Committee on Agriculture and Rural Development Ordinary meeting
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AGRI European Parliament
Follow its sittingsSpeaker 4
And as a result of that, we've produced some dashboards which will allow you to explore, at a member state level and for particular sectors of agriculture, what has actually been happening from an income point of view over the last few years. So I would encourage you to explore that in due course. Another point we would make is that inflation eroded the real value of income quite significantly over the last few years. We had much higher inflation in Europe, close to 4.5% per year, in recent years, when the normal target rate of inflation is more like 2%. So this eroded farm incomes, it also, of course, eroded the value of support payments, which are generally fixed in nominal terms.
Now there were other supply and demand factors as well, influencing how particular sectors have developed from an income point of view over the last few years. Notably, in the dairy and beef sector, for example, we've seen significantly higher prices for milk and significantly higher prices for beef also. So these were also factors that complicated the storyline. And with that, I will now pass you over to my colleague, Ruel, who will take you through the second half of our presentation.
Speaker 6
Thank you, Trevor. What I would like to add is the, say, the policy part. And what you'll see is that the EU has a wide set of, you know, farm income support tools that, since its initiation, have also been targeted to both income support objectives and other policy objectives like sustainability, think of the eco scheme or the agri-environmental payments, protection for vulnerable sectors, think of voluntary couple support, risk and crisis phenomena. What we also see is that the common agricultural policy is in the budget, in combination also with the supplemented national funds. In the study, we make a detailed analysis of the role of national funds or state aid that it contributes to a substantial share of farm income.
Speaker 5
Roughly, on average, about one third of the farm income is dependent on this support, with a lot of variation and differentiation between sectors. Another observation that we make is that there is a strong linkage between income support and farm size, as is illustrated with the table, which you see below on the slide, which has, say, some farm size classes. And in the columns also, it gives an indication of the beneficiaries and the share of direct payments going to these different size classes. And one observation which you can deduce from this is that the amount of support per farm is small for small farms, but it is very large for large farms, suggesting that the discussion of a better alignment may also be justified here. In the study, we made an assessment of different policy support measures for supporting farm incomes, and you'll see them here in the box.
In total, we looked at 13 different policy measures and sometimes also implementation modalities, which are heavily used by the EU, but we also took into account other policy measures. For example, we have the countercyclical payments, which were heavily used by the U. S. We have price support, which had been used in the past by the EU, which now, for example, is used a lot by a country like China. We have a farmer precautionary savings account, an instrument used in Canada.
And for all these instruments, we looked to the transfer efficiency, the targeting efficiency, and the transaction cost. And from this, there we had actually three key observations. On the one hand, the direct payments score high on transfer efficiency, which means that if you spend €1 on this scheme, a relatively high share of this euro enters the pocket of the beneficiary. But what we also observe is that, with respect to the targeting, there are improvements possible. Although, over time, there have already been improvements.
There could be further improvements to farmer needs. Then with respect to countercyclical payments and insurance schemes, we see that they are doing quite well with respect to that they address the adverse events. However, they have faced higher transaction costs. And one of the things we also observe is that they're at the share of adoption. Their adoption rate is actually lagging behind the EU ambitions, while there is a clear need that these payments are addressing.
Then with respect to crisis reserve, it addresses deep loss. So you need them, I think, for special, extreme events, and they have relatively low transaction costs. What we also, the report, are doing, looking into, how to improve, the policy support, better align it with the needs of farmers rather than linking it exclusively to farm size. And for this, we made actually two distinctions, as you'll see them in the matrix, say, in the right part of the slide. On the one hand, we classify the support in three groups: direct income support, support for innovation, and transitional support.
And we also classified farmers in three groups. First, we made a distinction between what we call viable farms and non-viable farms. And then with respect to the viable farms, we made a further distinction between viable farms, which are in direct need for income support, and viable farms, which are not in direct need for income support. And making this combination, as you'll see in the table, this framework could help us to think about how to improve the targeting. Now that could be, for example, an option would be to focus the direct income support more on the viable farms which are in direct need, to focus support on innovation.
Let's think of a farmer's investment in enhancing their future productivity, focus that support on all viable farms because they need to stay competitive and make the changes also with respect to sustainability, and have transitional support focused on the nonviable farms, helping them in the most adequate way. Of course, we realize that, and you see that also in the dotted red lines that to make operationalize these criteria, that's not trivial, and that's, of course, also a political issue. But at least as a way of framework for thinking, I think it is a promising way to approach the issue. Some final considerations to close with. With respect to the targeting of support, what we see is that, say, pivoting away from farm size-based support to support measures, which are more aligned with farmer needs.
That that's a direction to further consider. And also in line with the debates that have been there since a strategic dialogue is emphasized at this point. The vision of the commissioner on food and agriculture actually put emphasis on this point. And also in the recent proposals that were launched for the new cap on the last year actually also addressed this issue with specific elements like capping and active pharma criteria. With respect to risk management tools, we observed that they fulfill a clear need.
And with the increase in volatility, they are becoming more important, you would say, but the adoption rates lag behind. So for that, we think it would be good to consider further measures to improve them, let's say, the subsidization or make simple administrative procedures, educate farmers, and have the supporting farmer advisory system. Then we close with some challenges. One was already mentioned by my colleague. We are doing this study in the context of price increases and inflation.
While the support is often denominated in nominal terms and fixed, when you would index this support, it would protect its real value. And there is also the say the power as an instrument to support farm incomes. Otherwise, it might erode over time. And as a final point that was already raised also before, we think that timely information is very important, in particular, when there are shocks. And there are also, we show in the study, there are also ways to improve on this, although it remains to be a difficult issue.
And with respect to the selection and implementation of support instruments, yeah, the care should be taken with respect to, say, the administrative implications and also how you verify their effectiveness. Thank you for your attention.
Daniel Buda
Thank you very much indeed. I will shortly be given the floor to the coordinators, but I'd like, in the meantime, to welcome mister Nardella's guests who are from the Toscana regional council, mister Leonardo Amaras, and a number of colleagues are also with him. So you're very warmly welcome to our meeting.
Thank you to the presenter.
Herbert Dorfmann
Thank you very much, chairman. Thank you for the presentation of the study, which is extremely interesting. It goes right to the heart of the topic, which we're going to be having over the months to come. How are we going to address first pillar payments, and how are we going to do this in the most even-handed and fairest balanced way? It's not just a question of square hectares or size.
These are not necessarily the right criteria for allocating support. So we need to look more widely. We can't have one single index, and this is where this study is extremely useful in other ways as well. I have a couple of questions. First of all, disadvantaged areas.
You've talked about this in your study and said that we need to focus on them. I wonder whether you've looked at the cost differentials. I think that this is actually a critical issue when it comes to disadvantaged areas. Looking at income, it isn't necessarily directly correlated to input costs. So that's something that I think we could usefully focus on, whether input costs are also eroding income, and what we could potentially do there.
You talked about the size of farms, but you didn't necessarily talk about the level of agricultural activity per se. I think it is in certain places in Europe, anyway, the case that individual farmers and cooperatives are actually playing quite a minor role in land management. And I think we need to identify areas where on a farm there really is effectively no farming still going on. That's something that would be useful because that has an impact on calculating relative incomes too, and as a factor for calculating support. So we, I think, need to evaluate the level of agricultural activity and look at whether we could have investment funds to support areas of higher activity where they need it.
And then finally, the models are, of course, a good basis, but that leads to more bureaucracy. And you talked about transit transaction costs. I wonder how far you've broken that down, and how far you might be able to differentiate between various component factors. There are the transaction costs, is it bureaucracy or the administration? How much money do you think is actually being swallowed up between the on the way between the actual disbursement of the payment and the deployment of the sums by the farmer?
Daniel Buda
Thank you. Thank you, chairman. I'm going to speak Italian, of course. I do, of course, would like to extend my personal thanks to the agriculture delegation from Toscana led by the chairman. I'm delighted that they've been able to come here and that they're here for this important discussion.
Dario Nardella
This is an extremely important, topical, and interesting study. It makes it quite clear to us that coupled support can actually be an extremely useful instrument in supporting vulnerable areas and in supporting vulnerable parts of the farm economy, specific products in particular. The socialists and democrats have done some research themselves, and we have produced a document on this review of the CAP. And our view is that coupled support is something which should be expanded, because it would help to eliminate some of the bottlenecks that are caused by lack of coupling and correlation. There are a lot of challenges we need to face today.
They really are very numerous, and it is my belief that there are quite a number of farm sectors that are in difficulty. There are also areas which are affected by outbreaks of disease, for example. But I think that it is important to look at the coupled system and make it the center of our farm support mechanisms. There've been recent factors of a number of different sorts. There have been financial shocks, sadly, wars, which we've seen all too much of, climate change factors.
So there have been a huge number of disparate factors which have taken their toll on farmers, both their work operation of farms and their income. So I wonder what the commission's plans are in terms of income support for farmers, particularly in the more fragile areas and in the areas which are particularly of the sector, which are particularly important for food security. Because food isn't a commodity, chairman. It is a central topic, a central aspect of general security both in Europe and nationally. Thank you.
Thank.
Valérie Deloge
you. Thank you, dear colleagues. Many farmers work more than 60 hours a week with no holidays. Some of them can't pay themselves a salary. This is the reality that many people tell me about on the ground.
They work harder and harder to earn less and less. In France, the minimum salary is 1400 a month. The farmer's salary is less than that. Half of farmers earn less than the minimum wage. The study you've presented today confirms this.
Since 2021, production costs have soared: energy, fertilizer, animal feed. The consequence is a drop in the real income of farmers. Today, the CAP pays for a third of farmer income, but their efforts are not being valorized. We need to maintain the CAP without the cut that is being presented by the commission for the negotiations around the new CAP. We need continued support for production.
The EU has to stop being so hypocritical, imposing rules on our farmers whilst demanding that they are competitive and allowing in products that do not respect our rules. Through your free trade agreements, you're enabling unfair competition. And I call this, I think that this is abandoning our farmers. They want to be able to live from the fruits of their work. Thank you.
Speaker,
Bert-Jan Ruissen
Thank you very much, chairman. I too would like to thank those who have compiled this exceptionally useful study. It's going to be very useful to us, in particular when we come to negotiations on the new CAP. There are a few questions that come to mind for me. First of all, looking at this study, I think it's clear that the suggestion is that support should be targeted to active farmers and viable farms.
Now I do agree with that, but I wonder what criteria you're using to determine viability. Could the researchers maybe give us some of the parameters that you'd be using? I don't know what your definition of viable viability is. I don't disagree at all with the idea of that being the basis for allocating support. It would probably also enhance competitiveness throughout our sector, but I'd like to know what the criteria are.
The question two is on risk management. Again, it seems to me looking at this study that the suggestion is that we should be looking at the framework here and the basis on which we're working. Now I wonder how we can make sure that the risk insurance systems work better. So how do you envisage them being structured? What sort of compensation or reimbursements do you anticipate?
And do you anticipate them being index-linked, for example? And do you anticipate emergency or crisis reserves if there's some kind of catastrophe or emergency, and a lot of cases where farmers may need to draw on this fund? Then thirdly, a question of the more general policy of the CAP. Obviously, we're going to be taking a close look at the CAP and reviewing it, and there are those who are arguing that the member states need to have a high level of independence in allocating support, in determining the level of support, and in managing the support schemes themselves. My question to you is, how are we going to ensure that the level playing field is retained?
I don't know how you see this working out in practice, because I would be concerned that some of the provisions suggested in this report might actually undermine a level playing field. Thank you.
Daniel Buda
Next speaker, Mr. Mulrooney, please.
Thank you, chair. I welcome this study and indeed, its authors to our parliament this morning. A study provides clear and timely evidence on the reality facing farmers across the European Union. So I say thank you to Mister Donilon and indeed his colleagues, Fiona Thorne, Jason Lockrey, and Emma Dillon in Chaglesk alongside the other authors who put so much work into this. I think the study shows that farm income remains highly volatile and uneven, really, with many sectors, particularly livestock, operating on consistently tight margins despite what you read in the papers.
Ciaran Mullooly
Importantly, it confirms that direct payments have declined in real terms, as inflation has eroded their value. That's clear. And at the same time, input costs, as we all know, have surged between 21 and 24. Energy and fertilizer costs rose by up to 70% at peak, and we're now seeing renewed upward pressure on energy. Again, they tell us this morning one third of the global fertilizer is stuck in the trade up of in another part of the world where we can't get at it.
