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Summary

  1. Top of page
  2. Summary
  3. Flanders, a densely populated region with an important agricultural sector
  4. Despite ongoing difficulties, the sector maintains its output, albeit with fewer businesses
  5. Ongoing restructuring, in order to remain competitive
  6. Average farm incomes remain low
  7. Environmental pressures from agriculture have decreased
  8. The need for a strong European agricultural policy
  9. The European agricultural model remains the starting point
  10. Reforming direct support
  11. Modernising market and price policies
  12. Investing in a competitive and sustainable agriculture
  13. A future CAP serving a wide range of needs and challenges
  14. Further Reading

A Competitive, Sustainable and Diverse Agriculture: A View of the CAP Beyond 2013

New challenges make clear that past achievements of the CAP cannot be taken for granted. A strong European agricultural policy remains necessary after 2013, at the service of Europe’s citizens and agricultural sector. However, in order to realise the vision embedded in the European agricultural model, the CAP will have to evolve. Beyond dealing with the negative consequences of the economic crisis, more attention should go to competitiveness and entrepreneurship. The functioning of the supply chain should be improved leading to a fairer distribution of costs and benefits. Producer organisations should be expanded and strengthened. Work is needed to put into practice the concept of green growth and to explore the synergy between the demand for public goods and the need for higher farm income. An improved system of direct support remains justified, to compensate for extra costs and to stabilise income. The CAP post-2013 should offer a strong EU framework, able to meet shared challenges, with clear objectives and sufficient funding. Within that framework, diversity is a fact, and regions should be able to deploy CAP policies and funds in a more flexible way to accommodate local needs and problems and to be able to react to changing circumstances.

De par l’apparition de nouveaux défis, il est clair que les réalisations antérieures de la PAC ne peuvent être considérées comme acquises.Une politique agricole européenne forte, au service des citoyens et du secteur agricole de l’Europe, reste indispensable après 2013. Cependant, pour concrétiser la vision comprise dans le modèle agricole européen, la PAC devra évoluer. Au-delà du traitement des conséquences négatives de la crise économique, l’attention doit se porter davantage sur la compétitivité et l’esprit d’entreprise. Il faudrait améliorer le fonctionnement de la filière de l’offre pour obtenir une répartition des coûts et des avantages plus équitable. Les organisations de producteurs devraient se développer et se renforcer. Des travaux sont nécessaires pour mettre en pratique le concept de croissance verte et pour étudier les synergies entre la demande de biens d’intérêt public et le renforcement nécessaire des revenus agricoles. Un système de soutien direct amélioré reste justifié, pour compenser les coûts supplémentaires et stabiliser les revenus. La PAC d’après 2013 devrait fournir un cadre européen solide, capable d’atteindre les défis partagés, avec des objectifs clairs et des financements suffisants. Au sein de ce cadre, la diversité est un fait et les régions devraient pouvoir déployer les politiques et les fonds de la PAC de manière plus flexible pour répondre aux besoins et problèmes locaux et pour permettre de réagir aux changements.

Neue Herausforderungen lassen erkennen, dass die früheren Erfolge der GAP nicht als selbstverständlich angesehen werden können.Nach 2013 wird zum Wohle der Bürger und des Agrarsektors in Europa nach wie vor eine stabile europäische Agrarpolitik gebraucht. Die GAP wird sich jedoch weiterentwickeln müssen, um der Vision aus dem europäischen Agrarmodell entsprechen zu können. Das Augenmerk sollte hierbei nicht nur auf den Umgang mit den negativen Auswirkungen der Wirtschaftskrise, sondern ebenfalls auf Wettbewerbsfähigkeit und Unternehmertum gerichtet werden. Die Funktionsfähigkeit der Wertschöpfungskette sollte erhöht werden und zu einer gerechteren Verteilung von Kosten und Nutzen führen. Erzeugerorganisationen sollten ausgeweitet und gestärkt werden. Es muss viel getan werden, um das Konzept des Grünen Wachstums umzusetzen und die Synergien zwischen der Nachfrage nach öffentlichen Gütern und der Notwendigkeit für höhere Einkommen in der Landwirtschaft zu untersuchen. Ein verbessertes System für die Direktzahlungen ist nach wie vor gerechtfertigt, um zusätzliche Kosten auszugleichen und die Einkommen zu stabilisieren. Nach 2013 sollte die GAP einen stabilen EU-Rahmen bieten, um den gemeinsamen Herausforderungen mit klaren Zielen und ausreichender Finanzierung begegnen zu können. Innerhalb dieses Rahmens ist Platz für Diversität, und die Regionen sollten dazu in der Lage sein, die Politikmaßnahmen der GAP flexibler einzusetzen, um auf die Bedürfnisse vor Ort reagieren und sich den wechselnden Bedingungen anpassen zu können.

