WRITTEN QUESTION E-2059/02

by Charles Tannock (PPE-DE) to the Commission

(11 July 2002)

Subject: CAP reform prior to enlargement

The Commission has recently brought forward an interesting and radical series of proposals designed to address some of the most serious flaws associated with the Common Agricultural Policy (CAP), including fraud, overproduction and the consequences for both animal welfare and food safety of overindustrialised farming. The Commission appears also to have embraced the philosophy of moving away from direct support payments towards a wider system of subsidy designed to protect rural communities and to win public support for those communities over the longer term. There remains the issue of disproportionate net contributions by particular Member States and, in particular, Germany, the UK and the Netherlands, which are set to increase dramatically if no reforms are agreed before enlargement takes place. The British, German, Dutch and Swedish governments have all recently called for serious reform, with Chancellor Schröder reported as showing particular impatience over the issue.

What is the current total cost of the Common Agricultural Policy? If there are no reforms to the Common Agricultural Policy and ten candidate countries (excluding Bulgaria and Romania) accede in 2004 on the basis of the Commission's proposed ten-year sliding scale of payments to candidate countries starting at 25 % of those paid to farmers in existing Member States, what will be the total cost of the CAP for each of the years from 2004 until the payments to candidate countries reach 100 %, (assuming that Bulgaria and Romania join sometime between 2008 and 2010), and at the end of that period what will be the approximate net budgetary contributions of Germany, the UK, the Netherlands, Austria, Finland, Italy and Sweden?

Does the Commission believe that an unreformed CAP prior to enlargement is economically or politically realistic, and what consequences does the Commission foresee if no agreement is reached between the existing Member States before enlargement? In particular, does the Commission believe that taxpayers in the major contributing states will be prepared to foot the bill for an unreformed CAP after 2006, or at best that there will be any agreement to agree to anything other than a year-on-year (rather than a five or six year) financial package if reform is unforthcoming? Is the Commission concerned at the possibility of growing anti-European feeling in certain Member States if the inequities and wastefulness of the CAP are not addressed? Finally, aside from restructuring or scaling back the CAP, has the Commission given thought to the idea of an equalising budgetary rebate mechanism linked to GNP and population which would ensure that any additional budgetary contributions would be financed on an equitable basis between all Member States?

Answer given by Mr Fischler on behalf of the Commission

(24 September 2002)

The Berlin European Council (24 and 25 March 1999) decided that the Common Agricultural Policy (CAP) should be implemented within a financial framework of on average EUR 40,5 billion per year excluding rural development and veterinary measures in constant 1999 prices. These perspectives foresee a ceiling for agriculture (markets and rural development) of EUR 41,66 billion in 2006 for the 15 Member States.

In its recent Communication on the Mid-Term Review, the Commission examined the actual and prospective development of agricultural expenditure for the period 2000-2006. The results indicate that on the basis of a continuation of present policies, there will be no overshoot of the annual average of EUR 40,5 billion. Preliminary estimates on the proposed adjustments to the CAP point at a slight saving.

The Union does not deal with the issue of introducing direct payments in its Common Positions transmitted to the negotiating countries in June 2002. However, the Commission proposals have been drafted having in mind the need for budgetary stability and foresaw agricultural expenditure for ten new Member States (including markets with phasing-in of direct payments and rural development), rising from EUR 2 048 billion in 2004 to EUR 3 933 billion in 2006. The Commission will be able to produce precise figures concerning 2007-2013 period when both decision of the Council on the negotiating position and the Union's financial perspectives for 2007-2013 will be available.

It is the view of the Commission that there should be no linkage between enlargement negotiations and the Mid-Term Review of the CAP. Moreover, in the Union's Common Positions of June 2002, the Council acknowledged that the decision on direct payments for the new Member States will be taken without prejudging the forthcoming internal discussions on Community policies. The Mid-Term Review is necessary for internal reasons, as the Honourable Member suggests, to adjust the CAP to the expectations of citizens and consumers. Such an adjustment would also facilitate the integration of the new Member States.

The overall position of contributors to the Union's budget can only be assessed within the framework of all Union policies. The appropriate time to do so will be during the discussion of the next financial perspective, when it would also be appropriate to re-examine budgetary rebate mechanisms.