WRITTEN QUESTION E-2229/02

by Charles Tannock (PPE-DE) to the Council

(23 July 2002)

Subject: CAP reform and enlargement

Unlike the Structural Funds, which are directly linked to per capita income levels and which may, therefore, be seen as examples of European solidarity, the CAP is not calculated on the basis of per capita GDP and has always contained significant budgetary distortions aside from its many other deficiencies.

The German Government is believed to have calculated recently that each French man, woman and child receives EUR 40 a year from the EU's agricultural kitty, while each German contributes EUR 53 a year. British, Dutch, Austrian and Swedish taxpayers also ensure that their respective countries pay a disproportionate share of Community funds, with over 50 % of Community expenditure accounted for by the CAP. Does the Council believe that the budgetary distortions generated by the CAP are a necessary part of the European ideal or historic anomalies deserving of urgent reform? If the latter, does the Council believe that it is better for the existing Member States to agree to fundamental and serious reform of the CAP before accession of the applicant countries takes place or to wait until 2006 and risk a showdown which could generate considerable anti-European feeling in a number of Member States, including Germany?

Various proposals for reform have been presented including, most recently, one from the Commission. What is the Council's response to those proposals? Does the Council accept that it is perfectly possible to adjust budgetary distortions between individual Member States, whilst at the same time ensuring that long-term support to farming and rural communities is maintained in a way that commands widespread public support?

There are a variety of ways to approach reform, such as scaling-back on direct payments in favour of broader-based subsidies, restructuring and co-financing. Has the Council also given thought to the idea of an equalising budgetary rebate mechanism linked to per capita GDP and population which would ensure that budgetary contributions would be financed on an equitable basis between all Member States?

Finally, if obstruction to reform on the part of any individual government were to have the effect of holding up enlargement, and, in particular, the accession by the summer of 2004 of those countries which have met the accession criteria, does the Council believe that the major net contributing states will continue to fund the CAP or other Community expenditures after 2006 as though nothing had happened?

Reply

(19 December 2002)

Since its inception in 1962, the Common Agricultural Policy (CAP) has pursued the objectives which are currently set out, unchanged, in Article 33 of the EC Treaty. In pursuit of these objectives, the CAP was established on three basic principles including financial solidarity. Over the course of several decades, the CAP has been adapted to meet the challenges of successive enlargements, it has undergone a number of reforms and it has been adjusted to ongoing policy developments in other areas, such as the completion of the single market, and the inclusion in the Treaty of provisions on the environment and food safety. In 1999, the Berlin European Council confirmed the role of the reformed CAP among the Union's major policies and in its financial perspective until 2006.

To-day, the CAP faces numerous new challenges, including enlargement, as referred to by the Honourable Member, but also internationally in the negotiations which follow from the WTO Doha Declaration, as well as domestically in meeting society's expectations regarding a fair income for farmers, protection of the environment, appropriate standards of animal health and welfare, and a supply of safe and quality food products for consumers.

In particular, three exercises are being conducted simultaneously enlargement negotiations, WTO negotiations and internal Mid-Term Review. Although these exercises are inter-related in the sense that developments in one arena have implications in others they are not interdependent, in the sense that any one is a precondition for the others.

In July 2002, the European Commission presented to the European Parliament, to the Council and to civil society a Communication on the Mid-Term Review of the CAP. Like the Parliament, the Council is examining the issues in the Communication with the participation of the Commission. The Council's work has not yet reached a conclusion and, in any event, no legislative changes can take place until the Commission presents its legislative proposals later in the year. Specifically, the equalising budgetary rebate mechanism referred to by the Honourable Member does not feature among the options presented by the Commission.

Finally, the Union's financial perspective beyond 2006, and other related issues including, if necessary, the CAP, will be examined by the Council in due course on the basis of Commission proposals.