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The European Commissioner for Agriculture and Rural Development, Dacian Cioloş has indicated that work on the Common Agricultural Policy (CAP) for the period after 2013 is the main priority for his term in office. In April of this year he announced a public debate on the future objectives and tools of the CAP post-2013. The conclusion and ideas of this public debate will be presented at a conference in July, and will feed into a Communication on the future of the CAP, that will follow later in 2010. Both the conference and the communication will take place during the Belgian EU presidency (second half of 2010), thereby putting the discussion on the future CAP even higher on our agricultural policy agenda. Being a federal state, agricultural policy in Belgium is largely taken care of by the regions – Flanders (North), Brussels (around the capital) and Wallonia (South). Most of the CAP legislation, policies and programmes are being discussed, translated and implemented by the regions. Therefore, the move towards an improved CAP also tops my list of priorities, as Minister for Agriculture and Fisheries for the Flemish region.

In this article, I would like to describe agriculture in Flanders: its characteristics, strengths and future challenges. Based on that, I will outline a number of key points-of-attention for the upcoming CAP reform.

Flanders, a densely populated region with an important agricultural sector

  1. Top of page
  2. Summary
  3. Flanders, a densely populated region with an important agricultural sector
  4. Despite ongoing difficulties, the sector maintains its output, albeit with fewer businesses
  5. Ongoing restructuring, in order to remain competitive
  6. Average farm incomes remain low
  7. Environmental pressures from agriculture have decreased
  8. The need for a strong European agricultural policy
  9. The European agricultural model remains the starting point
  10. Reforming direct support
  11. Modernising market and price policies
  12. Investing in a competitive and sustainable agriculture
  13. A future CAP serving a wide range of needs and challenges
  14. Further Reading

With 456 inhabitants per square km, Flanders ranks among the most densely populated and urbanised regions within the European Union. Despite that and thanks to very favourable conditions, agriculture remains an important and diversified sector of the economy. Figure 1 gives some insight into the types of agriculture that can be found in Flanders. This regional clustering can be explained by historical factors and by differences in soil condition.

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Figure 1.  Agriculture in Flanders

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In 2008, Flemish agriculture had 623,700 ha under production, accounting for 46 per cent of the total available land area in Flanders (EU-27 average: 42 per cent). The average farm size was small compared to other EU regions (19.5 ha in 2008; 21 ha in 2009), as a result of the shortage and high cost of land, and of the high relative importance of some specialities like pig farming and horticulture. Meadows, pastures and fodder crops account for more than half of agricultural land use, while arable farming and horticulture cover the rest of the surface. Flemish livestock consists of 1.3 million cattle, 5.9 million pigs and 27.1 million units of poultry.

Despite ongoing difficulties, the sector maintains its output, albeit with fewer businesses

  1. Top of page
  2. Summary
  3. Flanders, a densely populated region with an important agricultural sector
  4. Despite ongoing difficulties, the sector maintains its output, albeit with fewer businesses
  5. Ongoing restructuring, in order to remain competitive
  6. Average farm incomes remain low
  7. Environmental pressures from agriculture have decreased
  8. The need for a strong European agricultural policy
  9. The European agricultural model remains the starting point
  10. Reforming direct support
  11. Modernising market and price policies
  12. Investing in a competitive and sustainable agriculture
  13. A future CAP serving a wide range of needs and challenges
  14. Further Reading

The final value of Flemish agricultural and horticultural production in 2008 amounted to €4.98 billion – the highest value in the last nine years – 1.2 per cent of the overall Flemish GDP and around 75 per cent of the national agricultural production value. More than half comes from livestock farming, about a third from horticulture and a tenth from arable farming. Within livestock farming the most important products are pigs, milk and cattle.

