Support for rural development by the EAFRD - Voluntary modulation of direct payments under the CAP (debate) 
President
The next item on the agenda is the joint debate on
the report by Jan Mulder on behalf of the Committee for Agriculture and Rural Development regarding a proposal for a Council regulation amending Regulation (EC) No 1698/2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD)
- C6-0237/2006 -
the report by Lutz Goepel on behalf of the Committee on Agriculture and Rural Development on the submission relating to the Regulation of the Council establishing the principles for the voluntary modulation of direct payments set out in Regulation (EC) No 1782/2003 establishing common rules for direct support schemes under the common agricultural policy and establishing specific support schemes for farmers, and amending Regulation (EC) No 1290/2005
- C6-0235/2006 -
Mariann Fischer Boel
Member of the Commission. Mr President, before going into the content of the reports I want to thank the rapporteurs, Lutz Goepel and Jan Mulder, along with the Members of the Committee on Agriculture and Rural Development for their efforts in drafting the two reports.
I should like to start with Mr Goepel's report. I have carefully taken note of the Committee on Agriculture's position, which is to reject the proposal concerning voluntary modulation and call on the Commission to withdraw the proposal.
Before addressing some of the report's points I should like to recall why I presented the proposal and what the guiding principle was for the drafting of it.
The Commission proposal is a response to a request made by the European Council last December to present a proposal on voluntary modulation. Such a modulation was a means to enable Member States to transfer funds from the first pillar of the common agricultural policy into the second pillar in order to reinforce the rural development budget, an objective with which most of you would agree.
I have expressed my concerns about certain aspects of the Council agreement, in particular that it would apply both to direct payments and to market-related expenditure as well as the fact that it derogates significantly from the basic rules of rural development expenditure. The Commission tries to address those concerns to the greatest extent possible and ensure as much coherence as possible with the rules governing compulsory modulation and rural development spending. That is in line with the Commission's declaration on the interinstitutional agreement on the financial perspectives.
With regard to some arguments in Mr Goepel's report, it is said that voluntary modulation would lead to a distortion of competition. I do not share that view. Both the single farm payment and rural development expenditure are considered as non-trade distorting under the WTO rules.
It is claimed that there is no proper impact assessment. Firstly, in the short time available during the meeting last December that simply was not feasible. Secondly, it would have encountered methodological difficulties since we have no idea which Member States would apply voluntary modulation, and if they did so, we have no idea of the percentages they would apply. So, the proposal does not go against the principles of rural development, such as national cofinancing. We propose optional cofinancing as a compromise, to meet the expectations of the Council.
Let me now turn to the Mulder report on the proposed amendments to Regulation (EC) No 1698/2005. The text is a legal translation of what was decided last September by the heads of state and government in relation to the so-called 'capping provision', which is common to all structural instruments, including the Rural Development Fund, and is also reproduced in the general regulation on the structural funds. Moreover, the text reflects the non-cofinancing requirement for an amount of EUR 320 million as part of the Rural Development Fund allocation to Portugal, which was also agreed at last December's Council meeting.
I have taken note of the draftsman's position, in particular on cofinancing. I agree that the exemption of EUR 320 million for Portugal from the requirement of national cofinancing should be an exception in rural development, since cofinancing is a basic rule in rural development. It also means co-responsibility for expenditure and it is an essential element of the subsidiarity that is applied in the policy implemented in the various Member States or regions.
I look forward to a fruitful discussion on this issue. I will respond at the end of the debate.
Lutz Goepel 
rapporteur. - (DE) Mr President, Commissioner, let me take this opportunity to once more express warm thanks to all my fellow Members from all the groups who have supported me in creating a framework worthy of this debate, which is of such great importance to this House and to Europe's farmers.
You, Mr President, by your wise and astute decision, have ensured that Members from all groups will get the chance to speak, albeit at a rather later hour. Following a decision by the Council - which, as is so often the case with agriculture debates, is notably absent today - the Commission submitted a proposal according to which 20% of agricultural direct payments would be shifted from the first pillar of CAP to the second, from which they could be spent without mandatory co-funding.
That is a concession by the majority on the Council and, whether it wishes to or not, on the part of the Commission, as part of the budget compromise reached in December 2005. The Commissioner has confirmed as much. This House has already expressed strong misgivings about this in the interinstitutional agreement on the Financial Perspective. When I say that the Committee on Agriculture and Rural Development firmly rejected this proposal, I mean that it did so with only three dissenting votes, and its rejection of the draft legislation was indeed unanimous.
This is not just about differences of opinion where specific policies are concerned; it is also about where Parliament, as an institution, should stand in the forthcoming debates on the reorientation of the Community budget. As part of the Budget compromise, all the institutions agreed that all the Community's outgoings, among them the post-2013 agricultural expenditure in particular, should be subject to review, and that this House will play a full part in this process from an early stage.
Now, though, we see the Council adopting, through the back door, an extensive remodelling of agricultural funding, and this House has no option but to kill it off, for there was no prior consultation with us. Instead, the Council has decided to proceed with such an extensive reallocation of resources that there will be such limited scope for debate in 2008-2009 that serious discussion will scarcely be on the cards. This is something that we in this House cannot tolerate if we are to be taken seriously in future, and the proposal is, moreover, questionable in terms of financial policy.
