WRITTEN QUESTION E-0703/96 by André Laignel (PSE) to the Council (27 March 1996)

Subject: Upper limits for compensation aid under the common agricultural policy

Last year, the income of some producers of arable crops increased substantially as a result of extremely good economic conditions, which did not call into question the level of compensation aid under the 1992 reform since such aid is not actually classed as deficiency payments. Over-compensation has occurred as a result.

This situation has, moreover, been accentuated by a series of changes - often called simplifications - under the reform, such as the 1993 increase in withdrawal compensation, the right to grow crops intended for the agro-food industry on set-aside land, and single rates for set-aside. The result is that a small category of wealthy producers, often based in the rich regions of Europe, receive the bulk of European subsidies and grow disproportionately, devitalizing the countryside by intensive farming which does not respect the environment or the requirements of regional planning.

This is, naturally, incomprehensible to the vast majority of low-income farmers in the Union and to those who are concerned by the fact that Europe is not more generous to other sectors such as the meat, fruit and vegetables and wine sectors, whose reform is long overdue and which are more exposed to external competition exacerbated by a proliferation of free trade agreements.

This unequal distribution of aid is becoming politically unacceptable for all citizens, taxpayers and consumers of the Union, who are somewhat unenthusiastic at present about the idea of Europe but who might support it more if aid for agriculture were more fairly distributed so that it could meet its objectives and benefit all concerned.

Awareness of aid which can reach colossal sums is, finally, intolerable in the eyes of those excluded from national and European solidarity.

In this context, does the Council plan, in the very short term and preferably during the debate on prices, and in accordance with the adoption of the resolution on 15 February 1996 (B4-0137/96) on the prospects for the CAP, to set upper limits for direct aid per holding or to begin a system of deficiency payments, since the year ahead seems once again to be favourable for those who, last year and in the past, have benefited far more than others from solidarity.

Reply (16 July 1996)

Reducing disparities in farm incomes is one of the objectives of the reform of the common agricultural policy (CAP) initiated in 1992. CAP reform is chiefly characterized by a switch from a policy based on price support for agricultural products when they reach the marktet to a policy based on area payments. This new approach has two major advantages which the Council regards as of particular importance: firstly, it provides less of an incentive to intensive production, and secondly - precisely because compensatory payments are not directly linked to production and thus benefit the least productive holdings more - it takes account of the social problems facing farming in certain rural areas by helping to reduce the income gap between the different producers.

As part of the reform the Council adopted specific provisions to assist small producers and also took steps to reward farmers who undertake to manage their land in an environmentally-friendly way and subscribe to the requirements of the area plans drawn up to that end by the Member States.

The reform process is already under way in several sectors, including arable crops, tobacco, rice and beef and veal, and the Council is currently considering Commission proposals on fruit and vegetables and wine.

The Council has received no proposals for capping direct aid to individual farms or for the introduction of a system of deficiency payments.

As for the 'colossal' sums in certain sections of the Community's farm budget, the current crisis in the beef and veal sector, where major solidarity measures have already been initiated, demonstrates the interdependence that exists among farmers, who all at some stage need to be able to fall back on the resources of the agricultural budget.