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Summary

  1. Top of page
  2. Summary
  3. Hungarian Presidency
  4. The future of the CAP after 2013
  5. The debate and the resulting decisions must address several issues
  6. The future principles of the CAP
  7. Further Reading

Standing at the Crossroads – the Future of a Strong Common Agricultural Policy is at Stake

The issues and targets in the European Union’s agenda are largely in line with Hungarian objectives; job creation for example is one of the main targets of the Europe 2020 strategy and also of the Hungarian Government. Hungary’s development and competitiveness are linked to the internal development and global competitiveness of the European Union; and so our primary objective is to strengthen the integration process and to obtain a strong Common Agricultural Policy. The CAP has reached the highest level of integration among EU policies and its original objectives have been reinforced by the Lisbon Treaty. Europe needs a strong and common agricultural policy beyond 2013; the main task of agriculture will be to ensure the security of food supplies. The future success of the CAP requires appropriate financial support to secure future targets. Rural development has already become an integral part of the CAP structure; but rural areas will not be viable without an evolving agriculture. Without the provision of a proper level of income subsidies many farms would be forced to stop production. CAP adjustments should promote the catching up of new Member States and eliminate the current system of direct subsidies that disadvantage the new members.

Les questions et objectifs à l’ordre du jour de l’Union européenne sont largement en phase avec ceux de la Hongrie; la création d’emploi, par exemple, est l’un des principaux objectifs de la stratégie Europe 2020 ainsi que du gouvernement hongrois. Le développement et la compétitivité de la Hongrie sont liés au développement intérieur et à la compétitivité mondiale de l’Union européenne. Ainsi, notre principal objectif est de renforcer le processus d’intégration et obtenir une politique agricole commune (PAC) forte. Parmi les politiques de l’Union européenne, la PAC a atteint le plus haut degré d’intégration et ses objectifs initiaux ont été renforcés par le traité de Lisbonne. L’Europe a besoin d’une politique agricole forte et commune après 2013; la principale tâche de l’agriculture sera d’assurer la sécurité des approvisionnements alimentaires. Le succès à venir de la PAC est tributaire d’un soutien financier permettant d’atteindre les objectifs. Le développement rural fait déjà partie intégrante de la PAC, mais les zones rurales ne seront pas viables en l’absence d’une agriculture qui évolue. Sans soutien du revenu adéquat, de nombreuses exploitations seraient contraintes de cesser leur activité de production. Les ajustements apportés à la PAC devraient favoriser la mise à niveau des nouveaux pays membres et éliminer le système actuel de paiements directs qui les désavantage.

Die Themen und Zielsetzungen in der Agenda der Europäischen Union entsprechen weitestgehend den ungarischen Zielen; die Schaffung von Arbeitsplätzen beispielsweise gehört zu den Hauptzielen der Strategie “Europa 2020” und ebenfalls der ungarischen Regierung. Die Entwicklung und Wettbewerbsfähigkeit Ungarns hängen mit der internen Entwicklung und globalen Wettbewerbsfähigkeit der Europäischen Union zusammen, daher liegt unser Hauptziel darin, den Integrationsprozess zu stärken und eine starke Gemeinsame Agrarpolitik zu erzielen. Von allen EU-Politiken hat die GAP das höchste Maß an Integration erreicht, und ihre ursprünglichen Ziele wurden durch den Vertrag von Lissabon bestätigt. Auch nach 2013 braucht Europa eine starke und gemeinsame Agrarpolitik; die Hauptaufgabe der Landwirtschaft wird in der Ernährungssicherung liegen. Der Erfolg der GAP hängt zukünftig von einer angemessenen finanziellen Unterstützung ab, um die Zielsetzungen in Zukunft erfüllen zu können. Die Entwicklung des ländlichen Raums ist bereits zu einem festen Bestandteil in der GAP-Struktur geworden; ohne Fortschritte in der Landwirtschaft sind ländliche Räume jedoch nicht entwicklungsfähig. Wenn keine angemessene Einkommensstützung zur Verfügung gestellt werden würde, wären viele landwirtschaftliche Betriebe zur Aufgabe gezwungen. Die Anpassungen der GAP sollten ein Aufholen der neuen Mitgliedsstaaten fördern und die Ausgestaltung des bestehenden Direktzahlungssystems ändern sowie die Benachteiligung der neuen Mitglieder beenden.

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Located in the heart of Europe, Hungary is a bridge between Western and Eastern European culture and economy. This is our historic mission.

