14 Jun 2018
SPEECH BY COMMISSIONER PHIL HOGAN AT COPA-COGECA PRAESIDIA – 14 JUNEBrussels Daily
President Rukwied, President Magnusson, dear friends,
Thank you for inviting me to attend your Praesidia. Today is a very welcome opportunity to meet so many of you following the launch of the CAP legislative proposal earlier this month.
As you know, I had a meeting with Pekka the evening before the launch of the proposal to provide him with a comprehensive overview of the key changes, for the benefit of your members.
This reflects the importance of Copa-Cogeca. Indeed, close consultation with both Copa and Cogeca has been a constant feature of the process in preparing and drafting this proposal.
Of course, the Commission’s proposal is, in many ways, merely the end of one phase of the process and the start of the most important phase – the inter-institutional phase. I hope that you will agree that the Commission’s proposal is, at least, a good basis for starting that work and that, working positively and constructively together, we can improve it for the ultimate benefit of our farmers and those living in our rural communities.
Let me first address the budgetary issue. I have taken note of your press release which called for the new CAP to be “backed up by a stronger budget”.
You are all well aware that I have been a consistent, visible and outspoken champion of maintaining a strong and well-funded CAP. But you are also well aware of the challenges I was facing in making this case:
Just over nine months from now, the United Kingdom, one of the largest net contributors, will leave the EU and that brings a cut of around €12 billion to the EU budget. This comes at the same time as there is widespread agreement on the need to address new priorities across the EU, particularly in terms of migration, the EMU Stability Tool and the security and defence of European citizens.
Taken together and in the absence, at least to this point, of unanimity on increasing the level of MS contributions to the EU budget, the EU Commission had to frame a budget in very challenging circumstances and present a prudent proposal.
In that context, the Commission’s proposal is for a reduction of 5% in the CAP budget 2021-2027.
I have listened carefully to the reaction of a number Member States, including those made at the Informal Meeting of Ministers in Sofia last week, as well as from MEPs at a COM AGRI meeting earlier this week, in relation to the adequacy of the budget.
There have been strong calls from various sources to at least maintain the existing budget in the next programming period.
As you know, Member States have the option to increase their contributions to the overall MS budget. This decision must be made by unanimity. I am sure that all of you have seen statements by some EU leaders that they do not wish to contribute more finance to the EU budget.
I encourage you to bring the full might of your considerable political influence to bear in addressing this key issue. We are on the same team in this regard.
The final result on the MFF will be in the hands of the European Parliament and those of the Heads of State and Government. I want to remind you that I worked tirelessly to ensure that the Common Agricultural Policy will continue to be the bedrock on which European agricultural production can continue to grow and also on which it can rely, particularly in terms of protecting farm incomes. You must turn your focus to the co-legislators, in whose hands the budget now lies.
I have, since the beginning of my mandate, listened very closely to your members, here in Brussels and travelling throughout Europe.
A large part of our proposals comes from the understanding of challenges and opportunities that you and your members have helped me to gain.
The key question arising from these discussions is this: how should we best support our farmers to guarantee our food security, maintain sustainable rural communities, while also responding to our citizens’ expectations of greater climate and environment action?
The choice that the Commission has made in relation to the budget is to prioritise the protection of direct payments, given the essential contribution they make in terms of supporting farm incomes. Without a viable income to make a living, farmers will not survive, let alone provide more public goods and benefits.
I have made this point at every meeting I have attended since becoming Commissioner, and I fought tooth and nail to ensure that Direct Payments remained the top priority in the MFF discussions.
But what is more, I wanted to ensure that no farmer has to be subjected to additional uncertainty as regards direct payments, beyond the ones arising from Brexit and the other challenges in this changing world. In this context, I considered it my specific duty to give our farmers the certainty, stability and predictability that they both deserve and need, particularly in terms of the important investment decisions that many farmers have to make. This proposal is done in this spirit, and the risks of not reaching an agreement on a new legislative framework are, in my view, all on the downside.
Fairness has been an overarching theme in discussions with farmers and with wider society. In an effort to ensure a fairer distribution of payments and, particularly, to help our small and medium-sized farmers, who are the backbone of the European family farm model, the Commission has made a number of proposals with this objective in mind. These include:
- compulsory capping on direct payments, taking into account labour to avoid negative effects on jobs. MS will have the option to set a lower cap between €60,000 and €100,000. Between these two figures a system of degressivity will apply. The proceeds of capping will be redistributed within each Member State;
- Member States will also be able to offer small farmers a lump sum, a far simpler administrative procedure than calculating amounts originating from different schemes; and
- in terms of internal convergence, MS will have to ensure that, by the end of the new MFF period, no payment per hectare will be less than 75 per cent of the average payment for basic income support for that MS.
Market orientation and food chain
We have had the opportunity to discuss on many occasions the importance of maintaining the market orientation of the CAP. This is essential for preserving the economic sustainability of farming in Europe.
What we need to look at is how to support market orientation.
In this light, and bearing in mind the fundamental importance of strengthening the position of farmers in the food chain, the future CAP will provide the possibility to support producer organisations who engage in common actions on production, marketing, reduction of costs, environmental actions and food waste reduction, risk management and other kinds of common actions.
This will be done via financial contributions by the EU to operational programmes, and will be open for all agricultural sectors.
As you can see, we are willing to put new opportunities on the table, very much inspired by our discussions and our own approach in favour of strengthening farmers’ role in the food chain. MS will be able to dedicate up to 3 per cent of the direct payments part of pillar I envelope to such actions, and I sincerely hope that they will take this up. I have no doubt that you will play a very important role in making the case for these measures to your national authorities
I welcome the fact that you described as “positive news” our strong focus on market orientation and competitiveness.