What is worthy of note on the agricultural policy side is that there is no impact assessment accompanying the proposal. On the contrary, the impression is given that a short-term reduction of 20% in direct payments would not cause farmers any problems. Taken together with the cuts resulting from mandatory modulation and those generally expected after the accession of Bulgaria and Romania, what this means, for those Member States that want to apply this voluntary modulation, is a reduction in payments of something like one-third over against what they were in 2003. Far from supporting structural change in agriculture, that amounts to a flagrant structural violation that would put the viability of many thousands of farms in rural areas at risk. It is generally agreed that what our farmers need is the security to plan ahead.
In the absence of any impact assessment on the part of either the Council or the Commission, we caused evaluations to be carried out, and these confirm, not only that there will be massive distortion of competition and illegal discrimination against the farmers concerned, but also that modulation does nothing to serve the objects of the Community in rural areas, but rather jeopardises them to a considerable degree.
To date, the Council has offered no response whatever to the legitimate concerns of Europe's farmers, and there has as yet been no discussion of the potential consequences. This sort of behaviour is not at all what we are used to in the European Union and is also quite obviously inappropriate. Since, moreover, the transferred Community funds are not to be spent in accordance with a strategy laid down at Community level, we find ourselves in the paradoxical situation in which the renationalisation of agriculture policy is being paid for entirely from Community funds, particularly when one considers the way the Council is thinking ahead; I would ask you to take a look and see what happens at the next meeting on 14 November, this very week.
We all want to strengthen rural areas. We have put forward proposals for solutions to their financial problems that are worthy of discussion; the Böge report is just one of them. The Council, though, preferred not to give these proposals any closer attention, so let us not reach out a hand to help it after all that we have done already. If there has to be a paradigm shift in agriculture policy, then let that happen only after a transparent and open debate in which Parliament, too, can have a decisive part to play, for this proposal is wide of the mark - legally, in terms of its substance, and as policy - and solves none of the problems that rural areas have.
If we want our contribution to future debates on the valuation of the agricultural budget to be taken at all seriously, then we should firmly and forthrightly reject this proposal. I hope that the Council's response to the vote in this House will be to embark on a more in-depth discussion of the matters at issue. My colleagues in the committee, and I myself, are willing to join them in this, but the Council must make a move. It has to be said, though, that it probably does not entertain very high hopes at the present time.
Jan Mulder 
rapporteur. - (NL) Mr President, my report has received unanimous approval in this House's Committee on Agriculture and Rural Development. We considered additional aid for rural development in Portugal to be justifiable; although this was not, of course, ideal, it did form part of a package of measures nodded through by the Council in December, it was not something to which this House, during the negotiations on the financial perspectives, thought it necessary to make any changes. I should like to repeat, though, that it is not ideal and should remain an exception. We have to accept, after all, that something similar has been agreed on for various other countries as well.
I should now like - with your permission, Mr President - to turn to the Goepel report. With regard to the financial perspectives, which were subsequently approved by this House as a whole, the committee made it quite clear that Parliament has suspended its verdict with regard to voluntary modulation. It is therefore surprising that the Commission should come up with a proposal so promptly. It has, actually, only followed the Council's 'orders', for want of a better word.
I disagree with the Commissioner that there is no danger of a renationalisation of European agricultural policy; it is something I regard as a very dangerous trend. What matters most of all to the European farmer is the common market of soon to be 500 million consumers who we must try to retain as much as possible. In addition, as Mr Goepel has already indicated, it can hardly be said that there has been any examination of the policy's effects. It may well be that around 2013, the average farmer in Europe, as a result of all manner of measures, will need to make do with one third less of what he received in 2004. Is that the reliable authority that the European Union wants to be? What are the consequences of this? Can farmers survive this measure in certain regions and suchlike? We have not received an analysis of it, and it would appear to me that the Commission has no choice, when the proposal is submitted, but to analyse its effects.
One of the most important prerogatives of this Parliament, upon which Mr Bösch will undoubtedly elaborate, is the right to enact the Budget. We have approved the financial perspectives, which contain precise figures, with so much being set aside for this, so much for that and, among others, so much for market measures in the framework of European agricultural policy and so much for rural policy. If voluntary modulation were to be implemented, it would have an impact on these figures. Does that not amount to a change to the financial perspectives? I do believe that it does. A change to the financial perspectives requires approval by the budgetary authority, that being the European Parliament, the Commission and the Council. I am not at all certain that Parliament will go along with this. That is why I will be voting against the Commission proposals on voluntary modulation.
Herbert Bösch 
draftsman of the opinion of the Committee on Budgets. - (DE) Mr President, Commissioner, ladies and gentlemen, I have not been in this House long, but I have been here long enough to realise that solid agreement between the Committee on Agriculture and Rural Development and the Committee on Budgets, such as we have here with the rejection of this draft, is not that frequent an occurrence.
The opinion of the Committee on Budgets does, of course, concentrate on the issues of relevance to the budget, and there are with regard to these sufficient arguments available to justify the firm repudiation of the Commission's proposal. The Member States can, by way of voluntary modulation, unilaterally and without consultation with Parliament, increase non-mandatory expenditure on rural development by many billions of euros, contrary to the wording and spirit of the interinstitutional agreement.