Hungary’s varied landscape ranges from the Lower Alps through Badacsony at Lake Balaton to the infinite great plain and from the Mediterranean vineyards of Southern Transdanubia to Tokaj mountain, famous for its Aszu wines.

There are only a few countries in Europe – or even in the world – benefitting from such favourable geographical endowments as those enjoyed by Hungary, situated in the middle of the Carpathian basin. The fine climate is coupled with fertile soil and a huge water base, which together with generations of hard work, has created a modern day agriculture in Hungary that can boast a thousand-year-old history with its origins deep in European culture. Hungary also has a rich tradition of plant cultivation and animal husbandry, and delicious Hungarian products are in great demand on European markets. Agriculture has always played an important role in the Hungarian national economy – as a net food exporting country Hungary has been contributing to European food security for centuries.

Hungarian Presidency

  1. Top of page
  2. Summary
  3. Hungarian Presidency
  4. The future of the CAP after 2013
  5. The debate and the resulting decisions must address several issues
  6. The future principles of the CAP
  7. Further Reading

From 1st January 2011 Hungary will hold the Presidency of the European Union. This is a great honour as well as a big challenge. Our task will be to facilitate European integration and decision-making processes concerning several major issues in the field of agriculture and environmental protection.

As Hungary’s development and competitiveness are linked to the internal development and global competitiveness of the European Union, our primary objective is to strengthen the integration process and to foster a strong Common Agricultural Policy.

It is important that Europe should be able to react effectively to new challenges. Hungary is convinced, however, that the achievements of the past decades should also be maintained; the Common Agricultural Policy is one such area.

Hungary’s first EU Presidency aims to serve both Europe and Hungary at the same time. As far as our national interests are concerned, we enjoy a special position; the European Union’s agenda contains issues that are in line with our own objectives. A good example is job creation, which is one of the main targets of the newly formed Europe 2020 Strategy and at the same time one of the main priorities of the new Hungarian Government. Overcoming the global economic crisis will be difficult, yet it offers a unique challenge which the Member States should rise to. The proposals and measures are listed in the EU’s political agenda. We wish to contribute to the implementation of this agenda. Our country can be effective only as part of a strong Europe and the Hungarian Presidency of the European Council will serve this objective. Hungary wishes to provide a reliable presidency through a synthesis of all interests; by promoting achievement of the joint objectives assigned by the Member States.

Spain, Belgium and Hungary are the first presidency trio to work entirely under the provisions of the Lisbon Treaty. The European Union’s agenda is dominated by such trans-presidency issues in which no major progress can be made without the cooperation of these three Member States.

Since December 2009, decisions concerning individual agrarian issues have been made exclusively by agreement of the European Council and the European Parliament; which means that all decisions must reflect the expectations of the European Parliament. This puts the decision-making process on a new level of prior discussions and responsibilities.

The future of the CAP after 2013

  1. Top of page
  2. Summary
  3. Hungarian Presidency
  4. The future of the CAP after 2013
  5. The debate and the resulting decisions must address several issues
  6. The future principles of the CAP
  7. Further Reading

Among agrarian issues to be discussed during the Hungarian Presidency is the Communication of the European Commission on the future of the CAP. This contains a clear message regarding the future of the CAP and summarises the impacts of the current regulations and the political guidelines. The interim budget review including consideration of CAP policies and the United Kingdom’s rebate will be underway, and the debate on the 2014–20 budget will also commence.

The Hungarian Presidency wishes to reach unanimous conclusions about the Communication of the European Commission at the Council meeting in March or April 2011. In view of the dissenting positions and attitudes of Member States on certain issues, it will be a real challenge to reach a consensus.

Agriculture represents a basic value and a strategic branch for the political and economic development of Europe. The CAP is therefore a major and fundamental policy underpinning the progress and integration of the European Union. Among all the specialised policies of the EU, the CAP has so far reached the highest level of integration.

The original goals of the Common Agricultural Policy have been reinforced by the charter members of the Lisbon Treaty:

  • to ensure the rational development of agricultural production;
  • to ensure a fair standard of living for the agricultural community;
  • to stabilise markets, to assure the availability of supplies;
  • to ensure that supplies reach consumers at reasonable prices.

Food security will continue to remain the greatest challenge for agriculture both in the EU and globally. By 2050 some 9,000 million people on this planet will need to be fed, creating a need to increase global output by about 70 per cent. In this regard Europe will play a major role in establishing a global food balance.

In the face of climate change, a potential global food crisis, world market price uncertainties and public health problems, only an ambitious, transcontinental and well-financed Common Agricultural Policy will be able to protect the independence of Europe.

