WRITTEN QUESTION E-2484/03 by Daniel Varela Suanzes-Carpegna (PPE-DE) to the Commission. Galicia and CAP reform.
Date: 2003-07-24
Institutions: European Parliament, Provisional data
Subjects: Galicia, agricultural quota, impact study, production aid, reform of the CAP, rural development

C 78 E/118

Official Journal of the European Union

EN

27.3.2004

(2004/C 78 E/0119)

WRITTEN QUESTION E-2484/03

by Daniel Varela Suanzes-Carpegna (PPE-DE) to the Commission

Subject: Galicia and CAP reform

(24 July 2003)

With a view to assessing the possible short-, medium- and long-term effects of the recent mid-term reform
of the CAP and specifically its application in a less-favoured Objective 1 region such as Galicia, it would be
extremely useful to have information on the Commission’s data, studies, reports and opinions on the
subject:

1. Does the Commission have any studies on the impact which the application of this reform may have
on a strong livestock farming region such as Galicia, where farms are small, are not yet
technologically advanced and receive low levels of agricultural support?

2. Has the Commission taken sufficient account of the fact that, in certain inland areas of Galicia, the
economies of medium-sized municipalities chiefly depend on milk production? Has it therefore
considered the effects which the decoupling of aid might have on production?

3. Can the Commission provide any study assessing these scenarios? If no such study is available, does
the Commission not consider it necessary to make this type of forecast, at least in strong farming
regions recognised as less favoured regions,
in order to analyse the impact of the reform in the
medium and long term (10-20 years)?

4. Can the Commission provide the following information on the application of CAP reform in Galicia:
what figures does it envisage as regards developments affecting the population of rural areas? What
proportion would have crop and/or animal production as their main activity? What would be the
anticipated volume of production? How would the local agro-industry be affected? What indirect
repercussions would there be on local and even regional economies?

Answer given by Mr Fischler on behalf of the Commission

(11 September 2003)

During the last couple of years the Commission has carried out an unprecedented number of studies in
order to assess the possible impact of the Common Agricultural Policy (CAP) reform proposals.

In July 2002, together with the Mid-Term Review Communication, the Commission presented the main
results of a study to assess the possible impact of future options for the milk quota system and the
common market organisation for milk and milk products. Further details about this study were published
in October 2002.

In January 2003, the Commission published an impact analysis of the July 2002 Mid-Term Review
proposals, which included four studies carried out by independent experts and two internal analyses
carried out by Commission services.

In March 2003, the Commission has published an impact analysis of the January 2003 legal proposals for
CAP reform, which included two internal analyses carried out by Commission services.

In the coming months, the Commission will publish an impact analysis of the CAP reform decisions as
agreed at the June Luxembourg Agricultural Council.

These studies are based on macro-economic models developed for the Union as whole (current 15 Member
States and enlarged Union), and, in some cases, at Member State level. An enormous amount of reliable
statistical information and parameters is required for the estimation, calibration and validation of these
models. The lack of reliable information at regional level makes it difficult to develop quantitative tools at
regional level and therefore limits the possibility to carry out impact analysis at regional level. The few
quantitative studies which have been published recently by research institutes across Europe have shown
sometimes puzzling and implausible results, very difficult to explain on the basis of past experience and
economic theory. For all these reasons the Commission has not published an impact analysis at regional
level. However, most of the conclusions of the impact studies at Union level can also be useful for some
considerations for the regional impact assessment.

27.3.2004

EN

Official Journal of the European Union

C 78 E/119

The impact of the latest CAP reform agreement is currently being investigated by the Commission in
1.
view of publication in the next few months. However, previous analyses have shown that the introduction
of a single payment based on historical entitlements is expected to have moderate impact on income of
Union farmers, as the expected reduction in production would be counterbalanced by higher producer
prices. In the case of a livestock oriented region like Galicia one might expect similar results.

2.
The Commission is well aware of the importance of the milk sector for a region like Galicia, which
concentrates more than 50 % of Spanish milk producers, representing more than 30 % of Spanish milk
production. The Commission considers that the latest CAP reform offers a clear,
long term planning
framework for their business decisions, allowing them to carefully evaluate the restructuring needs in view
of future market demands. Decoupling aids from actual milk production is expected to have a moderate
impact compared to other sectors, as the milk quotas system, which validity has been prolonged until
2015, will continue to play a role in supply control.

3.
As already mentioned, in the next few months the Commission will publish an impact analysis of the
CAP reform as agreed at the June Luxembourg Agricultural Council. This report will comprise two internal
studies, the first one analysing the impact on the current Member States and a second one studying the
impact on and enlarged Union over the medium term (2003-2010).

The reduction of rural population is a generalised phenomenon that takes place in most industrialised
countries. Over the past decades the CAP has provided tools to fight this trend, recognising the beneficial
role of agriculture for the survival of rural communities. With the latest CAP reform, an enhanced rural
development package has been introduced, which includes a number of new or reinforced measures that
could be useful for Galician agriculture, during the transition to the new economic conditions expected.

(2004/C 78 E/0120)

WRITTEN QUESTION E-2495/03

by Christopher Huhne (ELDR) to the Commission

(25 July 2003)

Subject: Common agriculture policy

Will the Commission estimate, on the basis of a typical basket of food purchases in each Member State for
a typical household, the additional cost paid by consumers as a result of farm support prices compared
with a situation where all aid was untied to production and world market prices applied? Will the
Commission also cite other estimates from other researchers for one or more Member States of a similar
calculation?

Answer given by Mr Fischler on behalf of the Commission

(11 September 2003)

The Commission is not aware of any such specific calculation made either by single researchers or
international organisations. This is mainly due to the fact that such estimates are too problematic to be
considered enough reliable from an economic point of view. The Commission recognises that for a certain
number of food products Union consumers pay a higher price than if they would buy them at world
market price. However, keeping aside the question of the existence of a perfectly functioning and efficient
world market (cid:1) and then of a world price (cid:1) it should be mentioned that this price gap is only slightly
higher than for the whole Organisation for Economic Cooperation and Development (OECD) countries. It
should also not be ignored that support prices for the main agricultural products in the Union have
sharply fallen since 1992 (45 % for cereals and 35 % for beef) and that the current Common Agricultural
Policy (CAP) reform is continuing in the same direction.