That directly leads and, of course, feeds into fertilizer, feed, fuel, and transport problems, meaning farmers are once again facing rising con costs they simply cannot control. So this study also highlights a structural imbalance for me in how support is distributed. Despite convergence and redistributive efforts, around 20% of the beneficiaries continue to receive close to 80% of the payments. So it just raises one key question. I want to ask the authors this morning, isn't it the case that supports are reaching those who need them most?
Seems to me they're not. Particularly, the smaller and medium-sized family farms are the most exposed to volatility issues. The report points to growing complexity. We know this here. Increased conditionality and administrative issues, the burden risk reducing the effectiveness of supports, and indeed, in some cases contributing to further income pressures. All of this despite the fact we're now discussing cuts to the cap budget.
Let me be very clear. This is not just inconsistent, it's indefensible. You cannot acknowledge declining real incomes, rising costs, and structural imbalances on the one hand, and then propose to reduce the very budget designed to address them on the other. So I thank the authors for their work, and I'd love if they could pinpoint for us, from their perspective, the policies they feel would bring the most immediate response and relief for our farmers. Thank you.
Tilly Metz
Thank you very much, Tichai. If we look at the current threats on farmers, we have wars, we have climate change, we have diseases in the livestock sector. And what we are doing now, even after this interesting presentation, I have more the feeling we are in French, you say, so put a plaster on a wooden leg. And don't you think that it's really time we need to create a real paradigm change? You mentioned that we need to go away from farm size support.
That's, of course, true. But is it not time to really get out of the dependency that their farmers have to live, constantly from dependency from outside on feed, on fertilizer, on energy? We are really, like, in a circle. Is it not really time for an ecological transition in the energy sector? More local feed production, less chemical fossil fuel-based fertilizers, more plant-based nutrition.
Yes. We need a protein strategy that will give us real food security. It will give back dignity to the farmers to live, yes, to live from their own production, and not give them more administrative burdens. We have here 10 different tools they have to go through in order to get their support. I mean, is that the solution?
And then we asked them. I also read in your presentation, yeah, they need to do education. They need to get advice from others how to survive. Is that really the solution? Shouldn't we definitely have the courage of a paradigm change and come finally to this very much needed ecological transition also in the energy sector?
Thank you.
For the left, please.
Luke Ming Flanagan
Thank you very much, and welcome, the authors of this report here today. And, it's an interesting report, but, obviously, with reports, they're not going to tell us exactly what's happening today, and I think that's important to point out. And when we talk about convergence and its impact between now and the end of the cap, that actually isn't accounted for here. And from looking at the figures, we're actually only looking at the second year into convergence of 5 years. So I would imagine the figures wouldn't look quite so grim, but obviously, they could look an awful lot better.
And as the last speaker said, ultimately, farmers would prefer to be able to provide everything, all the income, and they wouldn't need any income support, but sadly, they do. And on that income support, since 1991, in real terms, in Ireland, when you include the impact of inflation, we are looking at a 68% drop, and maybe even slightly higher. And now with what's happening in the world with energy prices, it's actually going to get a awful lot worse. So now we're even more dependent on it, but the bad news is we have less money in the new cap. So it and it doesn't look like there's going to be any more put to it, so we're going to have to be even better at giving a fair distribution.
And, we also need to look at the fact that when we look at these figures, member states already can go to 100% convergence. They could go to 100% convergence today, but in Ireland's case, it decided to do it in the slowest legal way possible. And when it comes to income support and one area that's mentioned in the report but it wasn't focused on on the screen is the CRIS mechanism, which is the complementary redistribution income support mechanism. In Ireland, we did the minimum 10% redistribution and I've read some papers to suggest that this 10% was decided on because it was the optimum level to be decided on. Well, isn't that an awful surprise?
The optimum level was the minimum level, and that's why I think it should have been aimed a lot higher. All you have to do is look at Wallonia, where I understand it went as high as 22% on that payment, and it did lead to fairer payments. So while the current system isn't perfect, if you use it to the best of its extent, it can become a lot better. It's a bit like a Ferrari. If you don't put your foot on the accelerator, you can complain it's not moving.
And that's what happened with this cap in many cases.
Next speaker, Ivan David, please.
Ivan David
I'm going to speak Czech. I found it fascinating for a long time now how consistently we are applying the communist ideal, where everybody is supposed to work according to their capacities and receive from the society according to their needs. This is an interesting principle in theory. In practice, however, needs are limitless. So in order to accommodate everybody, we need to reduce needs, and this is what's happening.
So let's not be surprised. I'm convinced that this approach results in a price deformation. We need to switch to real prices. In other areas, we are not faced with the same approach. I understand the political imperative given the huge amount of small agricultural holdings, but nobody would come up with the idea to subsidize small chemical plants or small automotive plants.
Scale has an advantage. I believe that projects which have societal support are worthy of support here, for example, because in some areas, we need to make sure that the landscape is being maintained, or we need to compensate some totally unexpected disasters, etcetera. Retail corporations, of course, know how to handle this, and we are paying the price. They are pushing at increasing imports of cheap agricultural commodities, which brings them a lot more profit than if they try to buy out the produce from small farmers. As I believe, this is in pure contradiction with any efforts to increase our competitiveness, and we should finally change this.
Gilles Pennelle
We'll now pass the floor to those who have raised their hand to catch the eye. We'll start with the Patriots. Thank you. We have taken note of this very relevant study. I often walk through the countryside of France, though, to see those who are really working there.
And they are talking, it's true, about income, and they always say the same thing. The increase we talked a lot about is increased in production costs, and this is largely due, though, to EU policy. They talked to us as well about the agro food industry's responsibility in this change. It's an issue too of free trade agreements. I recently met a tomato producer who asked me, how do you want me to live off my work when tomatoes from Morocco are 3 or 4 times cheaper than those that I produce?
I meet a lot of breeders as well in my region who are very worried about the meat market. They can't fight against the changes that we're seeing. We need to stop these free trade agreements, stop these constraints we impose on our farmers. Let's combat large scale distribution to allow our farmers to live from their work. Thank you.
Céline Imart
Thank you, chair. Representative from the commissioner, farmers' income has been markedly eroded in recent years due to several factors, including the rise in input prices. And the situation is getting worse with the crisis in the model within the Middle East with the blockage of the Straits of Hormuz. The EU is also causing problems for our farmers with their rules on fertilizers. The EU seems to think that decarbonization will be good for agriculture in Europe, but this is putting our farmers into a very difficult position.
Our current stocks of fertilizer cover only half of our farmers' needs to ensure this year's harvest. What urgent concrete measures do you envisage to prevent a new spike in the costs of fertilizers and the bankruptcy of some farms, which are already on the brink, on the edge of disaster. Thank you.
Jessika van Leeuwen
Thank you very much, chair. Thank you for presenting this study today. But to better understand, I have some technical questions. Five member states were chosen. And considering the immense diversity in the EU, how representative is this?
The outermost regions and mountain areas are not represented. Figure one of the study, which farms, which type of farms really consist of 0.0 hectares? Question, why did you choose to have cutoff levels of less than 5 hectares, 5 to 250 hectares, and more than 250 hectares? Because by doing so, you create an underrepresentation of the smallest in some and largest in other member states. So, how do you statistically analyze this?
This also overlooks that a five-hectare farm cannot be compared to a 250-hectare farm, but they're in the same category in this representation. Could you elaborate on the structural differences and how this affects farm income? And finally, how did you define viable versus non-viable farms? So overall, I believe the study provides interesting input, but I would warn my colleagues to interpret with precaution, as I have serious doubts about the accuracy of the study in being representative and detailed enough to fully be representative. As even the European Court of Auditors concluded that the two major sources of data on farm income, EAA and FADN, do not measure disposable income on a farm, and that is what really measures the livelihood and welfare of a farmer, disposable income and not just what comes into the farm.
Thank.
You, chair. I'll speak in Portuguese.
Paulo do Nascimento Cabral
Thank you for the presentation of this study. What stands out is the rise and the fall in prices. We know that our farmers are receiving 40% less than what other sectors do. So the support is needed, to shore up their income. We also need to support our citizens so that they can access quality food.
There are many different realities in the EU, as shown by the study. And in our outermost regions, for example, what's being done for those? My second question, when we talk about farmers' needs, is there an impact assessment done here and what the effects will be for our food security? Third, what about insurance schemes? Is there a possibility of creating a European insurance scheme, because this would really help even out the costs for the farmers?
Thank you.
Maria Noichl
Thank you very much. We're talking here about costs, of course, but we're also talking about income for farmers, primarily. Thank you for the study. Two points were salient. First of all, the question of size and need.
Now, in terms of size, you found that less interesting. You thought needs were perhaps more relevant. I was wondering about something else, performance. Isn't that really missing here in the equation? Performance?
Shouldn't we be supporting those in particular that actually bring added value to society in terms of environmental measures, for instance, rendering a service to society? I was wondering about that. Maybe this study hasn't taken up that point. Maybe it's missed that point. And then finally, there's a proposal on the table looking at the different types of groups of support and that 100% would be funded by the EU if we're talking about, for instance, cotton payments.
You know, that and others would be paid 100% by the EU. But anything to do with EU and climate, and we know that this is important for many farmers and it has been in the past, that would be co-financed apparently. I'm wondering, this future co-funding for agriculture and environment is binding co-funding. How is that going to impact income for farmers? I'm wondering.
I think that this is something that we really need to flag, and we certainly need to talk about it. Thank you once again very much indeed for the presentation of your study.
Thank.
Speaker 32
you. I have two questions. This is an interesting recommendation, which suggests we should look at input costs, but they vary hugely. The base price is high in the Netherlands. Therefore, how are farmers meant to contend with these differentials?
Speaker 33
Then secondly, simplifying eco regulations across farms. This could be quite problematic, and it would generate a lot of extra work for the farmers, I feel. Thank you.
Daniel Buda
That was the last person who had asked for the floor. I would like to insist on one thing, the threshold fixed by the European Commission. The commission is not talking about this anymore, but farmers who have a farm of a certain size are asking for this threshold to be revised. This is because sometimes they cannot continue their activity because they're not receiving any more support, because of this threshold. Do you think we ought to review this threshold for small and medium-sized farms?
Then how do you think farmers can be helped to deal with the shocks that they face, given that the cost of oil is increasing or fuels is increasing from one day to another along with the cost of fertilizers? Should we unblock EU resources, other resources to compensate these losses? These aren't just the income losses. They have to face input product input cost shocks as well. And this is a real risk for our long-term food security and for our production volumes as well over time. Please, you now have the floor to respond to the questions.
Speaker 4
Thank you very much for your questions. Okay. Quite a large number of questions, and we'll do our best to answer those. Some of them, I would say, at the outset, maybe stay outside of the remit of our report. And I think a few of the remarks also, I think, we will maybe consider as useful observations.
Where should I begin? Yeah. I think on the question of free trade, the point was made that free trade is no problem. Something that's problematic for EU agriculture. I guess I would caution in that context that free trade is equally quite important for some farmers in Europe.
The capacity to export outside of the EU is considered as very valuable, by some farms, or by some farmers in Europe, and I think we need to appreciate that also. And, having a one way street, I guess, on international trade is not something that will be tolerated, by our trade partners. Has there been an impact assessment done to address the impact of what we were proposing on food security. I guess, we would say that in the report, our proposals with respect to policy are just suggestions for further consideration. You know, as my colleague mentioned in the presentation, the concept of viability is a conceptual piece, and I'll allow him later to talk a little bit more about that.
So, I mean, we did not define it very specifically. And in order to be able to do an impact assessment, you would have to place hard definitions around that, and that would be a study in of itself. Where to go next? Yeah. How to do how to try to secure a level playing field in the context of support and the greater independence that member states might have under the new CAP.
Yes. This is a very important point, and it's one that really, I think, will fall back to the commission ultimately in deciding what type of scope member states will have to design policy in that regard. I think that is a particularly challenging issue to address. But at the same time, the motivation behind this, I think, is one that we have to remember as well that by giving member states more independence, we are giving them greater capacity to target support to what member states individually feel are the more important issues that need to be addressed. There were calls for an ecological transition, I guess, a new paradigm for support in the EU agriculture.