“Europa muss seine Werte erhalten ... der Erhalt der landwirtschaftlichen Tätigkeit ist ein grundlegender Bestandteil bei der Bewahrung der europäischen Identität.”

There is fervent debate about the future of the CAP in all contracting Member States, who are looking for solutions that will ensure effective development and thus provide stability for the agrarian economies of Europe and individual Member States.

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The debate and the resulting decisions must address several issues

  1. Top of page
  2. Summary
  3. Hungarian Presidency
  4. The future of the CAP after 2013
  5. The debate and the resulting decisions must address several issues
  6. The future principles of the CAP
  7. Further Reading

The overall level of support to farms has been gradually decreasing since 2000. Per capita real income in agriculture has declined by over 10 per cent in the past 10 years and today it stands at the level of 1995.

The financial crisis has made us realise that the market alone is not able to solve each issue successfully. Due to the special nature of agricultural production, there is a need for the effective implementation of market management measures as well as for market control and regulations. Unregulated market forces may impose unacceptable costs on farmers. Our overall objectives are:

  • to protect Europe’s farming interests as well as to help agriculture play its role in the European economy and to be still competitive on the world market;
  • to facilitate the competitiveness of the countryside – not only in business terms but also as a way of life;
  • to achieve a consensus between sustainable agriculture and environmental challenges; and
  • to promote the CAP’s contribution to the fight against climate change, through reductions in CO2 emissions and through the use of renewable energy, which will also contribute to the EU’s energy security.

The future principles of the CAP

  1. Top of page
  2. Summary
  3. Hungarian Presidency
  4. The future of the CAP after 2013
  5. The debate and the resulting decisions must address several issues
  6. The future principles of the CAP
  7. Further Reading

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The main task of agriculture is to ensure the balance of food supplies.

The maintenance of farming activity is a basic component in the preservation of European identity. The CAP should lay proper emphasis on food supply and security, health issues, environmental protection, mitigation of climate change impacts and more balanced and efficient water management. It should promote the maintenance of biodiversity, conserve the versatility of agricultural enterprises and local food production and increase the use of renewable energy sources. All these aspects will contribute to the competitiveness and maintenance of the European model of agriculture and associated food industries.

The CAP should ensure a fair income and standard of living for the farming community. Further CAP adjustments should not lead to the additional dismantling of market regulation tools and the reduction of farming subsidies. Some 30–50 per cent of farming income derives from subsidies. Without the provision of a proper level of income subsidies many farms would be forced to stop production. The amount of abandoned and uncultivated land would increase substantially and the reductions in incomes of those living in the countryside would accelerate the deterioration of these areas and the depopulation of villages.

In view of specific regional conditions, the CAP should provide the Member States with sufficient room for manoeuvre. CAP adjustments should help the catching up of new Member States and eliminate the current system of direct subsidies that are disadvantageous for the new Member States. The current system of distribution of payments and the levels of subsidies between Member States and farms have been the result of former schemes and levels. This method of distribution is rightly considered unfair by certain farmers in the EU and, furthermore, its maintenance is not in accordance with the future objectives of the CAP.

“L’Europe est responsable de la préservation de ses valeurs …la préservation de l’identité européenne passe par le maintien d’une activité agricole.”

In order to meet the challenges represented by multinational trading practices, it is reasonable to support and improve the establishment and reinforcement of lobbyist organisations and associations of farmers within the individual Member States and jointly among them. The relevant Communication of the European Commission of October 2009 revealed serious problems: misuse of buyer power; unfair contracting practices (including payment delays); unilateral contract amendments; advance payments requested in return for access to price negotiations; limited market access; lack of data regarding pricing policies and price margin distribution in the overall food chain. These are closely correlated with the increasing concentration of production in wholesale and retail activities in the sector. Global challenges need global responses.

Let us take advantage of the opportunities offered by new technologies. Research, innovation, education and consulting should be given central roles. These factors would provide the basis for an agriculture that is able to face and manage environmental challenges, produce foodstuffs in sufficient quality and quantity and meet the requirements of sustainability at the same time.

Rural development has already become an integral part of the CAP structure; but it is not possible to have viable rural areas without progressive agriculture. The CAP alone, however, is unable to create a viable countryside. For such a purpose CAP resources should be coordinated with those of the Cohesion Funds to ensure that rural areas possess proper infrastructure capable of sustaining rural livelihoods. Priorities should include the creation of jobs and the reinforcement of small and medium-sized farms; these are key factors in rural areas. The potential for self-employment should be promoted along with the development of village tourism, the improvement of local markets and the provision of easier market access for locally produced speciality foods. Rural areas should be made attractive for younger generations by offering them new and alternative business opportunities.

