News Release
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Romano Prodi
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No.
42-03
June 26, 2003
EU fundamentally
reforms its farm policy to accomplish sustainable farming in Europe
Today,
EU farm ministers adopted a fundamental reform of the
Common Agricultural Policy (CAP). The reform will completely change the way
the EU supports its farm sector. The new CAP will be geared towards consumers
and taxpayers, while giving EU farmers the freedom to produce what the market
wants. In future, the vast majority of subsidies will be paid independently from
the volume of production. To avoid abandonment of production, member states may
choose to maintain a limited link between subsidy and production under well-defined
conditions and within clear limits. These new "single farm payments"
will be linked to the respect of environmental, food safety and animal welfare
standards. Severing the link between subsidies and production will make EU farmers
more competitive and market orientated, while providing the necessary income stability.
More money will be available to farmers for environmental, quality or animal welfare
programmes by reducing direct payments for bigger farms. The Council further decided
to revise the milk, rice, cereals, durum wheat, dried fodder and nut sectors.
In order to respect the tight budgetary ceiling for the
EU-25 until 2013, ministers agreed to introduce a financial discipline mechanism.
This reform will also strengthen the EU's negotiating hand in the ongoing
WTO trade talks. The different elements of the reform will enter into force
in 2004 and 2005. The single farm payment will enter into force in 2005. If a
member state needs a transitional period due to its specific agricultural conditions,
it may apply the single farm payment from 2007 at the latest.
Commission
President
Romano Prodi
welcomed the historic agreement: “This marks a turning point for this vital
sector for Europe.
The new CAP is good news for our farmers, our consumers and taxpayers. It is good
news for the environment and is trade friendly, which means good news for the
developing countries. Today’s agreement demonstrates that Europe has its priorities
right and can work together to find solutions that will make us more competitive
and responsible in the future. Member states took the long term view and embraced
a new agricultural policy that will deliver high quality food and respect for
the environment. Today’s decision gives Europe a solid and strong negotiation
position for the WTO trade talks. Europe plans to be a protagonist in Cancun and
push all countries to reduce trade-distorting agricultural subsidies.”
EU
Farm Commissioner
Franz
Fischler
said: "This decision marks the beginning of a new era. Our farm policy
will fundamentally change. Today, Europe
has given itself a new and effective farm policy. The bulk of our direct payments
will no longer be linked to production. To our farmers, it offers a policy which
will stabilise their incomes and enable them to produce what the consumers want.
Our consumers and taxpayers will get more transparency and better value for money.
This reform also sends a strong message to the world. Our new policy is trade
friendly. We are saying goodbye to the old subsidy system which significantly
distorts international trade and harms developing countries. Today's decision
will give Europe a strong hand in the negotiations on the Doha Development Agenda.
The EU has done its homework, now it’s up to others to move to make the WTO trade
talks a success. But let there be no mistake. At the Cancun Ministerial Meeting,
the EU will be ready to use its increased negotiating capital only if we get something
in exchange. Unilateral disarmament is not on. The ball is now in the camp of
other countries, such as the US, whose agricultural policies continue to be highly
trade-distorting and have even become increasingly so."
The
key elements of the new, reformed CAP in a nutshell:
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a single farm payment for EU farmers,
independent from production; limited coupled elements may be maintained to avoid
abandonment of production;
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this payment will be linked to the
respect of environmental, food safety, animal and plant health and animal welfare
standards, as well as the requirement to keep all farmland in good agricultural
and environmental condition ("cross-compliance");
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a strengthened rural development
policy with more EU money, new measures to promote the environment, quality and
animal welfare and to help farmers to meet EU production standards starting in
2005;
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a reduction in direct payments ("modulation")
for bigger farms to finance the new rural development policy;
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a mechanism for financial discipline
to ensure that the farm budget fixed until 2013 is not overshot;
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revisions to the market policy of
the CAP;
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asymetric price cuts in the milk
sector: the intervention price for butter will be reduced by 25% over four years,
which is an additional price cut of 10% compared to Agenda 2000, for skimmed milk
powder a 15% reduction over three years, as agreed in Agenda 2000, is retained;
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reduction of the monthly increments
in the cereals sector by half; the current intervention price will be maintained;
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reforms in the rice, durum wheat,
nuts, starch potatoes and dried fodder sectors.
Further
information on the reform is available on the Internet at:
http://europa.eu.int/comm/agriculture/mtr/index_en.htm
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Press Contacts:
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Wilfried Schneider
202-862-9523
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Maeve O'Beirne
202-862-9549
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