“Opportunities and Challenges for European Farmers after 2020” DIS(17)3880:1 “Opportunities and Challenges for European Farmers after 2020” Sofia Björnsson, Copa and Cogeca, 18th May 2017, Plovdiv (Bulgaria)

Importance of a strong CAP The future CAP Objectives of the CAP Importance of a strong CAP Main elements to ensure a more Sustainable European Agriculture Possible timeline for the future CAP

Who are Copa and Cogeca? Two organisations…. Copa Created in 1958, Copa represents 23 million European farmers and family members. Cogeca Created in 1959, Cogeca represents 22, 000 European agricultural cooperatives. Copa and Cogeca In 1962, a joint Secretariat was created, making it one of the biggest and most active lobby organisations in Brussels

Objectives of the CAP The current objectives of the CAP as stated in article 39(1) of TFEU are still quite valid and must be maintained. The CAP contributes to a stable rural environment and employment for the 40 million people working in the agri-food chain. This is very important at a time of severe unemployment in the EU. CAP must continue the market orientation of previous reforms. However support is needed for a number of public goods & services provided by farmers that cannot be remunerated by the market.

Importance of a strong CAP (1) The EU must secure common funding for common policies. The CAP costs less than 1% of total EU public spending. The next EU budget must ensure, at least, the maintenance of the current CAP funding. A properly financed CAP will ensure a strong, economically viable and competitive agriculture for the benefit of consumers and farmers. CAP support must focus on active farmers – those who actively contribute to a sustainable sector and provide public goods. The future CAP must focus on improving the current policy measures – it’s an evolution, not a revolution!

Importance of a strong CAP (2) Both Pillars of the CAP are important and they have specific objectives. Pillar I is the basis of the common EU approach across all farms, ensuring sustainability, viable food production and food security. Pillar II provides tailor made solutions at farm level, from investments to specific measures that respond to societal expectations. The subsidiarity part is the core element of the Rural Development policy which allows Member States to better target support whilst maintaining the element of communality of policy that is so important.

Main Elements to ensure a more Sustainable European agriculture Simplification Sustainability, climate change and SDGs Improving market resilience and risk management Strengthen farmers’ position in the food supply chain, supporting agri-cooperatives and POs Rural Development and Cork 2.0 Investment support and improving infrastructures (EFSI) Generation renewal including access to land

A more Sustainable European Agriculture (1) 1. Simplification The CAP reform of 2014 is overly too complex. In particular on greening even if farmers have supported it, its implementation is not simple nor straightforward for them. We support Commissioner Hogan’s exercise to simplify the CAP but more must be done. The future CAP must deliver a common, simple, less bureaucratic policy that better responds to the challenges of the agricultural sector.

A more Sustainable European Agriculture (2) 1. Simplification (cont.) Control systems both in Pillar I and II need to be simplified as they are extremely complex, time consuming, bureaucratic and cause farmers unbearable risks and uncertainty. Sanctions must also be revised and simplified as they are too complex and not proportionate. Need to use digital tools, remote sensing and ICT to simplify checks & controls in agriculture. If the CAP is not significantly simplified the sustainability of the sector is at stake.

A more Sustainable European Agriculture (3) 2. Sustainability All three dimensions of sustainability (economic, environmental and social) must be addressed and in a balanced and equal manner. Farmers as land managers play an active and relevant role in contributing to environmental sustainability. Only through farmers efforts both in adaption and mitigation can we ensure a sustainable and competitive agri-food chain that provides safe, quality and nutritious food to consumers in Europe and elsewhere in the World.

A more Sustainable European Agriculture (4) 3. Improving Market Resilience & Risk Management Farmers and agri-cooperatives have been facing, in recent years, greater market fluctuations and natural risk than any other sector. Greater market volatility; more exposure to new animal and plant diseases; and the increased frequency of extreme weather events due to climate change have been the leading factors. Production costs have been on the rise and they further accentuated the price/cost gap facing farmers. This combined with three successive years where farmers income at EU level has decreased has led to a difficult situation at farm level. Causing market disruptions and low levels of prices resulting in an extremely low level of cash-flow for farmers across the EU.