The future success of the Common Agricultural Policy requires adjustments in the financial supports to meet future objectives. First the key issues and tasks should be determined for the post-2013 CAP. After that we can select the tools, provide the funds and make the right political and technical decisions required for achievement of the objectives.

The premise of a strong common policy is that the CAP and its underlying system should fully preserve its community nature, and respect the principles of solidarity and equal treatment among Member States, particularly in financial terms.

“Europe is responsible for the preservation of its values ... maintaining farming activity is a basic component in the preservation of European identity.”

We are well aware of the fact that certain changes will be unavoidable. This was already evident in the CAP reform of 2003 and also in the EU budget approved for the 2007–13 period in 2005. The CAP should preserve the valid and successful achievements of the past but at the same time should be tailored to the new requirements and challenges. The changes should ensure a balance between rural development and the economic, environmental and social functions of agriculture.

An array of political tools will be required to ensure a fair standard of living for farmers. This can be achieved efficiently by the two-pillar system of the CAP if we retain the current level of direct subsidies and reinforce the rural development policy under Pillar II. Direct subsidies alone, however, will not be enough to handle extreme fluctuations in market prices. A basic condition for the establishment of stable farming incomes will be to improve the competitiveness and market access of farmers. In this regard the agri-food product chains should integrate all activities such as research and development, breeding, production, processing and trade.

The required changes should help create a sustainable agriculture capable of facilitating rural life. Thus Hungary is against excessive liberalisation and thinks that these issues should be reconsidered. The CAP should not be taken under national competence and thus Hungary rejects any additional co-financing ideas that may violate fair competition within the standardised European market.

In addition to the above principles and issues concerning the future of the CAP, the settlement of certain acute matters will also have priority during the Hungarian Presidency. The most significant problems include the handling of the dairy market situation and the simplification of the CAP.

Dairy market.  Since the major crisis in the dairy market in 2009 the presidency trio has been actively involved in promoting solutions to manage the fragile situation. For the medium/long-term regulation of the dairy sector, the High Level Work Group for the Dairy Sector has made proposals for: the settlement of contractual relations; the improvement of producers’ business positions; the selection of the right market tools and the integration of research and development. At the same time, the Commission will prepare, in line with its obligation specified in the CAP survey, its milk quota report. These two works will form the basis of the legislative proposals to be developed by the Commission aimed at creating the new conditions for the long-term and reliable handling of the dairy market situation, and also promoting the stabilisation of farming income.

Simplification of the CAP.  It will be a central issue for the Hungarian Presidency to simplify the CAP and to reduce the associated bureaucracy. We strongly support the efforts to establish less troublesome and more easily applicable and understandable pieces of legislation for farmers. Simplification, however, cannot lead to weakened efficiency of the CAP and related interventions.

Hungary’s traditions, its ‘hungaricums’ (unique Hungarian products and animals), the sources of genetic variation in its indigenous plant and animal species, are all integral parts of European versatility; many can have protected designations of origin and be registered in the quality policy system of the EU. Their proper care and preservation is in the interest of both Hungary and the EU. Hungary has unique assets such as the modern wine-making units that renew the past values of the Tokaj wine region; which produces the original natural sweet wine on the planet and is part of the world heritage. We are proud of our values rooted in our traditions, and it is one of our objectives to protect our reputation and to spread our traditions to help make Europe richer and more colourful.

It is in this spirit that the Hungarian Presidency prepares to perform its tasks and to bring Hungary closer to its neighbours. The Presidency is a special opportunity to represent the values, traditions and spirit of Hungary to others and to reinforce our belief that Europe is responsible for the preservation of this diversity and for passing it on to future generations. This belief will be the major principle guiding decision making during the Hungarian Presidency.

Further Reading

  1. Top of page
  2. Summary
  3. Hungarian Presidency
  4. The future of the CAP after 2013
  5. The debate and the resulting decisions must address several issues
  6. The future principles of the CAP
  7. Further Reading
  • The Programme of National Cooperation – The Programme of the Government, Office of the National Assembly, Budapest, Hungary. Available online at: http://www.parlament.hu/irom39/00047/00047_e.pdf.
  • Communication from the European Commission: A Better Functioning Food Supply Chain in Europe. (COM (2009)0591), Brussels, EC.