Nor has the Commission adequately thought through the budgetary consequences of a voluntary transfer of this kind. It is irresponsible of the Commissioner to declare herself once more to be taking down dictation from the Council and not to have carried out an impact assessment before the proposal was adopted. What will be this proposal's effects on the common agricultural policy? We do not know that any more than she does, and yet we are supposed to agree to it; well, we are not going to. Perhaps then exactly the same thing will happen as did with the European aid arrangements for cotton, which the ECJ declared null and void at the beginning of September this year; there, too, the considerable economic effects of the reform had been underestimated or insufficiently examined.
Moreover, the proposal contradicts everything previously laid down concerning modulation, since it makes no provision for cofinancing on the part of the Member States. What our Heads of Government have come up with in order to fill the hole in the rural budget, for which they were responsible, is a cheap solution; if the Council were really interested in topping up the funds for the second pillar, they could quite simply have complied with this House's demands in respect of the 2007-2013 Financial Perspective.
What we should do with this proposal is reject it, and firmly.
Struan Stevenson
on behalf of the PPE-DE Group. - Mr President, according to Government figures, the average earnings of farmers in my constituency in Scotland in 2005 were GBP 10 000, or EUR 14 000. This is disastrous: it is forcing farmers into bankruptcy! They do not have any room for reinvestment in the industry. Instead of offering practical help, Prime Minister Blair comes up with the startling proposal to slash 20% off farmers' single-farm payments, on top of the existing 5% compulsory modulation that already exists and, as we have heard from Mr Goepel, a further 8% that will be deducted to pay for Bulgaria and Romania.
In other words, British farmers - as Britain appears to be the only Member State really pushing for this voluntary modulation - will lose roughly 33% of their subsidy, which for many of them is a vital lifeline. But worse, this naked discrimination against UK farmers will place them at a huge competitive disadvantage to all other farmers in every other Member State in Europe. I say to the Commissioner: it may be that in the eyes of the WTO this does not amount to trade distortion, but in the pockets of farmers it certainly amounts to a catastrophe.
I must also protest at the threats being issued by the UK Government, which tells us that if we vote against voluntary modulation it will compromise the future of the popular agri-environment schemes in which many UK farmers have participated. This is tantamount to blackmail and coming from a government that has imposed more than 80 stealth taxes, from a Chancellor - Gordon Brown - who has made taxation in the UK higher than Germany or France and now wants us to believe that he needs to slash 25% off our farmers' single-farm payments in order to be able to afford agri-environment schemes, it is an absolute joke. I can tell Mr Brown that if he watches the way this House votes on this proposal, he will see what we think of his sense of humour.
Katerina Batzeli
Mr President, Commissioner, we are being called on today to take a stand on a proposal on rural development policy which we consider to be invalid, contradictory and dangerous to the future of the CAP itself, as well as to our own credibility. This is, of course, a proposal which emerged from a contradictory compromise by the European Council last December.
On the other hand, however, it is worth our emphasising that the Commission proposal tries to improve the outcome of this highhandedness on the part of the European Council towards both the institutions and the Treaty itself.
We agree in principle with the Commission proposals for defining the measure on a multiannual basis at national level and retaining the limits which exist in the Rural Development Fund. However, although these improving proposals could be considered as a good effort by the Commission towards the Council, they cannot be considered adequate.
As the Socialist Group in the European Parliament, we shall vote against the legislative text of the Commission regulation on voluntary modulation at this stage for the following reasons: firstly, in order to strengthen the Commission's negotiating position with the Council, which in essence wants voluntary modulation as a blank cheque for managing Community expenditure under pillars 1 and 2.
Secondly, in order to give the Commission the time needed to present an integrated proposal which responds to the real needs and the real rural development support mechanisms, without renationalising the CAP.
Thirdly, in order to provide a time margin for studying the effective and essential possibility of taking up Community resources transferred from compulsory modulation and from the new additional modulation, in order to avoid the return of significant resources from the Member States due to inadequate application of the programmes.
Commissioner, there is already a timetable for evaluating the new CAP and its priorities. We expect the Commission to examine measures for viable, effective, simple and transparent policies which will contribute towards the objectives of rural convergence and development. You will find my group in agreement with such a policy. A ceiling on payments and an additional single modulation rate are policies with which we can agree in principle. However, they will have to be clarified as to their expediency, their added value and the degree to which they help to achieve the objective of rural convergence.
Commissioner, only under these preconditions will the Commission be able to submit an integrated proposal so that, all together, we can save European aspirations and our credibility in the eyes of the citizens of Europe.
Kyösti Virrankoski
on behalf of the ALDE Group. - (FI) Mr President, first I would like to thank the rapporteurs, Mr Mulder and Mr Goepel, for their excellent reports. Voluntary modulation is a bit of an oddity, something which has never been tried before in the EU's common agricultural policy. The conclusion adopted by the European Council that a Member State may cut a farmer's direct aid and marketing payments by a maximum of 20% was both unexpected and very badly formulated. The European Council decided that even export aid could be cut. Luckily, the Commission did not go along with this totally unrealistic proposal.
First of all, the cut would not be based on any objective rules but would merely be the result of high-handedness on the part of a Member State. It would lead to inequality among farmers and would distort competition. It would amount to an arbitrary additional tax on farmers.
