CAP reform wins support
Although EU farmers have largely rejected them, the European Commission has been boosted by the favourable reaction in candidate countries to the idea of more money for low-intensity farming and rural development.
EU Enlargement Commissioner Guenter Verheugen travelled to Warsaw to pitch the Fischler package to a Polish government worried about the future for its two million farms, many of them tiny.
Farm leaders and experts across eastern Europe agreed that the Fischler plan offers a lifeline to their poor farmers by decoupling subsidies from production.
But the Czech Republic was one of the candidate countries with concerns that their big farms would be hit by a 300,000 annual cap on farm subsidies.
Franz Fischler also floated dairy market reform and possibly extending direct aid to the EU’s olive oil producers, but these may end up on the floor as bargaining chips in the lengthy negotiations.
The main proposals:
Budget: Expenditure to remain within the 40 billion a year Agenda 2000 ceiling until 2006, but CAP savings of 200 million by 2006.
Sustainable direct payments: An end to production-related subsidies, farmers to get a single flat-rate payment based on compliance with environmental, animal welfare and farm safety standards.
Payments to be based on the amount of EU money farmers received over three recent years.
Farmers receiving between 5,000 and 300,000 in aid will have their flat-rate payment reduced by 3% over seven years, by up to 20%.
Direct aid to individual farmers capped at maximum of 300,000, money removed from direct payments to be recycled into rural development funds.
Rural development: New food quality and animal welfare rules to enhance the quality assurance and certification schemes.
Funds for farmers who need to upgrade farms to comply with strict food safety, environmental or animal welfare rules.
Aid for farm audits and mandatory EU-wide system of farm auditing for farms receiving more than 5,000 per year.
Cereals Guaranteed cereals prices to be cut by 5%, from 2004/2005, and the abolition of monthly increments.
Compulsory 10% of land must be left fallow on non-rotational basis for 10 years.
Extra aid to compensate farmers of bio-fuel crops currently allowed on set-aside.
A review of border protection mechanisms.
Complete abolition of intervention for rye.
Cut in special premium to durum wheat growers.
A cut of 50% in the basic price for rice, and a new safety net intervention for rice.
A flat-rate payment of 100 per hectare for nut growers and a national top-up of 109 per hectare.
Dairy proposals: Options envisaged are
1) continue system agreed under Agenda 2000,
2) repeat Agenda 2000 deal, cutting intervention price.
3) introduce two-tier quota system, one with high prices for the EU domestic market, the other at lower prices to compete on world market, removal of dairy quotas.