I hope that you will welcome the truly innovative ideas we have put forward in this respect.
We have allowed for the simplification of legal requirements and more flexibility for MS to design appropriate risk management tools; as well as including a chapter on exceptional measures in the CMO regulation.
The existing practice of setting aside a portion of the overall Pillar 1 funding will be maintained to create an ‘agricultural reserve’, which can be used for market measures and exceptional support measures This reserve will be at least €400 million in total every year, and will be filled by rolling over the crisis reserve from 2020 into 2021; in the subsequent years, all unused funds will again be rolled over. Rolling over the reserve, rather than opting to fill the reserve anew each year and reallocate the unused funds to Member States, will significantly reduce the administrative burden.
All these measures should make a real difference in terms of boosting market orientation and competitiveness.
Simplification/New delivery model/Climate & environment
I have also take note of your concerns in relation to simplification and the environmental ambition of the proposal.
These dimensions of the proposal follow through on the plans outlined in the Commission’s Communication on the future of food and farming, published last November.
Simplification is at the heart of what we are trying to achieve.
In the past, the policy has quite legitimately been subject to criticism both by administrations and beneficiaries, in terms of complexity and administrative burden.
When I took this job, President Juncker asked me to simplify the policy and that is what I have done. Simplification has been my consistent top priority and we have made real progress: bringing in the “Yellow Card” system for first offenders, improving risk management tools, establishing clearer rules governing intervention in markets, and giving greater flexibility for MS to support specific sectors of economic, social or environmental importance through voluntary coupled support.
Two aspects of the new delivery model will ensure genuine simplification.
The first of these aspects is that rules will be defined much closer to the daily reality of beneficiaries.
MS will, in future, select the measures and set the rules in operational terms, such as the detailed eligibility criteria and based on the CAP plan;
there should more transparency and accountability and better understanding, including legal certainty, due to the relationship between those setting the operational details and the beneficiary; and
measures and rules can be defined in a more targeted way in line with the real needs and conditions of beneficiaries.
The second aspect of the delivery model which can deliver simplification is the shift in focus from rules and compliance to results and performance.
In future, the Commission audits will focus on general principles and systems
The use of new technologies will simplify, speed-up and automate many of the administrative procedures.
Beneficiaries will have improved access to impartial farm advice; and assistance in their applications for support, and reporting requirements for administrations, will be streamlined.
Freely available earth observation data captured by the Copernicus Sentinel satellites and other innovative technologies provide significant information on agricultural activities across the EU. Using these technologies will modernise the administration, monitoring and overall operation of the CAP and have multiple benefits for farmers and Member States’ administrations.
The future CAP will use a system based on systematic, year-round remote observation of agricultural activities.
This will serve the dual purpose of ensuring, at a comparatively low cost, the availability of EU-wide comprehensive and comparable data for policy monitoring purposes as well as replacing classical control methods like on-the-spot checks which should reduce the administrative burden and in all likelihood the control burden on farmers.
Such an approach will help farmers to:
decrease the time and complexity spent to submit applications for CAP aid; some Member States are even considering developing “seamless claim systems”;
become partners with administrations in the process of checking the fulfilment of eligibility requirements; this means less time spent with inspectors on the field and more opportunities to actively fulfil eligibility conditions;
fulfil their CAP obligations thanks to warning alert systems;
benefit from synergies with other digital technologies, such as crop monitoring and yield forecasting, to manage their farms better; further automation of activity recording can reduce associated paperwork.
Furthermore, to limit the administrative burden for beneficiaries, MS will pre-fill the application with as much up-to-date and reliable information as possible. This can go as far as developing an almost ‘claimless system’ of application where the farmer would only be asked to confirm the declaration provided by the administration.
I want to assure you the CAP remains a truly Common policy – with a capital C – based on the right balance between that common nature and the necessary flexibility for Member States to respond more effectively to local conditions than is currently the case under a quite rigid “one-size-fits-all’ approach.
With a CAP less focused on rules, and more on performance, we can reduce the administrative burden to the farming community, without receding in any way from the common vocation of the CAP.
This is the balance the Commission has sought, to ensure that the policy delivers not only for farmers but also for our citizens, who all have a stake in the CAP.
Let me explain precisely what safeguards we are proposing to ensure that we do not have ‘renationalisation’
the legislation will include common EU objectives, basic EU requirements applicable to the types of interventions, as well as several important common elements;
the approval of the CAP Strategic Plans will include a thorough assessment of the completeness, consistency and coherence and the effective contribution to the CAP objectives of the national strategy and MS will be supported by the Commission in the preparation of the CAP plans;
annual performance reporting will allow for the early detection of risks and the first signs of underperformance. Depending on the circumstances, the Commission will be able to take appropriate corrective action, including the request to MS to draw-up an action plan, suspension of payments and financial correction. Of course, we will focus on helping MS to get things right for farmers and finally;
appropriate evaluation requirements have to be designed to allow a timely assessment of the performance of the policy as well as take on board lessons. While the MS will be responsible for the evaluation of the Strategic Plans, the Commission will present a report on the first results of the performance, based on the first three years of the implementation of the Strategic Plans.
Ladies and gentlemen, I have taken note of your concerns, as my services and I have done at every stage of preparing and drafting this proposal.
However, I would ask that you bear one key fact in mind in the coming weeks: we are on the same team. Like you, I am standing firm behind a strong and well-funded CAP for the future. It is now up to all of us to use our influence where it counts. Thank you.