Secondly, it needs to be made very clear that the cut would not increase resources for rural development in the countries concerned. This additional funding would not be affected by national cofinancing as contained in the Regulation on rural development. A Member State could use modulated cash in place of its own national funding and thus reduce it. It would then of course be a case of a direct payment of agricultural aid to the Member State's Ministry of Finance. How could the European Parliament deal with discharge as regards such a transfer of funds?
Voluntary modulation would entail moving funds from the EU budget's compulsory expenditure to non-compulsory expenditure. That would mean that the interinsitutional agreement would have to be altered. The Council would thus be in violation of that agreement six months after it was concluded. The Council would therefore not be a reliable partner in the agreement. For these reasons I warmly welcomed Mr Goepel's suggestion that Parliament should reject the proposal.
Friedrich-Wilhelm Graefe zu Baringdorf
on behalf of the Verts/ALE Group. - (DE) Mr President, Commissioner, Mr Mulder, we are, today, discussing the second pillar and rural economic development, something that this House, and - if one is to believe its own utterances - the Commission too, regard as important, and even the members of the Council, in their speeches, keep on emphasising that this is where the future of European agricultural policy lies, yet here we are, rejecting a proposal that is intended, to all outward appearance, to put several billions of euros aside for this purpose.
It is not easy to justify this rejection on the basis of the money involved, but the offer being made to us is an improper one. The powers that have caused it to be made are those who are responsible for rural development falling EUR 20 billion short of the budget proposal made by this House and the Commission; it is they who have forced through budget cuts come what may - not least to the detriment of this qualitative line - and are now saying: 'OK, you can take 20 per cent out of the first pillar, and then use it to top up what we have taken away from you.'
That is what I call improper. These powers are no friends to European agriculture, or, indeed, to Europe's rural areas; what they are seeking to do instead is to use the agriculture budget as a quarry in the same way as they are trying to do with many other policy areas, but what makes this so very deceitful is that it has the appearance of being a redistribution while not really being one, with the possibility of taking the money out without co-funding, so, in other words, the agriculture budget is, as a whole, more likely to lose something than have anything added to it.
This is in fact not the proposal that the committee made for medium-term financial planning, in which we said that co-funding in the first pillar too would have made it possible for funds to be made available for the second; we would in fact have been able to restrict the co-funding of the second pillar to 25%, thus enabling a better flow of funds, but all these proposals were cast to the winds, and now along they come with this figure of 20%. The only thing is, Commissioner, that this financial plan has been agreed to by the Commission, and also - and this I have to say with bitter regret - by this House, which has gone along with this extortion in order not to put the European Union's financial future at risk.
Commissioner, that must not be allowed to hamper us, though, and I will ask you just what you propose to do in order that rural development is not starved of funding. What are we in this House to do? How are we, in our groups, to make it clear that rural development can have a future not only through the reallocation of funds, and that this whole budget line must develop its financial arrangements independently, in the same way as the other structural funds have done? It is to that question that I would like to have an answer from you, here and now, in order that the Commission, in our next negotiations on this subject, should show its colours more openly and that we, here in this House might perhaps stand up for ourselves a bit more.
Ilda Figueiredo
on behalf of the GUE/NGL Group. - (PT) Mr President, I should firstly like to stress the importance of adopting Mr Mulder's report, thereby giving assent to the Commission's proposal to exempt Portugal from the requirement to cofinance the amount of EUR 320 million, in line with the December 2005 Financial Council Agreement.
My country, Portugal, faces known difficulties in meeting the unfair criteria of the Stability and Growth Pact, given the fragility of our economy and the accumulating social problems, especially in rural areas. Hence the importance of adopting this proposal.
As regards the Goepel report, I wish, secondly, to say that we are in favour of compulsory modulation, accompanied by capping and by the fair redistribution of these funds, and in the new Member States too. As previous speakers have said, this is not guaranteed in this Commission proposal. We therefore call on you, Commissioner, to reconsider your proposal.
Janusz Wojciechowski
on behalf of the UEN Group. - (PL) Mr President, I would like to congratulate Mr Goepel on his excellent report, whose views I fully share. Although the proposed modulation directly affects the old Member States, it is also cause for concern among farmers in the new Member States. The modulation impairs the vision of stable agricultural rules until 2013, and will lead to what we fear greatly in the new Member States, that is, a partial re-nationalisation of agricultural policy, which the new, poorer Member States will not be able to afford. That is the reason for our concern.
Let us adhere to the established agricultural policy rules. Keeping them stable until 2013 is the minimum of certainty we owe to our farmers. They have been subjected to too many upheavals in a short time: changes to the support system, liberalisation of agricultural markets, and increasingly stringent norms and standards in various fields. It is all too much, too soon. What agriculture needs is clear and stable rules for at least the coming few years. That is why I support Mr Goepel's report.
Andrzej Tomasz Zapałowski
on behalf of the IND/DEM Group. - (PL) Mr President, today's debate on the voluntary modulation of direct payments once again highlights the different ways in which the old and the new Member States understand the common agricultural policy. When the old members think of the future of the CAP, they think of the future of agriculture in their own countries, rather than in the enlarged European Union.
Rejecting the Commission's proposal is the most appropriate course of action. The claim that it is contrary to the rules of competition and solidarity, threatens re-nationalisations and breaks the promises made to the farmers, is correct. The point is, why were these arguments not considered when setting out the terms of accession for the new Member States in 2004? These conditions have blatantly undermined competition and the principles of solidarity. The poorer states, who receive much lower payments, are forced to compete on unequal terms.
