3,3 % increase in 2000. Notwithstanding the sanitary crises observed in the animal sector in 2001 (linked to the bovine spongiform encephalopathy (BSE) and the Food and Mouth disease (FMD)), favourable price developments notably in the animal sector have enabled to lift agricultural income to record levels.

If positive developments are forecast in a clear majority of Member States since only one Member State is foreseen to record a fall in income (Luxembourg at 0,6 %), wide variations are projected across countries. Strongest rises would be recorded in Denmark (+ 12,3 %), Portugal (+ 11,8 %), Austria (+ 10,9 %), Germany (+ 9,9 %), Ireland (+ 7,8 %), Belgium (+ 5,3 %) and Sweden (+ 5,0 %). If the rise in pig prices constitutes the common factor in the growth of agricultural income in most of these Member States, price increases in other farm sectors, such as potatoes and milk, and a surge in non-crop specific subsidies are also estimated to have contributed favourably to the development of agricultural income.

The Commission has no information concerning farm income development in 2001 in Galicia.

The reforms of the Common Agricultural Policy in 1992 and in the Agenda 2000 have contributed to the improvement in the competitiveness of the agricultural sector in the Community by shifting from market price support to more direct income payments. They have also contributed to provide a greater guarantee and stability in the evolution of producer's income since direct payments to producers represent now on average in the Community some 32 % of agricultural income. However, divergences in income development across Member States and sub-sectors still exist. They mainly reflect the differing situations at the outset carried over from previous years and the diversity in the agro-economic structures and cycles in the Member States.

Accordingly, if Spain benefited, like other Member States, from positive developments in the pig and poultry sectors that outweighed the sharp drop in beef prices, unfavourable climatic conditions affected crop productions, notably cereals and wine whose production volumes fell by more than 30 % and 23 % respectively. Nevertheless, it should be reminded that Spain still shows the second largest increase in agricultural income in the Community since 1992 (behind Portugal), with a rise of more than 41 % after taking account of inflation.