And, of course, there is a view that that's something that we should give deep consideration to, and that's a political question, ultimately, I feel. But, from our point of view, I think what we would point out is that changing policy in EU agriculture has always been challenging, from the perspective of both policymakers, but also from the perspective of farmers. And agriculture is not a sector which welcomes rapid change. So if there is a move in any particular direction, then I think what we need to appreciate is that it needs to be gradual in its nature because swift adjustments in policy usually mean that farmers encounter serious stress. So we need to be careful that in trying to cure the patient's ills, we don't kill the patient in the process.
Okay. I might stop at this point and pass to my colleague who might wish to begin to take some more questions.
Speaker 6
Yeah. Let me take up some other questions. There was one of MP Dorfmann about the measurement of farm activities and also by MP Rauson on the measurement of viable farms. So that farm viability. That is, of course, as we all also realize, that this is a tricky issue, which needs much further research than we did in our study.
What I could mention too is that in the last medium term outlook of the commission, they provide also some information on farm viability and how you could make some measurements about this. One thing which could be interesting to go is that we have a criterion which is called standard output, which measures more or less the turnover of different products. If you would in the past, we had also the standard gross margin indicator, which more or less indicated what part of that turnover would contribute to the farm income. If you think we could maybe revitalize it, because then you can see how agricultural activities are in the normalized conditions contributing to farm income. And you can also see, evaluate, say, if you look to farm size and the type of the activities, whether a farmer has a sufficient amount to have a viable income.
So this could be maybe a way to explore. We had this information in the past better than now, I think, but it could be a way to go. And some member states, Belgium and The Netherlands, are exploring this. And then there was a question on the, yeah, maybe on the paradigm switch with the focus on sustainability. I think there, one issue could be that you think of a radical new model.
But another point, other way could be that you say, okay, we define the environmental user space, you could say that you have kind of regulatory constraints, and for example, balanced fertilization, which ensure that if you apply this, that water quality, etcetera, is keeping within bounds and that you give these constraints and then let the freedom to the farmers to see how they can best, say, accommodate to these conditions rather than from policymaker perspective to prescribe much. So that I think that that's an interesting direction maybe to go where on the one hand you ensure sustained improvement in sustainability. And on the other hand, you also respect the farmers' knowledge and expertise and the freedom to find the best solutions. There was one remark by the member of parliament, David, when he was saying, is support actually not hindering competitiveness? This was a question we also reflected on in our study.
And that's also why in that one figure, we made a distinction between direct income support and also support with, say, support for longer term competitiveness, which is in the support for innovation. There is, by the way, also some information that this direct income support helps farmers not only to support their income in the short run, but also to make the investments and to, say, change their farm, make it robust for the future. But we see these dimensions that you have to balance these instruments to support the long term, because otherwise, you can create dependence, which in the end will not, I think, help farmers in the long run. And then there was one question on the budget that you said, okay, if the heavy farm income support is very crucial.
Speaker 6
Given budget limitations, it's clear that we need more budget to support farmers in the long run. What I think one implication of our framework, what we offer is that when you target and align direct income support more to the, say, the viable farms in need is in our framework, we expect that you can also save some budget to reallocate it and to make it, say, more effective in targeting the beneficiaries you would like to target to? Okay. Yeah. Thank you.
Speaker 4
Okay. I might take a few more questions. The issue of couple support was brought up in one of the early questions, and the question was asked, should we not have more couple support? The point I would make with respect to couple support is that farmers are very often supportive of couple support, as a concept. But then, when the discussion about how that couple's support is going to be financed takes place, in some cases, the enthusiasm for it decreases.
And that's because very often in discussions of coupled support, we are talking about creating a pool of money that would be coupled to production, and that pool of money being created by reducing the amount of money that's available in the form of decoupled support. So that there are tensions there, I think, from a policy point of view between the enthusiasm some farmers may have for coupled support and the fact that it may actually ultimately lead to a reduction in the amount of money available for decoupled support. If it was additional funds, then that might be a different argument. I think the point was made as well that the cap budget needs to be maintained. Again, this is a political question for the parliament to consider, not really one for researchers to comment on, but I think it is well understood that what is being asked of farmers by society is not diminishing, and the support available to them is declining in real terms.
And those two facts would seem to be in conflict with each other. There was also a question about risk management and insurance. And in responding to that question, I might draw on just some of the experience that we have had in Ireland with respect to one risk management tool, which was a tool that tried to ensure the level of milk price that farmers received. And this was working or beginning to work, at least, quite successfully until we encountered a year when the spot price, the actual market price of milk, rose far above the level of the insured price that farmers had entered into. And, of course, farmers became very unhappy with this.
And the long and the short of it is that farmers like price insurance if it means that they don't experience low prices, but they have an intense dislike for it if it means that they can't enjoy the benefits of high market prices. So this comes back to the issue of education and helping farmers to understand better how insurance schemes work, and the fact that insurance fundamentally is about somebody else taking on a risk that otherwise the farmer would actually bear themselves, and that there has to be some profit margin ultimately for those taking on the risk as a result of doing that. So that, I think, is an example of how the whole risk insurance instrument issue needs to be communicated better to farmers.
Speaker 6
Maybe I to add on this risk management tab, we see that the adoption is actually lagging behind ambitions. One thing, what someone has considered in the past and some evaluations is saying that in particular for land-based productions, which are open systems subject to, say, weather influences, etcetera. Maybe you could do something that you make a requirement that you link it just like with cross compliance, that you link participation on the receivable of direct payments.
Speaker 6
Obligatory payment or participation for these sensitive products. But I'm not sure because the differences in member states are quite. So I'm not sure whether this would reflect, but at least I saw it in one of the recommendations in the previous study on the CEP. And then there was also one question of a member of parliament, von Lehwen, where she's saying, be careful with the representativeness of the study, and she referred to one of our figures. Let me emphasize that this figure was only used for illustrative purposes. We looked really into the individual and detailed farm data, with much more refined size classes.
And there's also a kind of a dashboard where people can themselves look into these details for the member states. So there's much more behind than we had it in the report.
Speaker 4
The chair asked in his intervention at the end of this set of questions how can farmers be helped with shocks in respect of price increases for such things as fuel and fertilizer? And I guess I would go back to one of the points that we made in the report, which we didn't really elaborate on in the presentation. But if we compare the data provision for agriculture in Europe with the data provision for agriculture in, say, the United States, for example, what we observe is that the timeliness of the availability of data to tell us what is actually happening is not as good in Europe for a whole range of different reasons. And I think one of the crucial steps that needs to emerge here is that we do better in Europe with respect to that, either by having the official data or by having formal means to try to make flash estimates of what are actually happening with respect to agricultural incomes in the European Union. There's a risk with respect to input price shocks of overcompensating some farmers and undercompensating others.
So on the face of it, having a mechanism whereby we would try to support farmers in those kinds of situations sounds great in principle, but if some farmers are deeply unhappy with the way that support is provided, then that in itself creates a new additional problem. So one of the things we need here ultimately is better official data available in a more timely way. And, of course, this ultimately costs money to provide and coordination across the member states as well. But if policy is to be more effective, especially in addressing income crises, we need to know more quickly when and where those income crises are emerging and what the size of the crisis is to come up with appropriate solutions to address them.
Daniel Buda
Thank you very much. Now for the agreement. Next speaker, Missus Catherine, just line Lennell.
Speaker 36
Thank you very much, chair, for giving me the floor. Let me, first, as many of the speakers have done, congratulate the authors of the study for the relevance of this study. It's time delays. You will have noticed that this is mainly based on the analytical work that has been done, is mainly based on the farm sustainability data network data, which are important to preserve in a context where we need a much more evidence based policy in the coming years. It's very timely also, as many of you have said, because we are now discussing the next CAP, and it's important to consider the outcome of this study considering that the main objective of the CAP is to support farmers' income, hence the relevance and the timeliness of this study.
I would like to stress a couple of points, which are of interest to us in the study. First of all, the study acknowledges the income that the income support policy, in particular, the cap remains critical, and in particular, the role of direct amendment as income support. That's very important. Hence, the need to preserve the cap in the next MFF. Important to say that the study also highlights the need for providing better targeting of support.
The current cap has already started, but we need to do a better job. Hence, our proposal to provide member states with the possibility to make sure that those mostly in need here, we are talking about young farmers, livestock farmers, farmers in areas under natural constraints, women farmers should be better supported. Hence, our proposal to have capping, the aggressivity, and possibility to add support to the farmers most in needs, including in some territories. My second comment comes with the complexity and the trade offs that you have to consider when designing an agricultural policy. It's challenging, but it's also the beauty of the exercise and the role of the policymakers, obviously.
But this is important to remember that there are many elements to take into account. Some have been mentioned: income transfer efficiency, degree of targeting, transition costs, but also the fact that there are many EU policies that are also affecting farmers. So hence, also the work that we've done through the vision for agriculture and food to make sure that we are not just looking at the CAP, but making sure that we use all EU policies to create synergy and support farmers' activities, work, income. My third point would relate to resilience. It is indeed much more important than it used to be.
Agriculture has become much more risky than ever. Volatility has always existed. Clearly, also, agriculture has been subject to weather events that can impact, of course, the ability to produce and the productivity of agriculture. But it is important to say that in addition to these classic drivers, for the resilience of agriculture and the risk that agriculture are faced with, we now have also a geopolitical event, the impact of climate change, and this needs to be looked at. Hence, the work that we've done on fostering risk management tools in the next cap.
Let me say that one important point that has been mentioned, it's not just about offering farmers tools, but making sure that they are easily accessible and that the uptake is good. And it is true that we still have a very limited number of farmers who are using these tools. We consider we evaluate that about 15% of farmers in the current cap are using risk management tools, insurance, but also other type of tools. Hence, we are working hard on this. Let me advertise that next week, we are organizing or the World Bank is organizing a dissemination event.
We see European Investment Bank where they will present the outcome of a study that they have made in Europe for Europe, for us on risk in agriculture and risk management tools and where they make, on the basis of practical experience in cases that they have studied in some member states, they make actionable recommendation to the policymakers to increase the uptake of, and the effectiveness of our risk management policy. So I'd like also to invite you, those of you who can join, to join this meeting on March 25 here in Brussels, and online. My fourth point would also be related to viability. It has been said that this is difficult. Yes.
It's difficult, but we still have a lot of data there. Let me, maybe you are going to say that this is only about advertisement, but let me mention that, a couple of weeks ago, we've published an analytical brief, I think it was in January, called better targeting of income support in the cap, where you will find, based on a couple of criteria and parameters, how we define viable and nonviable funds and where we show that around 15%, 15% of our farms in Europe are nonviable. It's, of course, there is diversity between member states. There is also diversity between sectors, but this is an average. And this is a good starting point also to work on then in terms of better targeting.
So I invite you also to look at this briefing. My fifth point will relate to what was said also with the fact that, obviously, the reports suggest, sorry, indexing agricultural support in line with inflation. This is something that we have considered as part of the next MFF, where our proposal wants to align amounts to inflation when it is above 3%. So we are making progress there. And then my last point will be to concur with what has been said by the authors, but also by many of you, that it is important that we continue to collect high quality data, reliable data, and that they are also available in a timely manner.
You made the point that sometimes we are less good than the US, particularly on this point. So I can confirm to you that we are working on improving the timeliness so that we have better evidence that we can use to design also, responsive reactive measure when it's nested. So, again, thank you very much for the study, which we find is a thorough study, very with very useful insights, on income development. To say also that we are ready also to further engage with you all, with the members of this committee as well as with the authors so that we can use this evidence both in the context of the negotiation of the next cap as well as in the work we are preparing also to deliver to this house an interim evaluation of the current cap, an evaluation which is due by the end of this year. So I'll have the pleasure also to be back here in some months. Thank you very much for your attention.
Daniel Buda
Thank you very much indeed. Thank you, madam director. Now before we close this particular item on the agenda, I think it would be essential for us to all understand how difficult life is for farmers, how complex life is for farmers. There's a need for support, income for farmers. We're talking about that.
And we should never forget the fact that farmers can't really control external factors. You know? So what do we expect? We expect them to pray that there not be any droughts, that they're not too many floods, not too much raining. What about inflation?
What about increases in oil prices going up? All of this is happening, and in the farming sector, it's really difficult, really difficult to just stop working or stop living. Of course not. A car plant could potentially stop production, at least temporarily, but a farmer can't do that. A farmer can't leave the land, can't stop farming, can't just pause it for two months, and then come back to business.