Re-nationalisation of the common agricultural policy was introduced in the new Member States, which in 2004 paid as much as 75% to the first pillar, while the old fifteen members benefit from 100% EU support. This is hypocrisy. The terms of accession were not based on objective criteria, but discriminatory production quotas were imposed which took no account of the potential of producers and self-sufficiency in food production for example, the milk sector. Support in the most obvious cases (fruit and vegetable growing) has been neglected, and no consideration has been given to the extremely low income of farmers in the new Member States. This mindset is a threat to farmers, to consumers and to the entire economy of the European Union.
Duarte Freitas
(PT) Mr President, Commissioner, I should like to begin by congratulating Mr Mulder and Mr Goepel on their excellent reports and by saying that I endorse the proposals contained in their reports. The Council's decision last December to allow voluntary modulation may lead to distortion of competition between the farmers of different Member States, depending on the percentages of modulation that they choose to adopt.
The fact that there is soon to be a health check on the CAP 2008, in which we shall be able to discuss capping and the increase in compulsory modulation, is a further reason not to press ahead now with measures such as voluntary modulation, which may bring irreversible consequences. If this proposal is pushed through, we shall clearly be taking a further step towards renationalising the CAP and dismantling the communitisation of agricultural policy.
Without wishing to underplay the political importance of rural development, I must say that investment in this policy will not be boosted by this measure. Let me give the example of my country, which returns more second-pillar funding to Brussels than any other country and which, in the EU-15, already had the largest balance between the first and second pillars, 53% and 47% respectively.
Nevertheless, the Minister for Agriculture in my country, Portugal, has already announced the intention to adopt 20% modulation. Taking back money from farmers in order to fund the State budget or so that the money can be given back to Brussels will certainly not be the best solution for farmers, and it represents an approach based solely on economic criteria and aimed at using the money for rural development without cofinancing.
With these practical risks, which are already clearly apparent in countries like Portugal - as evidenced by the example I mentioned - it is abundantly clear that, if we are to defend farmers resolutely and to champion a common agricultural policy, we must do all we can to ensure that voluntary modulation goes no further.
Bogdan Golik
(PL) Mr President, like my colleague before me, I would like to express my support for Mr Mulder's draft report on exempting Portugal from the requirement to cofinance its national quota of EUR 320 million. This is a good decision which shows solidarity, and is particularly important in the light of the drought that has hit that country. I concur fully with Mrs Batzeli's words on Mr Goepel's report, but as regards Mr Mulder's report, and in particular the final section, where the rapporteur criticises the method by which rural development funds are distributed under the current rules, and where he demands that distribution be based on objective criteria, I would like to draw your attention to the following facts.
The new Member States are characterised by significant under-investment in the farming sector and their farmers' incomes are vastly disproportionate to those in the other Member States. They are also ignored as regards the fundamental principles of non-discrimination, solidarity and proportionality, and by having to cofinance direct payments from their own budgets, which are much smaller, not to mention the huge reduction of around EUR 20 billion in the pool of funds for rural development for 2007-2013 in comparison to what was promised during the accession negotiations.
Here I must also point out that support for rural development as set out in the strategic Community guidelines should make allowance for the differing structural problems in the fifteen and the ten EU member states, including Bulgaria and Romania. Particular attention must be paid to ensuring the necessary funding for the new Member States in respect of their huge need for basic investment and the need to secure wide-ranging support for rural development.
Rural development policy offers a range of mechanisms which make it possible to influence the differing needs of European farmers.
However, we need to search further for effective mechanisms for such a policy in order for it to fulfil its aims and to make it increasingly effective for all countries of the European Union.
Nathalie Griesbeck
(FR) Mr President, ladies and gentlemen, firstly, I too should like to thank our rapporteur, Mr Mulder, for his steadfast work, not only on budgetary issues in general, but also on issues concerning the funding of agricultural and rural policies.
If, in my capacity as permanent rapporteur on the Structural Funds within my committee, I asked to take the floor in this debate on the modification of the ceilings on EAFRD development support, it was to express two things: firstly, a 'democratic' regret, but also a kind of 'strategic' wish. I deeply regret the fact that the European Parliament is being forced to change the ceilings that it has already adopted, and this in order to bring them into line with the decisions taken by the Council.
Furthermore, my 'strategic' wish consists in pointing out our attachment to the fundamental principles of rural development policy, and the extent of that attachment, because these principles give Europe transparency. I should like us to remain very cautious when faced with the temptation to make wider use of obligatory cofinancing, which could eventually lead to the renationalisation of expenditure under the first pillar. Such a decision must not be the subject of a 'go with the flow' policy, but must be considered as an important issue to be subjected to a clear and democratic debate. As for the necessary - and undoubtedly justifiable - Christmas 'presents' given to Portugal, on this subject too I regret that there is no real strategy and I would ask that we define one and that it be the outcome of an in-depth debate.
Zdzisław Zbigniew Podkański
(PL) Mr President, the proposal for so-called 'voluntary modulation' by the Member States as regards direct payments to agriculture will in effect lead to a cut of some 20% in the funds paid out to farmers, which will be in breach of the norms and procedures prevailing in the European Union. Exempting farms receiving less than EUR 5 000 from modulation means that only farms under 40 hectares will be covered.