A more Sustainable European Agriculture (5) 3. Market Resilience & Risk Management (cont.) Decoupled direct payments provide stability, certainty in face of market volatility and make a significant contribution to secure liquidity, regardless of the size and management form of the farm. Direct payments should be granted only to active farmers (whether part –time or full-time) rather than non-farming land-owners. Coupled support could be considered under precise and limited conditions (especially for livestock in regions where other measures are less efficient). Direct payments are still the main tool to support and stabilise farm income.

A more Sustainable European Agriculture (6) 3. Market Resilience & Risk Management (cont.) It is necessary to maintain and improve the current measures to cope with market volatility – direct payments, market safety nets and risk insurance. Need for speedier activation and in their results. Need for new risk management tools that must be complementary and voluntary and provide farmers a toolkit to cover economic, climatic, sanitary and other risks. Derivative markets and futures markets can play an important role to reduce the impacts of price volatility. Farmers and agri-cooperatives must be allowed to engage in forward trading. Futures markets should also be extended to other commodities

A more Sustainable European Agriculture (7) 4. Strengthen farmers position in the food supply chain, supporting agri-cooperatives and POs Build upon the recommendations of the Agri Markets Task Force and the December Council Conclusions to strengthen farmers position in the food chain. Take additional steps to support agri-cooperatives and POs by removing blockages that prevent the full use of agricultural cooperatives and other types of POs to improve the functioning of the food supply chain. Measures supported must go beyond the simple concentration of supply to supporting processing and generation of added value and placement on the market. These should be non-distortive from a competition policy angle and should contribute to a well-functioning Single Market. Need to look at an update of the Competition policy.

A more Sustainable European Agriculture (8) 5. Rural Development and Cork 2.0 Rural Development policy provided the tools and support for farmers to deliver public goods and services to the society. It also contributes to a competitive and market oriented agriculture and forestry sector. Rural Development must continue to focus on farmers as they are the backbone of the economy in many EU Member States, When implementing the Cork 2.0 Declaration the focus should be on Sustainable and Smart agriculture and forestry and Simpler EU and national policies – the 3S. The 4 main blocks of the Declaration must be at the centre of the 3S approach.

A Sustainable European Agriculture (9) 6. Investment support & improving infrastructures (EFSI) In addition to the investment support under Rural Development, secure EIB’s role as facilitator of access to credit to the agri-food. The EIB should continue to design and develop simpler, more flexible and targeted financial instruments (FIs) for the sector. These FIs must be complementary to the use of grants under Rural Development and not instead of them. Guarantee the functioning of EFSI as a driver for infra-structure development across the EU but, in particular, in the most recent EU Member States. Special attention should be paid to the discussions of Basel 3.5 so that it doesn’t impact negatively both in the access to and the cost of credit for the agri-food sector.

Last but not least!

A more Sustainable European Agriculture (10) 7. Generation renewal and access to land Risk of depopulation in rural areas due to the increasing age of farmers and insufficient entry of younger farmers to the sector. Need to develop specific and more targeted measures to promote and facilitate the set-up of younger farmers. The level of support should be high enough to attract younger farmers to start their activity or take over a farm. Need for accompanying tools such as advisory (technical and business), networking and training services (including vocational training).

Possible Timeline for the future CAP Public consultation on modernising and simplifying the CAP: from 2nd February to 2nd May 2017. DG Agri Conference to present the outcomes of the public consultation: 7th July 2017. Communication on the future CAP: expected in November 2017. Legislative proposals on the future CAP: expected in Jan./Feb. 2018. Brexit: Article 50 activated on 29th March; Exit by April 2019 (???) European elections: May 2019. New European Commission: Nov./Dec. 2019 Conclusion of the negotiations on the future CAP: ???