29 May 1998

WHATLL BE NEXT IN THE DEBATE ON AGENDA 2000?

How will you respond to the Agenda 2000 reforms?

Julian Gairdner of Strutt & Parkers farming department

examines the proposals and gives an insight into what

Strutt & Parker will be offering at Cereals 98.

THE WINDS of change are once again blowing through the corridors of the European Commission. Six years have passed since the MacSharry reforms and from the pressures on the existing arrangements has spawned Agenda 2000 – Mr Fischlers "way forward" for the next century.

With the proposals formally adopted on 18 March, Strutt and Parker has been monitoring closely further developments in Brussels and Agenda 2000 will be the cornerstone of its stand at Cereals 98.

Robert Gooch of Brussels-based Eurinco will give farmers a daily update of the latest proceedings and the timetable for negotiations. Mr Gooch will be presenting his talk on both days of the event and will outline the key areas of the reforms and the reasons behind proposals.

There are six key reasons why reform is needed:

&#8226 Increase competitiveness.

&#8226 Ensure the best food safety/quality standards.

&#8226 Provide a fair standard of living for the rural community.

&#8226 Meet new environmental goals.

&#8226 Encourage employment in rural areas.

&#8226 Simplify the CAP.

There is also a desire to:

&#8226 Extend the boundaries of the EU to include new members.

&#8226 Align the CAP with the next round of WTO negotiations.

With all that in mind reform in the arable sector is set to:

&#8226 Cut cereal intervention prices by 20% in 2000.

&#8226 Create a single rate of payment for all previously supported crops of 66 ecu/t or approximately £272/ha (£110/acre).

&#8226 Include an additional payment for proteins of about £27/ha (£11/acre) on top of the standard rate.

&#8226 Retain set-aside as an emergency measure, but fix the compulsory rate at zero %.

&#8226 Retain voluntary set-aside, with member states deciding on a maximum of 10-50%.

The proposed new framework also introduces modulation, cross-compliance, degressive payment ceilings and agri-environment schemes. Taken one at a time these are:

1.) Modulation

Payments to farmers can be reduced by up to 20% according to employment based criteria. These can be set by member states within broad European guidelines

2.) Cross-compliance

Payments can also be reduced by member states if farmers do not conform to environmental rules set by each state according to European guidelines

3.) Degressive ceilings

These will be applied such that the first 100,000 ecus (approx £70,000) of payment will be received at the full rate. Payments will then be cut by 20% between 100,000 and 200,000 ecus and by 25% over 200,000 ecus

4.) Agri-environmental schemes

Farmers will be able to "recoup" the aid lost through modulation and cross-compliance by participating in agri-environmental schemes. Aid lost through the imposition of degressive ceilings will disappear from the system all together

So, what does all that mean? Will the objectives of reform be fulfilled and what will be the impact on UK farmers?

Negotiations for Agenda 2000 are complex and highly political. The ability to respond to change will lie in farmers ability to understand the direction and intentions of CAP reform. There will be clear winners and losers among farmers when the Agenda 2000 proposals are finally agreed and implemented.

The reforms will underline the importance of each member states interpretation of the rules more than ever before and place more responsibility with national governments and arguably remove the "level playing field" if indeed such a thing exists. The reforms will also create new opportunities for farmers, require them to be more efficient and increasingly responsible food producers. Furthermore, farmers will have to meet the environmental objectives specified to sustain rural areas in the longer term.

Agenda 2000 proposals are a clear indication of the future for agriculture in Europe over the coming years. While there is still much negotiation to come, it is right for the real debate to be taking place on the ground among the people who will be affected the most.

Strutt & Parker will provide such a forum for discussion on its Cereals 98 stand.