In trade terms the sector also carries weight. Flanders accounted for 83 per cent of Belgian national agricultural exports in 2008 and thereby contributed significantly to the Belgian trade surplus. In fact, Belgium has the fourth biggest agricultural trade surplus of all EU member states, after the Netherlands, France and Denmark. Intra-EU trade accounts for a significant portion: 73 per cent of imported agricultural products comes from the EU and 84 per cent of exported agricultural products goes to EU member states.

However, good performance at a sector level, as measured in 2008, disguises the tough conditions faced by individual businesses and the negative effects of the recent economic crisis.

Ongoing restructuring, in order to remain competitive

  1. Top of page
  2. Summary
  3. Flanders, a densely populated region with an important agricultural sector
  4. Despite ongoing difficulties, the sector maintains its output, albeit with fewer businesses
  5. Ongoing restructuring, in order to remain competitive
  6. Average farm incomes remain low
  7. Environmental pressures from agriculture have decreased
  8. The need for a strong European agricultural policy
  9. The European agricultural model remains the starting point
  10. Reforming direct support
  11. Modernising market and price policies
  12. Investing in a competitive and sustainable agriculture
  13. A future CAP serving a wide range of needs and challenges
  14. Further Reading

In 2009, there were 29,500 farm businesses in Flanders. Since 1998, the total number of businesses has been declining every year by, on average, 2.9 per cent. This trend has been more pronounced among smaller farms, and is expected to continue for some time, mainly due to ongoing sectoral restructuring, increased capital and other requirements, and an absence of successors.

The demographic result of this ongoing restructuring is a cause for concern. The average age of farm business managers has been continuously increasing, to 49 years in 2008, with only 2.6 per cent of business managers under the age of 30, while 7.5 per cent were over 65. As for scale, in the last ten years the average area of arable land per business has increased by nearly 50 per cent, up to 21 ha in 2009. In livestock farming, similar observations can be made with regard to the number of animals.

“Le modèle agricole européen reste le point de départ de ma vision sur l’avenir de la PAC.”

Increased size and changing demands from downstream operators (processors and retailers), a more market-oriented CAP, as well as new emerging non-EU competitors were important drivers of these changes. However, in Flanders not all sectors within agriculture have been able to cope with these pressures and remain competitive.

Average farm incomes remain low

  1. Top of page
  2. Summary
  3. Flanders, a densely populated region with an important agricultural sector
  4. Despite ongoing difficulties, the sector maintains its output, albeit with fewer businesses
  5. Ongoing restructuring, in order to remain competitive
  6. Average farm incomes remain low
  7. Environmental pressures from agriculture have decreased
  8. The need for a strong European agricultural policy
  9. The European agricultural model remains the starting point
  10. Reforming direct support
  11. Modernising market and price policies
  12. Investing in a competitive and sustainable agriculture
  13. A future CAP serving a wide range of needs and challenges
  14. Further Reading

In 2008, 60,500 people were regularly employed in Flemish agricultural and horticultural businesses, representing 1.8 per cent of total employment in Flanders. This employment is predominantly family based. However, in line with the declining trend in the number of businesses, this number has continuously fallen; a reduction of 16 per cent since 2001.

In 2008, Belgian agriculture recorded a real agricultural income per worker (Annual Work Unit) of €26,600, which is among the highest within the EU-27 (EU-27 average: €12,260). However, this does not always translate into sufficient income for farmers. Studies consistently show that, on average, agricultural income in Flanders is significantly lower than comparable wages outside agriculture. The general economic crisis did not change this relationship. According to Eurostat, real agricultural income per worker in Belgium was down 25.6 per cent in 2008, the largest decline in the EU-27.