No. That's not possible. So in the long term, we're talking about food security and food safety. You can't really compare this sector to other economic sectors. You know, a lot of things we could do without, we can go without in life, but not without food.
We can't go without food. So that's why it's so important to have support schemes in place. Whether the farm is large or small, no matter, we need to be able to help them. We need to enable farmers to do their work here in the European Union because we don't want to be dependent on imports of food. Look what happened.
Look what happened, for instance, with the fertilizers. You know, now we're actually dependent on imports when it comes to fertilizers. So like I said, I'm convinced that together with the European Commission and going beyond the proposal, which we've been talking about here, beyond that, I'm sure that we can find a way forward and guarantee the viability of the farming sector in the long term. Now, and gentlemen, we're going to have a short break, seven minutes, seven minutes' break whilst waiting for the commissioner to arrive. Seven minutes' suspension.
Thank you.
Veronika Vrecionová
So, dear colleague, please, I would like to ask you to take a seat. Commissioner Hanssen is already here with us, and I think that we are all of us looking forward to our discussion with him. So let's start. So I'm really happy to welcome the commissioner for agriculture and food, Christoph Hansen, for an exchange of views in the context of the structured dialogue. The aim is to allow the commissioner to present the state of implementation of his current agenda as well as his priorities for the next years.
Ahead of this meeting, all agri members have been invited to propose some questions in writing to the commissioner so he can best target his initial statement of his 15 minutes. Coordinators and later other members wishing to take the floor are obviously free to put forward any issue as regards the commissioner's competence in agriculture and food. So the, I think, really, that yes, the information, the outcome of this exchange will become part of the summary report 26, which will serve as the basis for the decision, the resolution for the political groups to be adopted in plenary before the summer. So, dear commissioner, you have just now the first fifteen minutes.
Christophe Hansen
Thank you very much, madam chair. Honorable members, for me, it's always a pleasure to come back to the agriculture committee, as we have our structured dialogue today. And the last one took place almost one year ago. And at the time, we discussed the commitments of the commission following the presentation of the vision for agriculture and food, and the priorities guiding our work in the months ahead. And today's exchange allows us to return to those commitments and assess the progress achieved since then.
And this will allow me to detail what will be the work of this year, and these dialogues are, of course, an essential part of the institutional relationship between the commission and the European Parliament, ensuring strong alignment of our strategic direction. And let me be clear from the outside. Over the past year, this commission has been actively at work, and we have listened, we have engaged, and we have acted. And since our last exchange, I have visited all 27 member states at least once. I met farmers.
I met producers, rural communities, across the continent,
Christophe Hansen
I discussed production methods, expectations, crisis, hopes, and innovations. And in these exchanges, I have to say they matter, because the realities of agriculture are the best understood when seen directly in the fields, farms, and rural territories where our policies take effect. And, therefore, for me, it was very important not only to go to the capitals, see the people that eventually I anyhow meet in Brussels, but speak directly on the farm with the farmers. And we should be proud of that. European agriculture is a sector where we already hold a global leadership. And at the same time, we are closely monitoring developments in the Middle East, and their potential impact on food availability, affordability, and agriculture input costs.
And energy prices remain a major concern for the sector, and fertilizer costs remain particularly sensitive. And against this backdrop, let me turn to what we have already achieved. Last year, as I mentioned, the commission presented a division for agriculture and food as a strategic road map for the future of the sector. And one year later, we can already see substantial progress. As outlined in the letter sent to the European Parliament marking the first anniversary of the vision, more than 60% of the announced initiatives are already delivered or under way.
And this progress reflects sustained cooperation between the commission and the European Parliament and, of course, the member states. And let me allow me, please, to acknowledge clearly the contribution of this committee. So your engagement has been very essential in turning commitments quickly into concrete results. And among the key achievements already delivered are the generational renewal strategy, the wine package where Esther Erans Garcia was the rapporteur, and you also concluded negotiations on the cross border enforcement of unfair trading practices. The regulation, the rapporteur was Stefano Bonaccini, reinforcing the farmers' position in the food chain.
And you recently agreed targeted measures within the common market organization, including clarifications on meat denominations where Celine Imach was leading the parliament negotiating team. And I would like to thank, in particular, this committee for the swift work on the omnibus simplification package with André Rodriguez and his team, which represents a major step forward in reducing administrative burdens for our farmers. And only last week, to mark International Women's Day, we launched the Women in Farming platform, strengthening support and visibility for women across the agriculture sector. Competitiveness, as highlighted as well in division, must remain the central compass guiding European agriculture policy, and the European Union remains one of the world's leading agri-food exporters with a trade surplus of around 64,000,000,000. But leadership cannot be taken for granted.
One key pillar of competitiveness is simplification, and simplification is a cross-cutting priority for this commission and has been a top priority from the start of my mandate too. And farmers must be able to focus on producing food, rather than navigating unnecessary administrative complexity. I already mentioned, omnibus, three regulations proposed six months into my mandate, which entered into force on 01/01/2026. This represents a major step forward in breaking down the administrative burden, and it is expected to generate savings of around 1,700,000,000.0 annually for farmers and 230,000,000 for national administration administrations. And additional adjustments to the secondary legislation providing further simplifications should enter into force by March.
Some simplification must translate into concrete improvements for farmers, and simplification must also extend across policy areas. And work is ongoing with colleagues for environmental and health policies, including legislation affecting the food and feed sectors. And my colleague, Commissioner Varelli, addressed several of these issues yesterday with you in his structured dialogue. And our objective is very clear, simplify wherever possible, while maintaining high standards. And in this context, we also held an implementation dialogue with Commissioner Roswell focusing on environmental legislation affecting farmers and foresters and identifying further opportunities for simplification.
And making implementation simpler is also one of the drivers of the recently proposed targeted modification to the organic legislation. Camilla Lauretti is here, the rapporteur, and I thank you for having decided to deal swiftly with an initiative that will improve clarity, reduce administrative complexity, and maintain the high standards trusted by consumers. And in 2026, we will also update the organic action plan following consultations with farmers and stakeholders. European agriculture remains strongly export-oriented.
and I have.
Christophe Hansen
Mentioned to you our trade, positive trade balance. Therefore, reliable partners such as Japan, Korea, and Canada continue to provide important opportunities for our European producers, and negotiations with other partners, including India, also contribute to this broader economic strategy. And sensitive sectors must, of course, remain protected and need particular attention. And in the Mercosur context, this is reflected through safeguards and carefully designed tariff-rate quotas for products such as beef, sugar, and rice. And reciprocity also matters.
In November 2025, the commission launched an impact assessment on stronger alignment of production standards for inputs, and it will guide possible next steps, as you know, in the food and feed omnibus, which is based as well on the commitments in the vision for the future of agriculture and food. We have announced to go to zero with certain pesticides. We have already started this. The next step will follow according to this commission that this study that we have launched. And then, honorable members, allow me to briefly address the future of the CAP within the next multi-annual financial framework.
And I have heard this house's concerns on the common character of the policy and the flexibility given to the member states. And I want to assure you the future, CAP will continue to rely on a strong common framework and robust support instruments. Core CAP instruments, for example, support for income, for environment and climate-friendly practices, and for investments, amongst others, will remain in place with a level of new budget for these instruments that stays predictable throughout the programming period. And at the same time, the future CAP will simplify procedures and provide greater flexibility for member states to adapt measures to national and often regional circumstances. And the reformed system of conditionality will recognize farmers as stewards of the land, ensuring the long term sustainability of the resources they manage, and additional tools will allow more targeted support including simplified forms of such as lump sum payments as well coupled support, which will be particularly benefiting the smaller farms.
And at the same time, the common character of the CAP remains central. Member states will operate within common objectives, tools, and rules, ensuring a level playing field across the European Union. And to support this alignment, the commission will also provide CFP country recommendations, guiding the national plans. And let me now turn briefly to the rural territories. And rural areas cover 75% of the EU territory and host a quarter of our population.
So contrary to some voices, rural areas will continue to be supported, and this support is now clearer. After listening to this parliament and the council, president von der Leyen has proposed a dedicated, around 48,700,000,000 of EU funding to rural areas, which we can call as well the rural spending target, which will strengthen the infrastructure, services, and resilience across Europe's countryside. And another proof that farming and rural areas are of central importance is the additional proposal of the commission to unlock for member states a program of 45,000,000,000 with agriculture and rural tech already from 2028. Agriculture and the rural economy will also be able to harvest benefits and results from projects funded under the European Competitiveness Fund and Horizon. Now looking ahead, I believe that food security remains central to our work, and the situation in the Middle East is a source of concern for food security, including in the EU through energy and fertilizer prices that have increased, and maritime transport has been disrupted. And we need to be prepared for these food security risks in case the blockade of the Strait of Hormuz is not lifted in the coming weeks.
And we created back in 2021 a dedicated food security crisis mechanism, the European Food Security Coordination Mechanism, EFSCM, it's called, for this type of situation. And we will convoke a meeting of this mechanism next week on March 26 to discuss with member states and stakeholders the risks at stake and the possible responses to mitigate them. But the situation is not so new because fertilizer prices have increased by around 60% since 2020. And for this, we need structural responses, and we are preparing a fertilizer action plan to be presented in 2026. And it will include longer-term structural measures such as encouraging substitution and better use of chemical fertilizers, for example, with precision farming.
And depending on the evolution of energy prices, it may also conclude further short-term measures, and we will do this in dialogue with all those concerned and all those who can contribute to finding the best solutions: farmers, the fertilizer industry, academia.
Slow down a little bit.
Christophe Hansen
And associations. And, we are preparing a strategic dialogue on fertilizers in, for the mid of April. On other work streams. So looking ahead, we will continue delivering the vision for agriculture and food, including a livestock strategy, a European protein plan, and a review of the unfair trading practices directive. And, promotion efforts will also expand with the budget rising from 132000000 to over 200000000.
And you have just adopted an own-initiative report on the matter. Carlo Fidanza was the rapporteur, and the commission will adopt a livestock strategy later this year with the purpose of enhancing the sector's resilience on long-term viability. Simplification will also continue to be a key area of work, and needless to say, negotiations on the future CAP, and it is essential to progress swiftly and prepare implementation of the future program cycle. And when we meet next year for the structured dialogue, I hope agreement will already have been reached because, I was, on your side for the last reform, and I have to say bumping into European elections was not helpful there. Administrations afterwards had to rush procedures to set up their plans, and then, of course, they have not been as simple as they could have been.
So I think in this situation, we should together avoid, for the next term. And honorable members, European agriculture stands at a decisive moment. Geopolitical tensions, climate pressures, economic competition are reshaping global food systems, and yet Europe starts from strength. And in the year ahead, our work will remain firmly guided by our commitment to a competitive, resilient, and trusted, European agriculture model. I said we start from strength, but that is not something we should take for granted.
It needs to be sustained and worked on permanently, and we have to do this effort together. Thank you.
Veronika Vrecionová
Okay. Thank you, Christophe. And just now, let's immediately start with coordinators. You have two minutes each. And first, I would like to ask EPP Herbert Dorfmann.
Herbert?
Yeah. Thank you, chair.
Herbert Dorfmann
You're very warmly welcome, of course, once again here, mister Hanssen. And I think you've given us a very impressive rundown of all the achievements of the last year, plus I absolutely concur with everything that you've said there. The major topics we're going to need to address in the weeks to come, obviously, are going to be the reform of the CAP. In that context, we need to be looking at farm incomes and how we can guarantee and support those. We, this morning, had a presentation on precisely this very topic.
I think if you talk directly to farmers, they have a love-hate relationship with direct support. They know that they actually need it, but actually, they would rather be earning a living on the market, and you can quite understand that. I think you've absolutely pinpointed what some of the relevant factors are for the future, one of them being how we bring more young people into farming. It's really only if they can be sure that they'll get the requisite direct support in case of need, that we're actually ever going to be able to attract young people and give them the hope that they'll be able to earn a living on the market. So we need to focus on that.
We need to look at employment. We need to look at security, and we need to look at the performance regulation. The draft on that does not seem to focus on income certainty, and therefore, that's something that we need to look at, because it is extremely important. People can't be engaged in unproductive economic activity that doesn't earn them a living. So we do need to address that, and I think it's important.
