One of the priorities of the Austrian Presidency of the Council is a revision of the EU Strategy for Sustainable Development of June 2005 in keeping with the Lisbon Strategy, which aims to make the EU the most competitive and dynamic economic region in the world by 2010, and in response to increasing global integration. The ministers of agriculture held a policy debate on this topic and Council President Josef Pröll will include the results in the proposals of the Austrian Presidency for the European Council in June, where the new sustainability strategy of the EU is to be adopted.
The Austrian Presidency is conducting the discussion in all Council formations on the basis of a questionnaire devised by the Council working group “Friends of the Presidency” and of a communication from the Commission of December 2005. This is designed to underline the horizontal character of the sustainability strategy, cutting across all policy areas, and to ensure the coherence of the measures.
Several ministers of agriculture stated that the recent reforms of the EU common agricultural policy and of the common fisheries policy represent significant achievements towards sustainable development, notably the introduction of cross-compliance and modulation. In addition, the work in the Council on the new organic legislative framework and the biomass action plan, as well as the regulations for the protection of geographical indications and designations of origin and traditional specialities, is contributing to the sustainability goal. A number of ministers remarked that the renewal of the sustainability strategy should not be carried out at the expense of EU agriculture and fisheries, since third countries do not generally comply with comparable sustainable development principles.
The time is running out for WTO negotiations
Fischer Boel informed the Council of the status of the WTO negotiations. On 10 March the six most important trading nations, the G6 (EU, USA, Brazil, India, Australia, and Japan) met in London. Under the chairmanship of the EU Trade Commissioner Peter Mandelson, the G6 chiefly discussed access to the market for non-agricultural products (NAMA) and agriculture. However, no significant progress was made in the area of domestic subsidies, export competition and NAMA. The Commissioner stated that the progressive reduction of export refunds offered by the EU by the year 2013 should be based on value rather than on volume. In addition she made clear that the offer tabled by the EU will create real market access for third countries. On the subject of geographical indications, she reiterated the importance for the EU to see these extended beyond wines and spirits and codified at WTO level. She emphasized the need for a balanced and global solution and called for unity and solidarity among Member States. The schedule for reaching an agreement by the end of April was extremely tight. For this reason, a special session in the week of 17 April will have to deal successfully with the topics of NAMA, domestic support and market access.
Memorandum: Insurance scheme to prepare farmers for the pressures of competition
France submitted a memorandum to the Agriculture Council that provides for amendments to the CAP reform of 2003 to enable farmers to withstand the growing pressures of competition. Among other things, it calls for the creation of insurance schemes for farmers to protect them in future against increasing price and income fluctuations due to the reform. For instance, the second pillar of the CAP, rural development, should permit the co-financing of price stability funds with EU money. In addition, there is a need to simplify the administrative requirements, for instance for cross-compliance and state support. Decoupling of direct payments is seen as a key factor in making the CAP fit for the future.
Finance discussion: Total agricultural expenditure in the EU is lower than research expenditure
In connection with the recurring debate on the financing of the CAP related to direct payments, the memorandum states that further curtailment of the EU agricultural budget must be prevented. In the meantime, only 0.43% of the gross national income (GNI) in the entire EU is spent on agriculture, whereas for research, the expenditure is already 2%. In addition, the memorandum warns of distortion of competition by a re-nationalisation of the CAP and therefore opposes national co-financing of the direct payments that are seen by some countries as a possible way out of the finance debate. A majority of 15 of the 25 delegations supported the French paper. The continuation of this CAP debate will be at the centre of the informal meeting of Agriculture Ministers under the Finnish Presidency in September.
Commission points to existing and future proposals for simplification
Fischer Boel referred to existing Commission proposals for the simplification of the CAP, in particular cross-compliance, and announced that there would be a proposal for reform of the banana market organisation in June 2006. Proposals for wine, fruit and vegetables are to follow at the end of the year. She said the proposal for a single market organisation for all agricultural products is a further significant step toward simplification.
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