This system, which is on the face of it logical, cannot be cohesive, merely due to the fact that the new Member States, unlike the old countries, are already cofinancing the common agricultural policy by topping up EU payments from their own budgets.
In my opinion, we should aim to eliminate the existing imbalances and introduce new rules and payments in all Member States as quickly as possible. Otherwise regional inequalities will intensify. I would like to remind this House that it was we Polish MEPs who warned of the consequences of approving an EU budget of just 1% of GNP and cutting rural development funds.
Jan Tadeusz Masiel
(PL) Mr President, direct payments give many poor Polish farming families a chance to make ends meet. They have been a way of buffering the increased cost of production since Poland's accession to the European Union. Using voluntary modulation to reduce them by as much as one third from 2008, at a time when they are so low in our country anyway, would cause substantial losses to these farms and families.
The important aim of developing rural areas, to which the money thus saved would be directed, should be pursued on the basis of other funds. We could restrict regional payments to recipients with a maximum not of 50, but of 100, 200 or 500 and more hectares.
James Nicholson
Mr President, I should like to begin by congratulating Mr Mulder and Mr Goepel on their reports. My first point is that this is an extremely bad proposal. We know how it originated in the Council meeting last December. I would say to the Commissioner that this is a proposal that will only be implemented in the United Kingdom. We all know that. Even the dogs in the street know that. It has been brought in to help Blair and his government try and resolve their problem.
It will place United Kingdom farmers in an impossible position. Financially, they will be in a totally invidious position compared to other farmers in all parts of the other 24 EU Member States. In Northern Ireland it will erode the concept of the family farm, which is the backbone of our industry.
I therefore totally reject this proposal, and will not stand by and allow anyone to hijack farmers' single farm payments. This was something that was agreed. It was promised and it is depended upon. It is not the fault of our farmers that the UK Government has negotiated such a miserable deal on development of the second pillar in support of the rural economy. I must say to the Commission, the Council and the UK Government that they should not blame us if now they do not have sufficient funds to support some of their proposals for the rural and environmental development of the countryside. I can take no blame for this. It is totally the responsibility of the negotiators.
I must also tell the truth, which is that the so-called negotiators have achieved the worst possible deal, and that they now want to hijack a maximum of 20% or perhaps even 25% of farmers' single farm payments. Such a proposal must not be agreed to, either now or in the future. It will turn farmers and other members of rural society against each other. It is unworkable and will spell the beginning of the renationalisation of the common agricultural policy as we have known it. It must not be accepted.
This dossier will have to be referred back to committee, and I will call on the Commission not to fall into what is a skilful trap that would set farmers and other rural dwellers at each others' throats. We have a duty to reject this legislation. We must never agree to this covert means of undermining UK farmers and placing them in a position so subservient to the rest of the European Union.
Bernadette Bourzai
(FR) Mr President, Commissioner, ladies and gentlemen, everyone is familiar with the 2003 CAP reform, which provided for the freezing of the first pillar and the strengthening of the second, namely rural development. The fact is that the agreement on the new financial perspective - which, I might add, I voted against - runs counter to these two commitments.
Indeed, the rural development package has lost EUR 20 billion in comparison with the Commission proposal, a figure that represents, for the 15 old Member States, 35% less than the current period. The proposal for voluntary additional modulation, which is aimed at transferring a maximum of 20% of the sums from the first to the second pillar and which does not meet any of the criteria applicable to rural development policy, is unacceptable.
I recognise that the European Commission has attempted, in its proposal for a regulation, to manage this tool, but I share the rapporteur's concerns and I endorse his proposal that it be rejected: the risk of distorted competition is too great if certain Member States choose to deduct 20% from direct aid and not from other types of aid. It is unacceptable for this voluntary modulation not to have to comply with the same rules as those that normally apply to rural development, and the risk of the CAP being renationalised is too great.
The funding requirements for rural development policy are, however, real, and I fear more people abandoning our rural areas. That is why I am calling on the Commission to propose, instead of voluntary modulation, an identical increase in the rate of compulsory modulation in all of the Member States.
I should also like to stress that compulsory modulation currently applies as soon as a farm receives more than EUR 5 000 in agricultural support per year. The large majority of farms are, indeed, affected.
If we are to have a genuine tool for redistributing aid, we should also take account of other criteria, such as the size of the farm, its dependence on aid, the workforce employed, the standard gross margin, and so on. Furthermore, if we are to guarantee that agricultural support is divided up fairly, we should think about capping direct aid.
Elspeth Attwooll
Mr President, I speak on behalf of the UK delegation in my group. We fully understand the cogency of the arguments in the Goepel report and the reasons for the Committee on Agriculture and Rural Development's voting indications. However, the approach of successive Westminster governments to EU rural development funding has restricted its availability in the UK. Our allocation for 2007 to 2013 is only a quarter of what fairness would in principle require.
In default of some further degree of modulation, there would be severe constraints on establishing and maintaining effective rural development programmes, particularly in relation to the environment. There is also a risk of delays in making some of the payments of which farmers have a legitimate expectation.
I am grateful to the Commission for its willingness to explore the ways in which it might be possible to overcome such immediate practical problems, but that can only be a stopgap. We need a much longer-term solution. We therefore call on the Commission, as a matter of urgency, to find a way of redressing the current historical imbalances in the allocation of rural development funding.
