EN Official Journal of the European Union CE 70/111

(2004/C 70 E/112)

WRITTEN QUESTION E-2536/03

by Ilda Figueiredo (GUE/NGL) to the Commission

(29 July 2003)

Subject: Outcome of the CAP reform compromise for Portugal

On 25 and 26 June 2003 the Agriculture Council reached a political agreement on CAP reform.

According to the figures announced by the Portuguese Minister of Agriculture, Portugal will apparently benefit from a rise in funding of about EUR 168 million a year, of which EUR 33 million will be accounted for by net transfers resulting from ‘modulation’ and the remainder by the 50 000 tonne increase in the milk quota, together with 90 000 additional production rights for beef and veal, that is to say EUR 20 million.

These figures have, however, been challenged in the media.

Can the Commission therefore say how Portugal is likely to be affected by the current CAP compromise as regards:

— the level of annual net transfers under the heading of modulation;

— the difference in terms of estimated impact between the political agreement in the Council and the initial Commission proposal as far as modulation is concerned;

— the impact of the political agreement in the Council on the beef and veal sector in Portugal, bearing in mind that there has been no take-up whatsoever of the earlier programme to convert arable land into livestock units?

Answer given by Mr Fischler on behalf of the Commission

(24 September 2003)

It has been estimated by the Commission that, under the Common Agricultural Policy (CAP) reform compromise, modulation will generate around EUR 12 million of funds in Portugal. Applying the agreed criteria for the distribution of modulated funds across EU-15, the Commission's estimate matches the EUR 33 million net transfer figure, reported by the Honourable Member.

The political agreement in the Council changed several parameters for calculating the financial impact of modulation, which makes comparison with the initial Commission proposal problematical. With the agreed package, the proposed level of franchise was kept and the modulation mechanism will recompense net beneficiaries sooner. However, modulation will reach an annual rate of 5 %, rather than 6 % as proposed. Concerning the redistribution of the modulated funds, 20 % will be allocated directly to the Member State, in which it was generated, while the remaining 80 % will be distributed according to the allocation key based on agricultural area, agricultural employment and a prosperity criterion. The net effect of these changes is that, within the current financial perspectives, the arrangement has been beneficial for Portugal.

As the Portuguese conversion programme of land currently under arable crops to extensive livestock farming will de facto be repealed at the entry into force of the single farm payment scheme, Portugal is allowed to carry out an operation to complete the remaining conversion while taking into account the specificity of the suckler cow sector in Portugal. As a result, the number of suckler cow premia for Portugal shall be increased to 416 539 animals. The Commission will undertake a revision of its original assessment of the impact on Union agriculture of the 2003 CAP Reform once the legal texts have been adopted by Council.