We need to think also about what we can do to strengthen the markets that we have, to work on expanding them, and we need to look at trying to streamline and improve some of the programs we have in place, which could perhaps be optimized and give more focused and tailored market support. We've seen a lot of market fluctuations. Currently, milk is a case in point. I think this is an illustration if we actually needed one, that farmers do need support where they don't have a stable income. This is really important for the current and for the future cohort of farmers.
Thank you.
Veronika Vrecionová
Okay. Thank you. S n d, Eric Serjakomo. Oh, not oh. Okay. But it's, you know, here.
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Dario Nardella
No. Don't worry, Sherry. It's our fault, so it's okay. Thank you very much. I will speak in Italian.
Dario Nardella
And thank you very much, Commissioner, for being here. I think that the work that's been done in the last year and a half is extremely important. It's very impressive. Huge number of very important legislative files have been addressed, and, really, I can only congratulate you on your extremely high level of productivity that you, personally, and your staff and department. On the budget, we've already said in the past, socialists and democrats, our view is that we have a commitment of 45 million, which is in the second letter sent by the European Commission president von der Leyen.
And this is a commitment which we need to see translated into binding commitments. It is in effect a front loading of the medium-term funding payments, and it's also supposed to be governed by flexibility, which will determine the shape of negotiations between the member states and the commission. So we have that. As far as the CAP is concerned, we feel that this ought to be as significant a part as possible. We've also got to look at the regional partnerships, which we feel are valuable and ought to be central to policy formation.
Active farmers, of course, are the people who are key to our future, and we need to ensure that the commission and the EU are focused on this. We can't leave that in the hands of the member states. It's far too important to the whole of Europe. We have a lot of resources going into the CAP and into foreign policy. And that being the case, it's very important that we look at what the impact of inflation is going to be, because that will erode the funding.
Simplification, yes, we need to facilitate simplification, particularly for smaller farmers, because it's a big challenge for them. In international terms, we need better checks, better controls. That will enable better compliance with reciprocity principles. Then I have a question for you about the emergency that's been triggered by the Middle East issues. Now there are energy issues, but there are also fertilizer issues, and the impact on farmers is going to be considerable. This is all really part of a wider consideration of security at European level.
Mireia Borrás Pabón
So, could you comment on that, please? And thank you again for all your work. Thank you. Thank you, commissioner, for your presentation, which is very useful. This is a strategic dialogue.
And whilst we're here, farmers and livestock breeders are taking to the streets, decrying some of the trade agreements that the EU has reached. Strategic dialogue is important, but we do need to recognize that the impact on pay on incomes from inflation and excessive bureaucracy is huge, and we do need to tackle this because farmers expect that we do that. They expect that we look at energy input, fuel costs, and take some action because they can't make ends meet. You've alluded to this, and you've talked also about tariffs that are in place and the impact on food prices and imports and the 60% increase since 2020. Given this backdrop, commissioner, I'm not sure that the strategic dialogue would be perceived as particularly significant or helpful in terms of the perception of our farmers and livestock breeders who are in greater need than ever of support.
You've talked about action on fertilizers, but are you thinking of suspending the use of fertilizers? For example, that actually would have a positive impact on prices. And secondly, would you be able to commit yourself to the figures that von der Leyen has announced and assured us are going to be flowing into the farm sector? She has said that that's an integral part of the CAP. I'd also like to know exactly what is happening with the Morocco agreement and the ratification. I didn't get a response from some of your colleagues.
The parliament has been looking at this agreement, obviously, so I'd like to know exactly when you think that the agreement is going to be coming to us for ratification. Thank you.
Thank.
Bert-Jan Ruissen
you. And thank you to the commissioner for this presentation on farm policy, which was very enlightening and helpful. I'm very glad that you're focusing on alleviating the bureaucratic and administrative pressures on farmers. That's an excellent beginning. We've seen the simplification procedures and policies that you're putting forward on the CAP, various omnibus regulations such as food and feed.
So all these are very welcome initial steps and initiatives. But as you've said, commissioner, you're very well aware yourself that we need to do much more, particularly in the environment. We need a lot of simplification in Ms. Roswell's portfolio. I'm talking about the habitats directive and nitrates.
We've got a lot of longstanding legislation there, which takes a great toll on the farm sector. It really hasn't factored in economic and social considerations of recent times, which are very important, and a lot of the older legislation doesn't take into account variations in the type of land or the type of farm. And therefore, I'd like to know to what extent you're involved in the environmental work in DG Agri. Obviously, you've got a vast amount of work on your plate anyway in DG Agri, but what is the commission going to do about serious simplification of the habitats directive, the nitrates directive, and other environmental impact ones? Then on to climate considerations and water resource management.
There are a lot of areas where drought is a very serious problem. You've been in Zeeland, I know, and you've seen the impact on the delta area of the river of the osmosis with salt water, and this is a huge problem contaminating the water. So when is the new funding under the NRPP going to become available, and when will it be possible for these funds actually to be allocated in order to ensure that we have better quantities of fresh water available to farmers? Thank you.
Kathleen Renaud, please.
Veronika Vrecionová
Thank you, chair, and thank you, commissioner, for your update and for being here with us today. Of course, CAP and CMO are central for the agricultural sector, but commission's proposal on the new model on NRPP, national and regional partnership plans, are equally important for agriculture and rural development. You didn't mention that so much. As a reporter in AGRI Committee for NRPP, I'd like to ask, how do you see the new approach in light of the equal treatment of farmers all over Europe as some member states will have more ability to finance agriculture than others, which increases imbalance in the internal market and in the worst case, we can lose Europe's competitiveness. Of course, it is positive if some member states are willing and able to support the farmers strongly, but we must have an overview of the balance of European farmers and the single market.
Speaker 43
Has the commission evaluated possible consequences? In addition, we had a debate on the rising production costs yesterday. The Middle East crisis affect direct to farmers on the price of the oil and fuel and fertilizers as a lot of production is based on Iran. How commission will ensure that our farms have enough, and with reasonable price, farming inputs for the production about simplification. I must say, I'm a little concerned if any farmer can see any simplification in their everyday life.
Elsi Katainen
I doubt that. And I'm wondering if simplification is helping only the administrative will see that. But one more question on the European food campaign launched by president von der Leyen. How we ensure that member states, and different high quality food can benefit from this campaign. We can't just afford to concentrate only, for example, on JI products as there are significant differences in the amount of GIs between different member states.
Thank you.
Thomas Waitz
Thank you, chair, and thanks again, commissioner, for passing by here in the agri committee. Let me speak about fertilizers. I mean, you're also now joining the chorus of fertilizer promoters. Look, people. I mean, do you understand that we are kind of addicted and have an addicted agriculture to imported fertilizers, which are based on fossil fuel, which are basically coming from countries that in a majority are not friendly towards the European Union?
Do we understand that relying on fertilizers, imported fertilizers, is just increasing our dependency on outside? Do we understand that stopping crop rotation, and, by that, reducing the amount of legomenosis that we plant is increasing our dependency on fertilizers. Do we understand that, you know, green cover in the winter is keeping the fertility in the soil and is adding fertility through green fertilizers? Can we please talk about a strategy where we get independent from fertilizer imports? And the concrete question is, where are we, commissioner?
We're supporting our own industry because some fertilizers might still be needed. But can we please see if we can produce that? I mean, how many learnings do we want to have? Again, we find ourselves in the situation that the geopolitical situation is not in favor of imported fertilizers. The second on the milk market, commissioner.
I mean, you see that the situation is really dire. In most of the countries, we have a situation that milk prices do not cover production costs. Would you be in favor of voluntary reduction financed by the crisis funds as we did in 2016? And it was very successful back then. And the last question, and this is on co-financing.
Do you have any news about the co-finance financing ratio in national and regional plans? Because if we end up with the co-financing of 30% by European Union budgets, I can tell you that, for many member states, the attractivity will be very low to actually support what you all have been talking about. Let's work with incentives. Yes. But these incentives need to be there.
This offer needs to be there, and it needs to be financed. Is there any news on this question of co financing and the different quotas of co financing? And last but not least, do you have any news on saving leader projects? Because these are projects that help us with our regional value chains and give alternatives to global markets and retailers. Do you have any news on that?
Thank you.
Luke Ming Flanagan
Thank you, commissioner, for coming here today. As you're aware, in 2025, this committee produced a report titled the future of agriculture and the post-2027 common agricultural policy. And as you probably know, in this report, which was carried overwhelmingly in the plenary, there was a clear demand for the next CAP of an increased budget to underpin EU food sovereignty, a rejection of the one fund approach that would see CAP incorporated into one national envelope, and the intention retention of a two-pillar structure. Unfortunately, none of these key demands were met in the commission's proposals. Now given that the commission now accepts that their proposal is flawed by virtue of the fact there is a willingness to move articles to the NRPP to cap, will the commission withdraw this flawed proposal and bring forward a new rational legislative proposal that reflects the wishes of the European Parliament and provides the coal legislators with a legally sound, please?
If you want, yeah. I will slow down.
Luke Ming Flanagan
Legally sound basis to work on. Does the commission believe that the dissolution of the two-pillar structure and with it the disappearance of the named funds, the EAGF and the EAFRD, that have funded agri policy over many decades, make it more difficult to retain targeted funding for the agriculture in the future? And a particular question on the NRPP, in Article 35 Regulation, paragraph three, second paragraph, it states: The planned average aid per hectare for digressive area-based income support referred to in the first subparagraph should not be less than €130 and not more than €240 for each member state. So what's your interpretation? Does this mean in practice that within member states the actual rate of payments to farmers can be below €130 and above €240 per hectare?
And just a final comment, you talked about changes to the conditionality. I can't seek changes to the conditionality. If you change the number of conditions to a smaller number, which you include all of those conditions within the smaller numbered group, you end up with the same thing. Any analysis of this conditionality shows you that it's the same thing, you've just put it in different categories. And to me, it's quite insulting to say it's different when it isn't.
Ivan David
Dear mister commissioner, you talked very exhaustively and discussed the complexities of agriculture. I believe you genuinely want to find solutions. You mentioned that one of the keys is the simplification of the administrative burden. It's quite clear that will not be enough because we have experiences that determine problems, which is the low attractiveness of working in agriculture, high costs, difficult reactions for war conflicts. And then we have the question of competitiveness because big corporations, supranational corporations will always find their profits, and they will push for importing cheap commodities from countries outside the EU.
There are pressures to decrease the expenditure for agriculture in the European Union. We also have the militarization. Yesterday, I heard an MEP from the Greens who said that we could find money for militarization by cutting some not necessary money elsewhere. I have also read that experts of the European Union say that we should eat less red meat, and we should tax more this area. If you go on the 3rd floor here in our building, you see panels that say that the future of agriculture is cooperative.
I agree with that to a certain extent. What do you think about that? What will be the future of agriculture if we continue with the concern?
Veronika Vrecionová
Vice chair, Buddha, for one minute, and then I give the floor again to commissioner.
Thank.
Daniel Buda
You, chair. Mister Commissioner, I would like to speak about milk. Currently, dairy farmers across the EU are faced with an unprecedented situation. The price is 30 centimeters per liter in Romania. In the council meeting on January 26, we talked about this problem.
What will the commission do to resolve this crisis? We see that the cost of fuel is rising. And every two hours, the price of diesel is rising. What will our farmers do? They can't put gas into their tractors at the moment.
We have to send out a clear message. The European Commission has to show farmers that it was going to do something. Thank you.
Veronika Vrecionová
Gas. Again, Christopher Hansen to have ten minutes for your answers and reply.
Christophe Hansen
Thank you very much. I will try to squeeze as many questions into my ten minutes. Herbert Doffman,
Thank you very much. You're absolutely right about the direct assistance. Most of the countries with which I'm familiar, the farmers would actually much prefer to be able to live off their production. They don't want to be dependent on funding. It is true also that we do need to bring younger people into the sector and make it attractive to them.
So we do need to have a better offer, and there's still a certain amount outstanding in terms of the initiatives we need to take, and the things we need to achieve. I do think we need to put productivity back in the hands of the farmers. I've said this myself in the most recent council when we talked about the health check in the market, and I said very much that it's important that we focus on what we can do across all the various sectors to support farm production and to enable farmers to achieve their full potential. This is really important. We need to strengthen these markets, but we need to be aware of the overall context, too.
I've seen the and mentioned to you that we have a 64,000,000,000 surplus on our trade balance in the farm sector, but we can improve that still further. So that's something that we need to work on. As far as milk is concerned, there are some external markets where we could actually capitalize on opportunities with our dairy production. But we obviously need to do that in a focused and consistent way. We do have some established and trustworthy partners, but we need to take things further.