As a Scot, I ask that, in any further discussions on modulation, both the Commission and colleagues on the Committee on Agriculture take account of the fact that the levels are of concern not only to Member States but to administrations at sub-state level as well.
Mieczysław Edmund Janowski
(PL) Mr President, in thanking both of our colleagues for their work, I would like to focus more closely on Mr Mulder's report. We are raising a question that affects the mechanism of funding designated for areas inhabited by some 20% of the population of the European Union, but which are very important as regards secure food supplies for Europe.
We therefore need to do everything to strengthen the position of rural areas and secure the cohesion that we are supposed to provide. The European Agricultural Fund for Rural Regional Development should also serve this purpose. This is essential for all countries, including my own country, Poland. Although today we are debating changes to the regulations affecting Portugal - which I support - we need to stress clearly that this has upset the sequence of things. First of all the procedure should be set out, and only then the specific financial decisions made.
Therefore, let us treat this as an exceptional situation and look for systemic solutions which, based on as objective and non-discriminatory criteria as possible, will really strengthen European farming. Any other course of action may end up by destroying European solidarity in this area.
Czesław Adam Siekierski
(PL) Mr President, in order to keep European agriculture competitive, we must maintain the current level of direct farm payments in the old Member States, and not introduce the additional modulation of 20%.
The arguments put forward by the European Commission are unconvincing, while the proposition does not conform to the principles of the CAP. The new Member States need more funds for the development of rural areas, for reasons which include reducing the labour-intensity of farming and to speed up the transfer of land from social and small farms to large-scale market farms. This will improve the competitiveness of farming in the new Member States, mainly through economies of scale.
Instead, what has been done? If you remember, the new financial perspective adopted for 2007-2013 cut the rural development funds by 20 billion euro compared to what was proposed by the Commission. We must apply different methods of support, because there is a distinction between the countryside and farming in the European Union. Rural areas in European Union countries, including Poland, are poorer than the cities, and need more jobs, the development of services and better environmental protection. For this reason we need to support farmers and the countryside throughout the European Union for many years to come.
Luis Manuel Capoulas Santos
(PT) I should like to congratulate Mr Mulder on his admirable report and to thank the members of the committee, who voted unanimously to adopt the report.
The decision to exempt Portugal from cofinancing for the amount of EUR 320 million is a fair one and comes on the back of a number of Council decisions aimed at offsetting the recognised difficulties faced by Portuguese farmers in relation to the CAP as it stands, whereby farmers have been manifestly penalised. This is a way of compensating them.
As for the Goepel report, regrettably I am not able to extend the same congratulations, because this is an eminently political matter and we must use political arguments to discuss it. We all know that the CAP unfairly works against various Member States, various regions and many farmers, and one way of correcting that injustice is to apply modulation mechanisms.
In the case of Portugal, this distortion is utterly scandalous; just 5% of farmers receive more than EUR 5 000 per year. Consequently, given that voluntary modulation is possible and that compulsory modulation is currently impossible, voluntary modulation is preferable to having no modulation at all.
I therefore feel that the positions that have come to light are deeply inappropriate. I should like to reassure the Commissioner that she is not alone in defending this position in Parliament. I believe that, in the interests of justice, it is only right that funds be given to the Member States. I should like to draw Mr Nicholson's attention to the fact that it is not only the United Kingdom that will apply the measure; the Portuguese Government has already announced that it will do so. I feel, therefore, that not allowing the Member States to use this instrument to do the right thing in relation to many farmers who are unable to receive a single cent under the first pillar of the CAP, or restricting their ability to do so, is a totally inappropriate position for Parliament to take. I say this solely on the basis of political arguments because I have neither the time nor the desire to discuss legal, technical and other aspects of the issue.
Neil Parish
Mr President, I should like to thank Mr Goepel and Mr Mulder for these reports.
Commissioner, you know very well that your heart is not in this and that you are having to do the Council's bidding. This is a complete mess. You have a lot of support here in Parliament. In fact, the Council has managed to unite the whole Parliament against this proposal. When we vote tomorrow we will reject it, it will go back to committee and we will reject it again. So I urge you to come forward with a new proposal.
When I first came to the European Parliament, my farming friends told me the one thing they wanted out of Europe was a level playing field. That may be a forlorn hope, but this proposal makes it less level than it has ever been. I do not need to tell you, Commissioner, that the British Government is about to be fined for not meeting the deadline for the Single Farm Payment Scheme. So what do you do? When it cannot make the payments on time, you give it more rural development money to squander. You can imagine how much confidence farmers have in the Government to deliver that at the moment.
As I look across the House tonight, it is interesting that there is not one member of the Labour Party on the Socialist benches. Who is here to defend Mr Blair's proposal? No one. So look to us for help.
As Mr Stevenson said, the government is putting enormous pressure on us to say that we are against environmental schemes. Can I put it clearly on record that we are not, and nor is the Commissioner. But we need to move forward with more money going from the first to the second pillar, all across Europe; a compulsory modulation on a level amount. Also, as other speakers have said, there has been no proper impact assessment of this proposal. It cannot possibly go forward.
The cotton regime was scrapped after a ruling by the European Court of Justice.
Please think again and come back with a new proposal.