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Increasingly Flemish farmers choose to diversify their incomes. Flanders has almost 4,400 farmers having at least one diversification activity, e.g. tourism, social care, local production and farmers’ markets.

Environmental pressures from agriculture have decreased

  1. Top of page
  2. Summary
  3. Flanders, a densely populated region with an important agricultural sector
  4. Despite ongoing difficulties, the sector maintains its output, albeit with fewer businesses
  5. Ongoing restructuring, in order to remain competitive
  6. Average farm incomes remain low
  7. Environmental pressures from agriculture have decreased
  8. The need for a strong European agricultural policy
  9. The European agricultural model remains the starting point
  10. Reforming direct support
  11. Modernising market and price policies
  12. Investing in a competitive and sustainable agriculture
  13. A future CAP serving a wide range of needs and challenges
  14. Further Reading

The only negative environmental trends between 2000 and 2007 have been the sensitivity of land to erosion and, in the last few years, the pressure on water life from pesticides. Since 2000, both emissions to air (acidifying pollutants like SO2, NOx and NH3) and emissions to water and soil (nitrogen, phosphorus) have fallen substantially by 28 and 67 per cent, respectively. This reduction was due to fertiliser policy, which is targeted at taking stock of nutrient flows and reducing surplus nutrients, and to the adverse economic climate; both of which resulted in shrinking livestock numbers. The fertiliser policy also brought about a lower use of synthetic fertilisers, a greater uptake of low-emission techniques, a lower nutrient content for fodder and increased manure processing. By 2007, the nitrogen surplus had fallen by 68 per cent and the phosphorus surplus by 95 per cent (compared to 1990). However, despite these successes, nutrient balance remains a point of attention for Flemish agriculture.

The shrinking livestock numbers also contributed to a decrease in greenhouse gas emissions (–13 per cent) and fine dust emissions (–10 per cent) between 2000 and 2007. The sensitivity of land to erosion, however, rose slightly between 2000 and 2007 due to the choice of more erosion-sensitive crops such as maize and potatoes.

“Das europäische Agrarmodell bildet nach wie vor den Ausgangspunkt meiner Zukunftsvision für die GAP.”

The need for a strong European agricultural policy

  1. Top of page
  2. Summary
  3. Flanders, a densely populated region with an important agricultural sector
  4. Despite ongoing difficulties, the sector maintains its output, albeit with fewer businesses
  5. Ongoing restructuring, in order to remain competitive
  6. Average farm incomes remain low
  7. Environmental pressures from agriculture have decreased
  8. The need for a strong European agricultural policy
  9. The European agricultural model remains the starting point
  10. Reforming direct support
  11. Modernising market and price policies
  12. Investing in a competitive and sustainable agriculture
  13. A future CAP serving a wide range of needs and challenges
  14. Further Reading

The CAP has contributed substantially to the advances that have been made in Flemish agriculture over the past 50 years. But new local and global challenges make clear that these achievements should not be taken for granted. The rise of global food demand, climate change, the reduction of biodiversity and competition for increasingly scarce resources clearly show that the good agricultural and environmental condition of land, water and other resources will come under even more pressure. Increased competition in the global market and the prospect of further growth of world trade in agricultural products confirms that the competitiveness and economic self-reliance of our agri-business sector needs to be further improved. In addition, the specific nature of agriculture as an economic activity and its strategic role as a food producer indicates to us that a ‘modernised’ safety net in times of crisis remains necessary. The highly volatile pattern of prices for agricultural products in the past three years emphasises this need.

I am convinced, therefore, that after 2013 the EU will still require a strong agricultural policy to serve both European citizens and the agricultural sector. Furthermore, it is clear to me that the European Union has to continue to play a central role in this policy in order to:

  • • 
    guarantee a unified European market that functions properly;
  • • 
    ensure that the EU’s Member States have a level playing field;
  • • 
    offer a common cross-border approach to international challenges;
  • • 
    encourage solidarity among the Member States and within the sector; and
  • • 
    promote the European agricultural model internationally.