About the simplification and as well the small farmers, I think we have delivered substantively already, not only now in the simplification package, but as well for the future CIP, lump sum payments, exemptions from controls, etcetera, specifically for small farmers because for them it's, of course, even more difficult because they cannot hire something to do that administrative burden, and that is why we went into that direction. And, also, you mentioned the front loading of the 45,000,000,000. I think we have to say this is new money. Mrs. Boras mentioned this as well. I will come back, maybe, to that later.
But, this is, of course, not CAP money. It comes from the NRPP reserve that was meant for the midterm review, but it will now be available for agriculture. Of course, this can as well be, let's say, the architecture can be more strict with the stronger ring fencing or earmarking, but that is, of course, to work now for the co-legislators to go into that direction. Then many of you mentioned the impact, Daniel Buddha just did it, but several others as well, of the Middle East crisis that we are currently having and the important impact on our farmers. You mentioned diesel.
Indeed, for diesel, we are heavily dependent on imports. The same goes for jet fuels, but that is less of a problem for the agriculture sector. But the prices are exploding. There, of course, we have to see what is our domestic potential. I'm very keen as well in looking into biofuel production in the European Union, and I see there is a lot of potential, especially when we have very low prices for crops.
Currently, that is one part of the solution, but it cannot be the only one. Of course, there also comes the question of fertilizers. Some of you mentioned we are addicted. I would say, well, we are dependent, and this represents a huge vulnerability. And therefore, again, we need to look at what can we do domestically.
And that is why we have now launched as well the whole exchange with the sector, not only with the fertilizer producers, but as well with the farmers, of course. And I think there is no silver bullet for it. And, some are I say we simply have to suspend CBAM. Well, you could argue that, but on the other hand, we still have a domestic production industry that has heavily invested into carbon capture and storage. And, for example, if we suspend, well, we put them in an uncompetitive position. And I think that is not right either because that, in the long term, might even enhance our dependencies if more companies are closing.
I look to Mrs. Grapini. You have recently as well in Romania, a fertilizer plant that has closed again. That is going in the wrong direction. But on the long term, I think we need as well to be able to be less dependent on fossil-based fertilizers. We had as well together with Jessica Roswaard.
Somebody mentioned it as I think it was Mr. Reissen. On this exchange, we had, of course, the entire panoply of stakeholders present, but what farmers mainly said is that they cannot accept if they have manure on their farm, they need to pay to get rid of the manure and have to buy back fossil based fertilizers again. And that is something that came back several times. And I think if we go in that direction, we need as well to look into the water framework directive. We need to look into the nitrates directive, and especially in less water vulnerable zones that you can use, eventually more directly manure or renew.
I think there are differences as well. And especially on grassland, I think the absorption capacity is higher. So that is something we need to look at. But I also am very keen, but, of course, this is still a technology that is in the baby shoes. Let's say, it's microbe technology where you work with bacteria or fungus, in order to have better absorption capacity of nutrients, and I think there is a, look to say, there is a plant in AMEA that is working on that. It's still not widely spread, but if you talk to experts, they claim that we could reduce potentially by almost 50% the use of classical, fossil-based fertilizers.
I think that is something where we need to go, because this is not dependent on the energy prices. It is, and if we scale this up, there might be possibilities, and it might be cheaper than the classical fertilizers. So I think that there are new technologies where we shouldn't close the eyes, and be very proactive because that.
Christophe Hansen
contributing to our autonomy, which is, of course, important for our sovereign food security and sovereignty. On the mister Fenegen asked, is 130, can there be somebody go below or be beyond 240? No. They can't. It's really the aggressive area-based payments that will be the fork, let's say, where you have to sit.
But on the other hand, if you have very interesting, agro environmental measures that will be more attractive because we have merged the eco schemes and the agro environmental measures, you can, of course, get way out, but then there needs to be an effort on that. That is clear as well. And, also, we have enhanced again the coupled support to promote specific crops. Let's say, for example, for protein crops so that can become more coming out. This can go the same for livestock.
I look to Jeremies de Salre Luis himself, a breeder. And in the Massif Central, for example, where it is more difficult to have livestock, well, you could, in France, use this specifically to support the livestock sector in these more sensitive areas. On the milk market, milk market has been, as well approached by one of you. The milk market, we are, of course, following very closely. We have as well the market health check that we are doing.
And we see we are, of course, worried about the development, which is a multilayer effect. It is because there has been a global, very strong production. And we have as well, in some of the European member states, higher production, and this is, of course, having a direct impact. We have some market turbulences, exports of cheeses to the US or cream and other products to China. And this is, of course, having a cumulative impact.
But all our figures say that we have now hit the bottom and that now we are on a stabilizing point. So I think this is very important to keep in mind. It is important as well to be careful about not sending the wrong messages, because, of course, we know that this will encourage certain producers to push it again, which will, of course, then increase the situation. So it's always a very sensitive thing to do. On some of you mentioned the danger on co-financing rates.
I think it was, but somebody else mentioned it as well. That there might be problems. And I will have to say that the proposal on co-financing rates for the CIP interventions aims, of course, to preserve a level playing field among member states, and the four interventions like the DABIS, the CIS, Cotton and Small Farmers are entirely financed by the EU budget to ensure as well a uniform EU support there. And at the same time, the proposal allows for increased available public expenditure for the CAP by extending the obligation for member states' contributions to additional measures compared to the current period. And, in the NRP plan's proposal, current disparities in member states' average direct payments per hectare are addressed through the formula that determines each member state's overall financial envelope for the NFP.
So, this would then, of course, allow to have a balanced approach. Also, you don't forget that we are currently working with the member states on guidance on how to do that, and I think this will, of course, help a lot. I have more questions, but I don't have time, Assaf.
No. It depends.
Christophe Hansen
Okay. So, maybe I can continue on that.
Miss Boris, you also commented on the budget and the two letters that President von der Leyen sent with the €27,800,000,000. And it's true. Up until this point, there is no specific ring fencing, but this was a request from the member states to ensure that there was sufficient flexibility. However, you, as the colegislator, you can ask for a clearer earmarking on how these funds can be used. I think that's what I'm hearing as well in the council, and another colleague has mentioned that.
They'd like something a bit more fixed, a bit more stable for that envelope. And for me, it's no problem having these more fixed sums and having a bit less flexibility in this sense for the member states. On the trade agreements, it's clear that we depend on our exports. Countries like Japan, like Canada, we have no problems with them because we have common rules. I think that's very important.
These rules don't apply with the US, with China, with those countries. We do have many problems. For me, it's a bit like a marriage. There are two people in a marriage. They establish common rules.
It might be more fun to have another relationship, but at the end of the day, it's more constructive to have this marriage. And I think that's important. Then, there's the issue of differences in the rules. Certainly, in Europe, we have the strictest rules in the world, but we have also made a huge effort with the food and feed omnibus to establish these maximum residue levels at zero. We've introduced more controls too, not just because there is this shared responsibility.
We have customs services. We have our member states who do their own controls at their borders, at their ports. But we, as the commission, we will also do more in third countries on this aspect. I think it's very important to ensure that these certifications are there. Currently, we think it's not rigorous enough.
We have started this work, and we're going to go further with the study that we launched in November. I can see now that I am 15 minutes over my time, so I'll stop there. Thank you.
Veronika Vrecionová
But I think that your answers are very important for all of us. So, thank you. So let's start with KG. If you have one minute. Each patriot's colleague Demetra the first.
Csaba Dömötör
Thank you, chair. Mister commissioner, some days ago, the commissioner announced that it would implement the Mercosur agreement as an interim agreement. The decision was made despite the fact that there were many rounds of farmers' demonstrations here in Brussels and also in Schrezburg. The decision was made, despite the fact that the European Parliament did not approve the deal. On the contrary, it took the issue to the court, which signals an anti-Mercosur majority here.
What makes the circumstances even more scandalous is that not a single plenary debate was had in this house. We had a debate on Congo, Sudan, Georgia, but on Mercosur, none. Zero. While it affects the lives of hundreds of thousands of farmers. You were a member of the European Parliament not so long ago.
May I ask you, as a former MEP, not as a commissioner, in your view, is this procedure democratic? If you were an MEP now, would you find this procedure normal? Would you simply tell a French, a Spanish, or a Hungarian farmer that this procedure is 100% okay? Thank you.
Thank.
Eric Sargiacomo
You, chair. Thank you, commissioner, for coming to this committee again. My colleague has mentioned this. Farmers want to live off their work and off their farms, rather than getting direct support. Unfortunately, we know that farming markets are unstable by nature.
Between geopolitical crisis and climate change, there are more and more shocks. We need an EU to be more reactive to better manage these crises. I want to congratulate you for your action on sugar, suspending the inward processing arrangements on importations. This was necessary. We cannot accept a system of parallel importation, where there are no controls and no limits, that destabilizes our market. You have succeeded in doubling the funding for the Unity Safety Net for the next MFF and refocusing it on market crises.
This is a really good thing. But do you also envisage defining guidelines for the spending of these crisis reserves? The European Court of Auditors has called for this and the same thing for the increase of intervention prices, to trigger the use of this safety net. I think we have to go back to the article 39 of the treaty, the objective, which establishes the objective of the cap is to stabilize markets. Thank you, commissioner, for your presence here.
Gilles Pennelle
You have chosen a good day to go to the agriculture fair where we met each other because you know that two days later, madam Vonderland created great anger in that hall by announcing the approval of the Magrassil agreement. I need to say something today that no other people here are thinking but don't dare say. This decision goes against the will of the parliament. It goes against the vote of parliament. It goes against the CJEU and the will of many people in France, my country, and against the will of many of our farmers.
It brings up a real problem with how our institutions work. The commission is showing scorn for the European parliament. In totalitarian regimes, we see these kinds of problems. And I think that our democracy is seriously in danger.
Jessika van Leeuwen
Thank you, chair. Thank you, commissioner. It's been a while, so good to see you. On the simplification package, you have mentioned several times the 1,700,000,000 savings for farmers, but what does it mean in terms of time savings? I've asked you several times as well.
I hope you have more information on that. And it's good to hear that you have discussed with Commissioner Roswell, because if she does not revisit the nitrate directive, the habitat directive, and the water framework directive, your plans will not be successful. Especially in the light of current geopolitics, there's a phrase I like, which is without more manure, soil will not endure. On the cap, the current plans do not really protect the leveling, level playing field on the internal market as member states have a huge different financial room to top up the cap funding. And by moving sectorial interventions into the CAP envelope, aren't you undermining the resilience of the sectors?
Lastly, I'm happy to hear you mention the livestock strategy. Yesterday, we adopted our initiative report, and I strongly urge you to take this as a major input for your livestock strategy. And I leave you with the key message, innovate and not extensify. I wish you a lot of success. Thank you.
Thank you.
Cristina Maestre
Thank you very much, commissioner, for coming, as always. I wanted to focus on the war in the Middle East and its impact. You've mentioned this, and I would agree with your analysis. There are various refineries that have been attacked. We've got a hike in oil prices, 25% also for gas in terms of increase.
And this, of course, has an impact on our farmers. I also agree with you. There is no magic bullet or silver bullet. You talked about, you know, the possibility of not having CBAM here. That would be nonsense because it's actually a tool for reciprocity vis-à-vis third countries requiring that they abide by our standards.
Then in terms of using the CAP to respond to the crisis to withdraw it, I think that would be really just a medium term solution, and it wouldn't work. I don't think that this is an adapted instrument to this kind of reality, to this kind of economic crisis, which is basically the outcome of our own weaknesses. So, 26, what's your proposal for that day? Are you talking about withdrawing tariffs? Are you talking about other direct measures?
You know, these are linked to the current conjuncture, to the current economic situation, the conjunction. What more can we do?
Thank you, Cheryl speaking Portuguese.
Paulo do Nascimento Cabral
Thank you very much. Thank you, commissioner. Thank you for your presentation, which I think demonstrated that you stand by this sector, and thank you very much for the work that you do in that regard. I hope that before the end of your term of office, you'll be able to also answer my questions, perhaps in Portuguese, as you have done in other languages. Now, I'd like to raise the question of the outermost regions, if I may.
