More emphasis needed on boosting profitability and productivity of EU agriculture sector

This is crucial if there is going to be enough food to feed the world’s growing population at a price which people can afford. Farmers are facing more challenges, including extreme volatility on agricultural markets, rising input costs, more extremes in weather as well as long term changes in climatic conditions. They will have to adapt, invest and modernise to meet these combined challenges. That is why the future CAP must focus on improving the economic performance of farming families and agri-cooperatives to enable them to get a better return from the market. We are concerned that the Commission’s proposals, which propose further mandatory environmental constraints on farmers making up to 30% of farmers direct payments dependent upon complying with environmental conditions, will not achieve this and will just add more costly burdens onto EU farmers, thus threatening their competitivity and economic viability. Farmers are already doing a lot for the environment and are willing to do more. But it must be based on win-win solutions for the both environment and growth. Farmers must be able to choose the measures which are most appropriate for their farm.  
 
Measures to promote green growth, which Copa-Cogeca is proposing, is the only way forward. Copa and Cogeca do not believe that it makes sense to require every single farm to stop producing on a certain percentage of their land when world food demand is set to rise by 70% by 2050 and production is threatened by more extremes of drought, flooding and storms. This has also been supported recently by many EU Agriculture Ministers and MEPs. Furthermore, the EU Commission proposal on the CAP post-2013 runs counter to the Commissions’ 2020 strategy for growth and employment.
 
The EU agriculture and agri-food sector ensures employment in EU rural areas for around 40 million people, providing the heart of rural areas,  and ensuring high quality food for 500 million consumers. Yet EU farmers’ income is on average only half that of average earnings. This is why it is essential that direct payments to farmers are maintained if the agricultural sector is to continue to assure these benefits. Currently, many young farmers are not willing to take over from the farm and older farmers are leaving the sector in view of the drastic economic situation. This is not sustainable or acceptable.  The real obstacle for young farmers is the lack of access to capital, poor returns from the market and the resultant low level of profitability of farm businesses.
 
We support the principle that CAP payments under the first pillar go to active farmers but the definition proposed by the Commission is not satisfactory. A very positive element in the Commission’s proposal is the introduction of European Innovation Partnerships to help improve links between researchers, farmers and advisors.We also need efficient and flexible measures to manage the market. These are crucial in view of the increasing market volatility. But we are concerned about the Commission’s proposed market measures.  Simply maintaining existing safety net measures, as proposed by the Commission, will not be adequate given the prospect of increasingly volatile markets. The level of the current safety nets has remained unchanged for over a decade while farm costs have risen rapidly. As a result they no longer even cover production costs of the most competitive producers and will therefore not enable producers to survive crises. We repeat our call for safety nets to be reinforced and updated to ensure they enable producers to cope during periods of low market prices and/or rapid increases in costs.
 
In addition, it is essential to strengthen producer organisations (POs) position in the food chain to meet the increasing world food demand. Farmers are currently up against the huge buying power of a few supermarkets and only get a fraction of the retail price. This situation must be improved in the reform.  They must get a better return from the markets. We welcome as a move in the right direction in the Commissions proposal the extension of the product coverage for recognition of producer organisations and their associations, as well as interbranch organisations, in addition to the Commission’s proposals for the milk sector. But we are very concerned about the fact that there is not a clear definition of a producer organisation in the EU Commissions proposal. It is also paramount that EU competition rules are adjusted to help producer organisations, such as cooperatives, to grow in size and scale.
 
The CAP is the only truly common policy and has made an important and successful contribution to the construction of Europe. Copa-Cogeca wants to ensure in the future the maintenance of a strong, dynamic, innovative CAP, with a strong EU budget behind it. We will continue to fight for this and call on EU Ministers, MEPs and the Commission to ensure that there is a profitable EU agri-food sector in the future, contributing to flourishing EU rural areas.


COPA-COGECA (Committee of Professional Agricultural Organisations - General Committee for Agricultural Cooperation in the European Union) is a EU farming representative organisation, recognised as one of the main representative bodies and the spokesman for the agricultural and fisheries cooperative sector.