Nevertheless the CAP will need to be adjusted to bring it more in line with new challenges. Naturally budgetary considerations have to play a role in these adjustments. However, any decision regarding the future should primarily be based on the ‘added value’ of European agricultural policy and on the effectiveness and efficiency of the underlying tools, programmes and instruments.

The European agricultural model remains the starting point

  1. Top of page
  2. Summary
  3. Flanders, a densely populated region with an important agricultural sector
  4. Despite ongoing difficulties, the sector maintains its output, albeit with fewer businesses
  5. Ongoing restructuring, in order to remain competitive
  6. Average farm incomes remain low
  7. Environmental pressures from agriculture have decreased
  8. The need for a strong European agricultural policy
  9. The European agricultural model remains the starting point
  10. Reforming direct support
  11. Modernising market and price policies
  12. Investing in a competitive and sustainable agriculture
  13. A future CAP serving a wide range of needs and challenges
  14. Further Reading

The European agricultural model, which focuses on a multifunctional, competitive and sustainable agriculture throughout the territory, remains the starting point of my vision for the future of the CAP. However, in order to realise this European vision of what agriculture should look like, the CAP will have to evolve. More attention should be given to competitiveness and entrepreneurship. The focus on improving the functioning of the supply chain should continue as a way of achieving a fairer distribution of costs and benefits between farmers and other economic actors in the chain. Steps should be taken to guarantee that EU agriculture contributes to food security in a responsible manner, to the benefit of EU citizens and the world. Furthermore, the CAP should do more to facilitate the transition to a more sustainable agriculture and to put into practice the concept of green growth. And in those areas where the agricultural sector can make a more active and positive societal contribution beyond food production (e.g. in mitigating climate change), the CAP should find ways for farmers to do that.

Let me explain in more detail the future direction I see for some key areas of the CAP.

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Reforming direct support

  1. Top of page
  2. Summary
  3. Flanders, a densely populated region with an important agricultural sector
  4. Despite ongoing difficulties, the sector maintains its output, albeit with fewer businesses
  5. Ongoing restructuring, in order to remain competitive
  6. Average farm incomes remain low
  7. Environmental pressures from agriculture have decreased
  8. The need for a strong European agricultural policy
  9. The European agricultural model remains the starting point
  10. Reforming direct support
  11. Modernising market and price policies
  12. Investing in a competitive and sustainable agriculture
  13. A future CAP serving a wide range of needs and challenges
  14. Further Reading

Direct income support is justified beyond 2013. After all, the market does not provide adequate compensation to farmers for costs incurred as a consequence of the high European basic standards, nor does it compensate them for actions to maintain European agricultural potential in a sustainable manner. Furthermore, direct support can contribute to stabilisation of agricultural income in an era which is likely to be marked by high price volatility.

In the future, direct support payments should be more targeted to businesses with meaningful agricultural activities, and their distribution should be fair. Any future system used should allow an efficient transfer of funds to farmers, and its administrative burden should be limited. Furthermore, payments should stay linked to conditions regarding good business practices, ecological sustainability, food safety and animal welfare.

“The European agricultural model remains the starting point of my vision for the future of the CAP.”.

In addition, I am persuaded that, post-2013, member states should have the right to determine the amount of direct support for a farm on more than just the amount of land under cultivation. As stated above, the purpose of direct support is to stabilise income and to compensate EU farmers for costs resulting from high EU standards. Farms without much land are equally entitled to this.