We heard a presentation earlier in this committee. We talked about production prices. We talked about inflation and the impact that this has on outermost regions, and how we can support farmers, therefore. Now I was wondering, in terms of the single market and in terms of the directive or the regulation, I'd like to know what you intend to do in order to defend the European mechanism for reinsurance in the farming sector. This is important for Portugal.
So I'd like to sound you out. What does the commission think about this? Do you think it's a good measure for the farmers? Yes or no? And particularly for the farmers in the outermost regions.
Stefan Köhler
Also, we've talked about co-funding or co-financing in this area. You know, I'd like to hear a little bit more detail about that. Thank you very much for this opportunity. Thank you for talking to us. We've talked about the crisis in Iran, oil prices, the hike in oil prices.
I wanted to raise something else: biofuels. Biofuels, I think this is an opportunity really to intervene there and help our farmers. Thank you, by the way, for communicating that particular message to the rest of the commission, to the college. Fertilizers, we've talked a lot about that already. Prices, I think we need to continue to work on that.
Speaker 60
And, of course, substitutions, alternatives, but that's not something we can do overnight. You know, we want to have organic fertilizers available.
Stefan Köhler
We also need to have new developments in terms of the nitrates directive, and that needs to be implemented as soon as possible. Thank you.
Renew colleague Mulally.
Ciaran Mullooly
Commissioner, your boss is on the road again next week. President Van der Leyen goes to Australia, and we hear about the strategic importance, as you say, of safeguarding agricultural sectors within the European Union. So I ask you today, will the commission commit to treating key agricultural products such as beef, lamb, and dairy as sensitive products within the EU-Australia trade deal? You follow up your words of supporting dairy, supporting other categories. Will you give that advice to the president?
Simplification was a big theme you had today. I want to tell you about the Sutclair carbon efficiency program commissioner in Ireland, a five-year scheme designed to encourage and maintain Sutclair cow production in our member state. Came at a time when beef count numbers were falling, just in Ireland, a reduction of 7,000,000 across the EU, and a quarter million in Ireland. But what happened to the scheme? 5,000 people, farmers, have left the scheme.
They're being forced to hand back millions of euros. Why? Because your commission and the Irish member state made it impossible for farmers to comply. They changed the rules every year. SCEP has been an unmitigated disaster.
Please put it at the top of your simplification list and take it on. And in terms of cap going forward, please note the comments of the members of this House. Three committees said the new cap structure without the second pillar is unworkable. Please listen to them and take their advice. Thank you.
Maria Noichl
Thank you very much. Four points, if I may. The proposals you've made for the CAP don't actually include indicators in terms of effect. In terms of the long-term prospects, what do you intend to do about this? I mean, hectares?
What about measures for biodiversity? I don't think it tells us very much if you just base it on hectares. Question two: The target or the milestone when it comes to the regulation. I'd like to know what's going to happen in the future. How is the commission going to act, and how are member states going to be encouraged to look at this intervention area and take the necessary measures in that regard?
Third question. There are studies right now that show that biodiversity, you know, is positive for farming. I'd like to know to what extent this has been reflected in the CAP proposals. Isn't this something that we could include in more detail, for instance, in the inventory, in the catalog, in order to promote fragmentation? And also in terms of access to that soil, to that land, that's a big challenge for farmers.
And, again, my question to you: what about the end beneficiaries? We need to know who they are. It's not just a question of how much money the farmers are receiving, but the final beneficiaries, who are actually receiving the money from these payments ultimately. That's what we'd like to know as well.
Charles Goerens
I'm so sorry. I think I heard you say Missus Goren, so I didn't respond. It is not the case yet. There we go. Let me come back to the question of Mercosur, please, the Mercosur agreement.
I had a bit of a chat after this vote in the European Parliament on compatibility between that agreement and the treaty, and, in fact, with you, commissioner. We had a little chat, and we agreed that we would perhaps hold an information session here in this committee and carry out a kind of simulation exercise, you know, in terms of implementation, application of safeguard measures. You know, a lot of things have been said. The opposite has been argued as well. I think it would be a good idea to shed some light on this issue and to bring in some experts, perhaps, you know, from the parliament, but also the commissioner responsible for trade, for external trade.
Let's bring them in as well. And what about, you know, has that question been raised, and has an answer been given to you yet?
Gram singer, please.
Christine Singer
Thank you. The Industry Emissions Directive Commissioner, I'm a rapporteur for AGRI on that point, and I've taken note of the proposals from the Commission. They don't go far enough. You've got threshold values that are being lowered, so more holdings are being affected. And of course, it seems to me that these provisions have been designed primarily for large holdings.
You have to remember that the fixed cost, the overheads, are the same for small holdings as for large ones. Also, a critical point, aggregation. Aggregation and the sort of artificial increase in the threshold values there. Also, we've got imports of products that are not subject to the same standards as the ones here, so I'd like to hear more from you on that, Commissioner. And my question to you, looking at these threshold values and the aggregation rules, would you be prepared to revisit these with us in order to make them more workable for the future?
Or do you think that this is just practice that you need to continue? Are you actually working towards a level playing field in terms of imports? I understand that the commission is coming forward with a proposal on livestock farming, on breeding. We adopted a long catalog of this yesterday. I think it's important to be consistent.
We have, you know, a strategy for the European Union in terms of livestock farming. Let's be consistent with that. Again, for farmers in Europe, I would say these are not industrial plants. They shouldn't be treated as industrial entities. Thank you.
Luis-Vicențiu Lazarus
I will speak in Romanian. Commissioner,
Allow me to contradict you, if I may. You talked about milk in the market. You said there was too much milk on the market. Well, let me set the record straight on that. Dairy farmers are selling milk 30¢ per liter as, you know, the product leaves the farm.
But what about production costs? Production costs might be like 50¢, 60¢ at the very least. And how much does that milk then cost in our supermarkets? About €2. Now if the quantity of milk were that big on the market, then how would the supermarkets be able to actually sell milk at a cost of €2 per liter?
Clearly, there's speculation going on here. There's speculation, and they're basically also working against the farmers, against the dairy farmers, trying to get rid of them. They're making huge profits. Secondly, a second question, this one's on Romania more specifically. In Romania, we don't have the right to export live animals, and we have not been able to do so for a year now, particularly for sheep.
So we have a problem, and the commission doesn't seem to be doing anything about it at all. The commission has banned Romania from exporting live animals within the EU. Now bear in mind that in The Middle East, we can, you know, no longer export either. So what do you want? Don't you want us to produce milk?
Don't you want us to export our live animals? Well, let's be clear about that then. Say so. Come out and say so.
Okay. Thank you.
Céline Imart
Thank you, madam chair, and thank you, commissioner, for the excellent work that we've been doing together, in fact, since the day you took up office. Thank you for the progress made on a number of dossiers, simplification, the place of farmers in the value chain, and also, thank you for the way in which you work with us. You're so constructive with us as MEPs. Thank you. I commend you on that.
Now, the work of the European Commission talks about European food. And I think that's an excellent objective. You know, we need to look at the European food. This shouldn't just be sort of, you know, the background music while we steer the Titanic into some kind of iceberg, the iceberg of unfair competition, in particular when it comes to fertilizers. We need to deal with that issue.
And I'm afraid for the time being, this is something that is dealt with by your colleague in the environment sector, as does habitat, birdlife, etcetera. So I'm a little bit concerned. I'm wondering, this campaign, which is so essential in terms of promoting farming, how is that campaign going to be rolled out without stigmatizing some products such as wine or indeed meat? Second question, labeling of origins. Consumers want greater transparency, particularly on the country of regime.
Sakis Arnaoutoglou
So, commissioner, how do you intend to make progress on that particular issue, labeling of origin? Thank you. Thank you very much. I shall speak Greek. So first of all, thank you.
Thank you for all the work that you're doing, particularly under such difficult circumstances. I wanted to ask you a question. I don't know whether you have the answer to this. But in Europe we don't have free access for farmers to some products. We have free trade, but not free access.
So what is that all about? We're talking about a single market. How can that be when you're actually prohibiting farmers from having access, for instance, to veterinary medicine, you know, from another member state, for instance? I don't know whether you're aware of this, but this is an issue. Greek farmers, for instance, can't purchase veterinary medicine from Bulgaria, for instance it's not possible, so this is a problem and I wanted to raise it before you and my colleagues.
Another point, you know, Turkey, Albania, there are products coming in from these countries that have basically flooded the market. And I have a question for you, commissioner, if I may. How can we check this? How can we control this? I mean, we're not really keeping an eye on what's happening in Albania or in Turkey.
So how are we going to then check the things that might be happening with Mokoser in that case?
Tilly Metz
I just had the headset on. Yeah. Okay. Sorry. So, good morning, commissioner.
Moya Christophe, It's a pleasure to have you here again in the agri committee even though we met yesterday on an interesting event on mobile slaughtering. By the way, while we are also still waiting since 2023 for the revision of the regulation, I will not come back to the end of cage age. We discussed it yesterday with Commissioner Bahayli. I just hope that you confirm that we will cover all caged animals step by step, so sector-differentiated. Another topic I want to address is for the second quarter of this year, you are foreseeing the publication of the protein strategy.
And there, could you elaborate on whether this strategy will actively contribute to greater protein diversification in Europe and help reduce also our external dependency? In particular, will it take into account dietary guidelines, the balance between food and feed use, and also the entire value chain from production to consumption, as well as the environmental and social tell, externalities linked to animal protein production. We know that the protein strategy is key also for the ecological transition and will also reduce dependency of farmers. Thank.
Maria Grapini
thank you very much. Thank you, madam chair. Commissioner, I have so much to say to you, but so little time, unfortunately. Situation in Romania, the fertilizer plant that was closed down. It's a longstanding problem, and we don't quite know how we're going to supply fertilizers to our farmers.
We actually depend on imports from third countries, and fossil fuels are used to produce those fertilizers, unfortunately. That's a problem. Secondly, a point I raised with your colleague, Mister Varghai, as well. We know that practices are different in our member states. For instance, we voted in favor of a reduction in the percentage of fertilizers.
And I was wondering, are you going to ask for a minimum level for each member state in terms of pesticides? And also, what about exports, maybe towards the Chinese market for milk or for other produce? The commission has been talking about a budget to try to support the eastern part of the continent in order to help them, you know, make up for the consequences of the Ukraine war. Thank you. Commissioner, thank you for coming again before this committee, and thank you for putting so much energy into our sector.
Benoit Cassart
Thank you. We've talked about stability of prices for farmers' income, but we don't speak enough about the fact that if you want to have a stable price, you also need to have, you know, reasonably well-regulated international trade. My colleague here by my side just said this a moment ago. Next week, Ursula von der Leyen is supposed to sign an agreement with Australia. I'm wondering, and I know you did this for India, are you also going to take into account the global impact of this agreement for European agriculture in terms of quantity, for instance?
Do you have some figures maybe that you could share, because it's all very nebulous for the time being, quantity for milk, for meat, for sheep meat in particular? And do you have any details regarding equivalence of standards and compliance with our rules, anything on that? And thirdly, I'd like to know whether, broadly speaking, I know, of course, that the commission is chasing a number of free trade agreements with other countries. Have you actually conducted an impact assessment on the cumulative effect of these FTAs on the European market? Thank you.
Thank you, commissioner.
Thank.
Katarína Roth Neveďalová
Thank you very much, commissioner. We've talked about fertilizers, sorry. We've talked about sugar. We also know that there are a lot of closures. There are restructurings underway.
I wanted to ask you a question. Do you have any proposals to try to support the sugar sector in particular in Europe? That would be my first question. Second question, this time on fertilizers. Yesterday, there were further attacks on oil fields, and we can see that prices are going up.
And I understand that, you know, we have this opportunity to have a structured dialogue. I welcome that. I understand also that you're preparing some kind of plan for fertilizer, but I haven't really heard any details, any specific details. What's being done in terms of support for those who produce? Are you planning on restructurings?
What about biogas? What about measures in that area? I'd like to hear a little bit more about what you plan in this regard. How do you assure that we are supporting our farmers in Slovakia included? Because in Slovakia, the situation is pretty problematic, like elsewhere in Europe.
Thank.
André Franqueira Rodrigues
you. Commissioner, may I come back to the question of milk, please? We know about the pressure being exerted on producers, increasing pressure, in fact. You know, often, you have production costs, but the sale cost is actually below them. We also have produce coming in from China, from elsewhere.