Gábor Harangozó
(HU) Mr President, the use of the current Community payments, when placed alongside the decision of the European Council taken in December 2005, according to which Portugal receives special treatment through an exemption from the cofinancing requirement, raises serious questions about the budgetary decision-making process.
In spite of the fact that there is broad agreement on the exceptional exemption of Portugal from the cofinancing requirement, questions and problems of legitimacy may arise in relation to the horse trading methods of negotiation engaged in by the Council.
Although I do not oppose this one-time concession offered to Portugal, I consider it important that in future no Member State be allowed to benefit from special treatment solely in order to persuade it to support a particular agreement. On the contrary, equality and transparency are fundamental criteria that should be observed in all circumstances, and at every level of negotiation with the Council.
In future, not only must we prevent these forms of positive discrimination, but since we have committed ourselves to an egalitarian agricultural policy, then the regulation of rural development should not be permitted to rely on exceptions. We need to put an end to all forms of discrimination.
I agree with the rapporteur that the system should not make any distinctions or exceptions, but that we need a fair, standardised approach that distributes resources on the basis of objective criteria. However, I do not agree with the rapporteur that it would be a good solution to finance the direct payments in the first pillar, because although this would lessen pressure on the European budget, it would cause serious financing problems for the new Member States, which are in a strained budgetary situation because of the convergence programmes necessary for the introduction of the euro. As a result, this would further increase inequalities among Member States.
For the same reason, I do not consider voluntary modulation to be the most appropriate solution. Apart from respecting current agreements, in future we must strive to create a truly united rural policy instead of making further exceptions.
Mairead McGuinness
Mr President, I should like to thank both rapporteurs for their reports. When I reread the Presidency Conclusions, these seven lines of text read worse now than they did almost a year ago. It is literally a free-for-all for any Member State that wants to take it up and it has no regard for the rules that this House, and indeed the Council itself, had drawn up in relation to rural development. Voluntary modulation as outlined in this proposal is anything but voluntary, because the farmers certainly do not want it. Therefore we are misusing and abusing words.
Of course this proposal distorts. It has to, because it is allowed in one Member State but it may not be applied in others. We need to look at the impact of this on agriculture generally.
I am also conscious that we are looking towards a health check for the CAP in 2008 and, in parallel with that, a review of the financial perspectives.
I should like to compliment the Commission on trying to make something good out of what is essentially a very bad proposal: the Commission is trying to get rules applied and is insisting that they be implemented; it is excluding market support measures.
I shall conclude by saying that it is very difficult to make something good out of essentially a poor suggestion, or, to use an agricultural term: you cannot make a silk purse out of a sow's ear. I compliment the Commission for even trying to do so. This is a bad proposal and we will be rejecting it.
Esther Herranz García
(ES) Mr President, the proposal that we are debating today is unacceptable. It is unacceptable because it is disintegratory, fragmentary, anti-European, selfish and highly hypocritical.
From the point of view of agricultural theory, it involves cutting 20% of direct aid to farmers in order to fund rural development and thus fill in holes. These holes were created because, in the financial perspectives, 1% is not sufficient to fund the agricultural policies, and as the Member States are incapable of giving more money, they have to take it away from those who were receiving it until now.
It also represents the renationalisation of the common agricultural policy: getting rid of the only truly European policy, the only policy that united European producers. And not only does it mean renationalisation, but, if we look at the proposal by the Spanish Government to the Council, it means going much further: not only renationalising, but regionalising. This way everyone will be able to do what they want.
I think that it is part of the disintegratory madness of the socialist Spanish President, who, Mr Parish, also has no one here to defend him, because he, along with all the presidents who signed the financial perspectives and accept this change, do not care at all about the competitiveness of the European agricultural sector and the impact that these measures may have on their economies is of little importance to them.
Therefore, and in defence of European farmers and livestock breeders and of the sector, we will of course reject this proposal.
James Hugh Allister
Mr President, I apologise for not being in the House when I was first called but my travel arrangements went rather awry today.
Voluntary modulation is but fancy phraseology for a very unpleasant practice, namely government grab of farmers' money. As Mrs McGuiness has said, there is nothing voluntary about it, certainly in respect of those from whom the money is to be extracted, namely the farmers.
The consequence is a very unbalanced rural development programme right across Europe, both in how it is financed and then in how it is delivered. That, of course, is then discriminatory against the farmers in those Member States that practice this madness of voluntary modulation. In my country we are already seeing the consequences, with delays in the intended LFA payments.
Voluntary modulation is something to be resisted. I welcome the stance of the committee and the stance of this House when it rejects it and I urge the Commission to be robust in forcing a change of policy by the Council on this matter.
Mariann Fischer Boel
Member of the Commission. Mr President, I have listened to the debate carefully and with huge interest. I can only repeat what I said at the outset, i.e. that the Commission proposal is consistent with the European Council's request.
As Mrs McGuinness rightly said, we have tried to align it as much as possible with the existing rules on obligatory modulation and financing of the rural development policy.
Tomorrow, if - or I should say when - the European Parliament rejects the Commission's proposal, I intend to raise the issue with my fellow Commissioners in order to consider our position carefully. That is completely in accordance with the framework agreement between our two institutions.
President
Thank you, Commissioner, that was very clear. I thank all those who took part in the debate. I should also like to thank all the interpreters.
That concludes the joint debate.
The vote will be tomorrow.