Modernising market and price policies

  1. Top of page
  2. Summary
  3. Flanders, a densely populated region with an important agricultural sector
  4. Despite ongoing difficulties, the sector maintains its output, albeit with fewer businesses
  5. Ongoing restructuring, in order to remain competitive
  6. Average farm incomes remain low
  7. Environmental pressures from agriculture have decreased
  8. The need for a strong European agricultural policy
  9. The European agricultural model remains the starting point
  10. Reforming direct support
  11. Modernising market and price policies
  12. Investing in a competitive and sustainable agriculture
  13. A future CAP serving a wide range of needs and challenges
  14. Further Reading

In the future the private sector has to play a bigger role in managing the offer, price and risk. Cooperation within the private sector has to be promoted. Growers’ organisations and unions of growers’ organisations have already proved their worth in the fruit and vegetables sector. In addition, it is also desirable to encourage and enable the establishment of growers’ organisations for other agricultural sectors. Producer organisations and inter-branch organisations should be strengthened, so that they can help to establish the conditions for an appropriate balance between the various operators and in the distribution of added value in the agri-food chain. If necessary, exemptions to competition policy should be considered. In parallel, the functioning of the food supply chain and the transparency in price formation has to be improved.

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Existing market instruments should be deployed in a more flexible way in the future. They should not be further reduced; instead they should be modernised. In addition to that, new instruments are required as a buffer against volatility (strategic stocks, transfers between food, fodder and energy markets).

Investing in a competitive and sustainable agriculture

  1. Top of page
  2. Summary
  3. Flanders, a densely populated region with an important agricultural sector
  4. Despite ongoing difficulties, the sector maintains its output, albeit with fewer businesses
  5. Ongoing restructuring, in order to remain competitive
  6. Average farm incomes remain low
  7. Environmental pressures from agriculture have decreased
  8. The need for a strong European agricultural policy
  9. The European agricultural model remains the starting point
  10. Reforming direct support
  11. Modernising market and price policies
  12. Investing in a competitive and sustainable agriculture
  13. A future CAP serving a wide range of needs and challenges
  14. Further Reading

The future CAP has to strengthen the efforts of our farmers towards a more competitive and sustainable agriculture. Within Pillar II, axis 1 (competitiveness of agriculture and forestry) needs to be expanded in budgetary terms, and also in scope, to include non-productive investments in more sustainable production systems. Within axis 2 (environment and countryside) the current system of agro-environment measures could be further developed, to improve the delivery of environment-related public services. Overall, more attention should be paid to advice, training, quality, innovation and cooperation. In addition, the possibility of offering targeted support at a low transaction cost should remain – for example specific support under article 68 or support under the less favoured areas scheme – so that member states can retain the option to support more specific objectives, areas, sectors or target groups (e.g. young farmers). In doing that, more attention should be given to the opportunities and difficulties related to agriculture in urbanised rural areas. Finally, there needs to be more focus on agricultural businesses in difficulty (support for guidance and retraining initiatives).

A future CAP serving a wide range of needs and challenges

  1. Top of page
  2. Summary
  3. Flanders, a densely populated region with an important agricultural sector
  4. Despite ongoing difficulties, the sector maintains its output, albeit with fewer businesses
  5. Ongoing restructuring, in order to remain competitive
  6. Average farm incomes remain low
  7. Environmental pressures from agriculture have decreased
  8. The need for a strong European agricultural policy
  9. The European agricultural model remains the starting point
  10. Reforming direct support
  11. Modernising market and price policies
  12. Investing in a competitive and sustainable agriculture
  13. A future CAP serving a wide range of needs and challenges
  14. Further Reading

Recently, in his speech to the European Parliament’s Agriculture Committee, Commissioner Cioloş emphasised that, within the EU, it is not possible to talk about one kind of agriculture. Across its many regions, EU agriculture today displays a wide diversity in systems, products and consumer preferences. As Minister for Agriculture and Fisheries for the Flemish Region, I agree with the analysis that this diversity is indeed an asset to EU agriculture and EU citizens, which should be secured. Future change to the CAP should therefore not aim to provide a one-size-fits-all approach but rather a range of policy options and instruments that can be deployed by member states and regions. The current EU framework should be kept to maximise synergies and to guard the objective of a common market for agricultural products. However, within that framework, it is important that regions receive more flexibility for the deployment of CAP policies and funds to accommodate local needs and problems and to be able to react to rapidly changing circumstances.