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Elisabeth Köstinger on Common Agricultural Policy

31st January 2013

Elisabeth Köstinger is a Member of the European Parliament.
Agriculture is one of the most integrated sectors in the European Union, and has the main goal of providing sufficient food for 500 million Europeans. Additionally, agriculture is expected to offer benefits for our environment and the protection of our climate. People are rarely aware of the fact that it is actually the farmers who care about high quality of life in rural regions and aim to deliver high quality food.
European farmers are frontrunners when it comes to the production of high-quality food. Today, it is a given that a broad offer of food is available to consumers at affordable prices. This is the result of the historical development and a joint strategy for agricultural production within the EU. European agriculture is adjusted under the Common Agricultural Policy (CAP) that provides an economic backup and helps farmers to improve their entrepreneurship.
However, main goal within the European Union must be to ensure food security for 500 million consumers in the future. The basis for food security is not only a productive use of land in arable areas, but also the use of land in so-called 'less favored areas'.
The CAP offers to all European farms in different regions fairly the same market position. In fact, the CAP means a regulative impact on the market. But the overall impact on the EU-level is a positive one, for example on social and environmental issues.
Therefore, the European Union dedicates nearly 40% of the overall EU budget to the CAP and to the development of the rural areas.
The current Common Agricultural Policy ends in December 2013. Consequently, the CAP undergoes a big reform in order to develop the current programmes and to continue the common policy after 2013.
However, farmers face significant challenges worldwide. The current reform process has to properly take these challenges into account. The main driving force will be issues surrounding the environment and climate change in the future. Agriculture is directly linked to environment and climate change issues, as farming practice can have beneficial (ecological value) or harmful (intensive agriculture) effects on the environment. The provision of public goods like beautiful landscapes, water management, and so forth, do potentially offer environmental benefits. At the same time, climate change has on the long term, various effects on agriculture. For instance, land used for agricultural production is significantly decreasing and natural resources are considerably limited. Agriculture will be challenged by the notion of producing "more from less". In other words, agriculture will have to produce more by using less agricultural land, less water, less pesticide and less fertiliser.
Another main goal is to ensure food security worldwide. Climate change mitigation has an impact on the delivery of food. According to the Food and Agriculture Organisation of the United Nations (FAO), the global population will grow from 7 up to 9 billion inhabitants by the year 2050. Consequently, a 70% increase in the food supply will be required to assure nutrition to all human beings. The EU must therefore be able to contribute to world food demand in the future too. This can be achieved only by improving its agricultural production capacity.
Furthermore, as agriculture is still an important economic sector in the rural area, the maintenance of agriculture in these areas is of utmost effectiveness in order to avoid territorial imbalances. Agriculture offers jobs and generates income to rural residents and boosts additional economic activities like tourism and trade. 90% of European territory consists of rural area, and half of the European population live in rural areas. However, the rural population is decreasing and at the same time growing older as young people find better opportunities in cities and therefore move away.
In order to meet these challenges, the reform of the CAP has to come up with solutions. However, there are doubts that the presented reform proposals by the European Commission will do so.
After the Commission has presented the new legislative framework, the European Parliament achieved to enshrine some important points. These are:
  1. The preservation of the CAP's second pillar structure.
  2. The preservation of the first pillar financing by the EU, which will remain one of the major parts within the CAP. As direct payments represent 40% of the EU farmers' income, they are seen as a safeguard when it comes to market fluctuations.
  3. Development of the rural areas by granting member states to give a financial top up.
  4. Common structures of the market management tools as interventions and stock-keeping shall remain for upcoming crisis.
However, the Commission's main emphasis is to make agriculture more ecological and consequently less productive within Europe. In order to make agriculture more ecological, the Commissioner decided to introduce a "greening component" into the first pillar. By doing so, famers have to fulfil even more "minimum requirements" of environmental benefits in their daily work. With this proposal farmers are encouraged to improve their agricultural practices contributing to climate change mitigation. Therefore, 30% of all direct payments to farms are dedicated to crop diversification, maintaining permanent grassland and developing ecological focus areas at farms.
The Parliament did not agree on all points of the Commission's proposal. As the use of raw materials, soil and water resources are increasing all over the world, the Commission has to take the EU's approach into consideration to include rather than exclude more arable land into the production.
Furthermore, it is important to prevent controls escalating. Controls and extensive bureaucracy lead to needless burdens for farmers and destroy their perspectives. Therefore, the burdens to gain funds need to be reduced.
My personal focus is on the second pillar of the CAP, the rural development programmes. For Austria, the second pillar is especially a very important topic which needs even further attention. Besides the fact, that more than 60% of the financial budget is drawn from the second pillar, Austria is a forerunner concerning the efficiency and organization of these programmes.
These programmes perfectly support the direct payments of the first pillar and they motivate farmers and other economic actors in rural areas to make improvements and increase creativity. Moreover, the second pillar has the power to provide ecological benefits for the environment.
When it comes to the implementation of the second pillar, Austria is a precursor as well. The main focus of Austria's rural development programmes is on the agri-environmental scheme, which ensures an environmentally compatible and extensive agriculture. 90% of Austria's agricultural areas are participating in this programme. In order to demonstrate the success of the programme I would like to give a few examples, particularly from Austria:
  1. Old fruit trees: Old fruit trees are part of the Austrian landscape and a part of Austrian culture. Farmers are required to conserve these meadows. There are more than 17.000 farmers conserving old meadows with old fruit trees.         

  2. Organic farming: Due to the programmes of the rural development, Austria became number 1 in producing organic food in the European Union. This was possible because of the support through the rural development programme. There are approximately 22.000 organic farmers who contribute to climate protection, while producing high-quality food.   

  3. Mountain areas: The funding for farms in areas facing natural constraints are the backbone for these so-called less favoured areas. Therefore, funding for farms in these areas must remain as the essential instrument to keep agriculture in these areas economically alive.

In Austria there are almost 9000 square kilometres Alps, containing a surface of permanent pasture of about 413.000 hectare. The funds for less favoured areas ensure the supply of public goods, often for the profitability of the whole region. Tourism, for example, does make good business because of these measures. Furthermore, the cultivation and the maintenance of a cultured landscape in all regions are ensured. 

To summarize the EU plays an important role in forming agricultural policy. Although, the European Union is facing financial challenges, agriculture must play a preferential role the EU budget's future. Agriculture creates jobs, boosts economic growth and maintains food security. A fact that must not be neglected!

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