We have volatility as well, and commodities, etcetera. We have fluctuations in prices. And there are some areas that are really suffering from a lot of pressure in this regard. The price of milk is really problematic for a lot of producers. We have to recognize that.
So we've talked about this, and I wanted to ask you. Does the commission intend to take any measures, for instance, to try to voluntarily reduce the volume of milk produced to cut that, bearing in mind that this is a problem that affects a lot of us?
Veronika Vrecionová
I would also like to have one question, sir, but I speak Czech. Virginia Panik.
Commissioner, the EU rules are clear. When allocating subsidies, we are not supposed to take into account artificial corporate divisions. Small farmers often approach me about this. Should we charge companies by the final beneficiary? Would this not be more suitable, I. E, also take into account more complex structures, including holdings?
Because today, the big structures are not really taken into account very much, whereas the small holdings face heavy controls, heavy checks. Also, can there be some harmonizations because there are differences in interpretation between member states?
So it's, again, time for Commissioner Hansen for your answers.
Christophe Hansen
Yes. Thank you very much. And, again, a lot of questions, but I will start with Mr. Demeter's question. What would I have done if I was still sitting on your side? I would maybe turn it around.
You say to me that you have, that there is a majority against this agreement. If there is a majority against, why didn't you take this chance on the consent vote? Because that is, of course, what you can do, and that would then, of course, send an agreement to the other side. On the other hand, when you speak about democracy and democratic decisions, there is a large majority as well in the council that gave the commission the mandate, and maybe not yours. I can see that.
But this is, of course, as well, the way the proceedings are. So, with that, of course, you cannot, the parliament is not voting on the consent, which is its right. And if it votes against, while the agreement does not materialize, you didn't want to have that choice. You preferred to put it on the long bench, knowing what the presidents were saying. So, of course, this is not the way forward.
If you are so convinced that there is a majority as an institution against this, you should have taken it to the vote, and not something else to the vote in order to gain time. On the question of sugar, which has been mentioned,
A question that was raised by my colleague, Mister Sadia Kombo, but also by Missus Nidliceva.
Pronouncing that.
Christophe Hansen
So just so you know, we have taken tangible measures. In fact, I announced this at the AgriFish Council to suspend the active processing arrangement. And I think that's actually something that will have an effect, because now we're talking about, and by the way, Mercosa, 190,000,000 tons of sugar coming in. Well, Ukraine, 100,000 tons coming in. But on the other hand, the active processing arrangement also means 7,000 tons at zero tariff, tariff-free.
Now that's suspended. And that means that this will actually provide, I think, support for our second sector, sorry. For sugar beet here in Europe, it will be a form of support. I think it's important to acknowledge that. And this will also potentially have an impact on other sectors.
We try to see what we can do there. Sometimes we hide behind certain regimes that have been there for quite a long time, which actually have a much more nefarious effect than some agreements with tariff-free quotas, which are very specific. So let's follow this closely. Mister Sergio Como, you also raised a point regarding the safety net, Unity Safety Net. Obviously, we'll have more money in the future than we do at present.
Notwithstanding, I'm convinced that this money is money that needs to be deployed in order to deal with market upheaval rather than just scattering it for, you know, all sorts of different crises, climate crisis, and other crises besides all the crises we know about. This is really for markets, and we need to work together in order to fine-tune that mechanism, in order to look at the way in which that is distributed. We will work on that. And, of course, there will be pressure from the member states. Needless to say, for member states, it's much easier to, you know, cut something maybe from the current agricultural reserve, 450000000.
It's not an awful lot, let's face it, rather than looking at other funds that are available to the member states and going in there and doing it. So these are structural questions in terms of, you know, climate issues, for instance. Other funds will have to be relied upon rather than the unity safety net.
Christophe Hansen
believe Mrs. Van Leuven raised the same question as a number of other MEPs. The nitrates directive? I am convinced. And by the way, I think I gave you an example of the implementation dialogue together with Yeshigar Rosval.
The situation in the Middle East, needless to say, has shifted the paradigm. It's changed the situation, and it continues to do so. It's still underway. That's why we need to look at all the different starters, all the different levels, and see what we can do. And that holds true for the fertilizer action plan, but also the livestock strategy holds true for those as well.
Because needless to say, livestock can have negative effects, but there can also be potentially positive effects. And that's why we need to leverage that as much as possible in order to cope with the various forms of pressure coming in. Missus Maestro, you asked me a question about energy prices. Obviously, we don't really have a lot of influence, I'm afraid, on what's happening right now in the Middle East or in Iran and in that part of the world. But nevertheless, I think we need to look at how we can reduce this.
We talked about biofuels. I think that's a lever. That's a potential tool. We don't use it fully for the time being, so that's one possibility. Also, if the situation continues as it is currently, then I'm afraid agriculture won't be the only sector that will be facing this predicament, this situation.
You know, again, there are matters of national competency that come into play, but we need to look at tariffs, customs tariffs, and we need to look at excise duties. You know, we'd need to see whether we can make them a little bit more flexible, but be that as it may, you know, you have national budgets, and it means that national budgets will be a little bit more strapped for cash, a bit less money, and that is something that we have to factor into this equation. But energy is not my direct brief. Having said that, agriculture as a sector can make a contribution to reduce these dependencies that we currently have.
Mister Cabral, Donacciamento. Yes. Portuguese, I still don't speak. I understood it a little bit when I
I was in Portugal when I spoke to the farmers.
Christophe Hansen
I spoke, and it worked rather well, I have to say. But, of course, the visit the aim of my visit was not a nice one. After the several succession of storms, I saw the devastation of forests, more than 200,000 hectares of forest, which is, by the way, a severe risk of forest fires in the next summer if the wood is not taken out at the time, but as well the destruction of pig farms, of greenhouses where the entire infrastructure is just lost. And when I ask the farmers, do you have an insurance? They say, we would love to have one, but there is no insurance company insuring this, and there were adult men lying in my arms crying because they had, for the second time, lost everything.
They would like they haven't even paid back the reconstruction from last time, and now, again, everything is down. And I think that is something where we need to work, and I'm in close contact with the European Investment Bank for a reinsurance system. And I think we have, of course, probably we'll go into the direction of a pilot project first to see how this can work, but this is really, I think, a game changer because we can, and I said it to, Eric Saljakomo, when we, the 450,000,000, if we use it for all the crisis we have, well, there is nothing left and it's no efficiency at all. And I think with very little money, we could do a back such a reinsurance system to give, as well, the possibility for insurers to handle the risk and therefore give as well certain guarantees to the sector. And this is really forward looking because climate crises are becoming ever more frequent.
I went after Portugal. I went to Andalusia. The situation was quite similar. We had as well in Malta, in Southern France, floods, and this is really something where we need to do better, because this is as well about the generation renewal. Because with such high risks, nobody will get financed by a bank.
Nobody will launch in the business where you know you can be hit every second or third year again. And this risk needs to be taken away, because otherwise, it's only crazy people that would go to the sector. And I think we need the smart people that make the business case, to go to the sector, and that is what we need to enable. Mister Lazarus, on the milk sector, I don't know if you have better follow-up than my service on the milk evolution and the prices, combined with the production capacity and output. My figures show very clearly that there is and has been, last year in August, a severe increase of production, so of milk available on the market, and this directly has, of course, an impact.
We can argue about production costs. I visited in Romania a very big farm of 2,200 dairy cows, and I can tell you they are very productive, and they will not produce with a 50¢ per liter. There are some that are producing with 50¢ per liter, yes, but that are not the competitive ones that will be able to face the market, and we need our challenge would be to bring these production costs down from 50 to something more moderate. And I think that has to be the challenge, but you are not right when you say there has not been more milk on the market. The figures are very clear about that.
Cheryl Gurens.
Christophe Hansen
My Luxembourg compatriot. I'm happy to hear have heard from two of you today, Safeguard measures. Yes. Obviously, we are absolutely available to have discussions with you and do what we can to put in place a simulation exercise to, if we get that going on the ground in conjunction with DG trade, for example, that could be valuable. So we're absolutely happy to do that with you.
Chuck Lakau, I read this morning, but I need to look deeper into that. So if you are willing, please give me your details on that, and then we can find out what is at stake and where lies the responsibility to that. Then, Tilly Metz, on the livestock sector and the plant protein. I will not impose on anybody what he or she needs to eat and what they don't need to eat. I think that is, from my side, very clear.
But, I think there is a clear mismatch sometimes between what the consumer asks for and what the farmers are producing. And I think this mismatch, we need to reduce it. And there are initiatives as well to encourage farmers to produce, for example, protein crops. I think that is very important. But what is still missing is the value chain that comes after that.
And I think there we need to intensify our work, and deliver what the consumer is asking for. But for me, it is very important that we do this together with the sector, and the same goes for the livestock strategy. There, missus Singer addressed as well the question on the industrial emissions, directly for me. I have to say, and I was, as I said, as well sitting on your side, I was not happy that poultry and pig sector remained in this frame because I believe a farm is not an industry even if they're bigger and smaller farms, and that we should find technical solutions rather than to break models, especially when we complain about unfair competition with third countries that may have other possibilities because I have to say size does not say you are more or less sustainable. You can be a big farm and have the best technology and maybe be less pollutant than many smaller.
And I think that is something where we need to be prudent on what we are saying.
On Australia, and it wasn't just true, I think Benoit who raised this question, we don't have the most up-to-date figures quite yet. As you said, we've sought to obtain these. Since 2023, we've been trying to tie up negotiations, and we thought that we were getting there. Thirty-five thousand tons was the figure that was being rooted then. But as far as I've heard, Mr. Bennett, the figures are higher now.
I'm sorry. The figures are going to be lower. They're going to be lower. What I heard in the Salon de Graigoutou. There's nothing in the public domain yet, but it will be less than that.
For beef, it certainly won't be 35,000, even on the table. But I really cannot give you anything more up to date because the figures are not available, and it is not been negotiated definitively, let alone made available publicly.
Indeed, on the biofuels, I think we have to do some work. There is potential as well to stabilize. I'm looking to Eric Sajakum as well because I know that is a topic that is dear to your heart, to use better more use of biofuels as well to stabilize the markets when, for example, cereals or sugar fall below a certain level of price, that then the refineries that have capacity could refine more. But this goes along as well with reviewing, and that is, was the proposal of Mister Koehler to look into the fuel quality directive. I think that is very important, because you cannot just say you can refine more, but there is not the market for it.
And I think also on the renewable energies directive, where we need, would need to make certain adjustments in order that this system is working as well. But I think the window of opportunity, but as well the necessity window of necessity that we currently have is really one that we need to take seriously. The energy crisis due to the Middle East conflict is one that is there, and I cannot predict the outcome. But, of course, we have to foresee as well for the future that such crisis can be at least appeased a little bit, and we can contribute. And, also, somebody said earlier, I think it was Mr. David about agriculture versus defense.
I have to tell you, agriculture has the potential to do food security. I think we are very good on that. On energy security, we can be way better. I just spoke about biofuels, but we can as well speak about biomethane, biogas, we have huge potential, but it's often I'm looking to mister Cabral again when I was now in Portugal. I visited as well.
Pig farms, and there are 30 farms together that want now to do the biogas. They have now waited, I think, more than 10 years, but finally, it's going ahead. And that is something where we need to work on these procedures to have efficient structures and partnerships as well with the energy providers that are really working. And then a third point on security where our farmers deliver, and that is the physical security as well. And when you look and visit our eastern border regions with the borders with Belarus or with Russia, without farming, there would be not much left.
And I spoke in Estonia to a general, and he told me if there would be war, I would need farmers here. And I asked him why? Well, farmers know how to drive heavy machinery. Farmers know exactly the landscape, whether it is wet, where you can pass, and where not, and in what period. So that is something very important where we need to keep in mind that farmers as well on the security side, the physical security, are a very important point.
And, therefore, we need more resilient farmers for the future, and that is why we need to continue this constructive work. Thank you.
Thank you.
Veronika Vrecionová
So we are in the end. Thank you very much, okay. But it depends on the commissioner.
It's okay.
25 questions.
Veronika Vrecionová
So commissioner answers everything. Maybe you can. Okay. Thank you very much. So, commissioner, we are looking forward to seeing you again.
Thank you for that you came here. Thank you for this important discussion and their colleagues. Just I open any other business, but I don't see anybody. And in this case, our next meeting will be on April 8 here in Brussels. Have a nice day.
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