CAP reform

Young Farmers Declaration of the future CAP 20/09/2010

Key points:

• Stable and predictable budget for CAP
• Market tools for predictability, including empowerment of farmers and transparency of the food
  chain
• Direct payments to active farmers
• Fair and transparent direct payments
• Young Farmers Package
• Reward for provision of environmental goods and services

Introduction
Today, agriculture across Europe represents an extraordinary opportunity for young people to achieve their business goals in a sustainable way. Entering into agri-business is a real opportunity for young people to work in a sector of ideas, innovation, research and passion. Young agri-entrepeneurs are dynamic and will be better equipped than the older generation for fully integrating other sectors of the economy into their farm such as the environment, agro-tourism, trade and collective services. In return, the sector can evolve in synergy with contemporary society and become significantly important to lifequality and wellbeing. To make agri-businesses reach their potential, it is paramount to invest in an agricultural policy that prioritises the renewal of generations and help counter the declining numbers entering agriculture.

Agri-entrepreneurs have to face more and more price volatility. In this context, young farmers could be vulnerable especially because they are more specialized at the beginning of their activity. That’s why Young farmers should be encouraged to improve or diversify their production or activity for helping them to manage economical risks. For this purpose, CEJA proposes that the future CAP should give the possibility to support farmers developing innovative projects and introducing diversity on their farms in a sustainable way.

In that context, CEJA calls for:

1. Specific public policies to target the young generation
Today, only 7% of farmers are under the age of 35 on average in the EU 27. This number is even more alarming in some Member States, like in the United Kingdom, Netherlands, Italy, Portugal, Cyprus and Romania. A third of farmers are over 65 years old.1 Specific public policies are clearly needed to target the young generation of farmers CEJA requests the European Commission to include in its Communication of November the mandatory implementation of a ‘Young Farmers Package’, that includes installation aid, taking the form of either a grant for investment, a subsidized loan and/or interest rate, state guaranteed covered bonds, bank guarantees, insurances and tax reductions and training programs. As key actors of tomorrow, the young farmers will play an important role in the future of agriculture. For CEJA, the CAP must accompany the new generation of farmers. CEJA proposes to implement specific measures for reinforcing training and advice in new and innovative agricultural practises and to develop communication tools to attract the young people to enter the agricultural sector.

2. A stable and predictable budget for the CAP
CEJA expresses itself strongly against any kind of attempt to re-nationalise the CAP or co-financing which would not be decided at EU level. The CAP budget should remain strong to meet Europe’s priorities of delivering a safe, high quality and secure food supply whilst encouraging sustainable agricultural production, and the maintenance of as many farms as possible throughout the entire EU territory. It is in this way that we can achieve the internal food security in the EU and meet environmental challenges. The European model based on a multifunctional agriculture, makes the EU agricultural sector a strategic activity for Europe and is part of the strategy of "Europe 2020".

3. A Fairer Payment for Farmers
Agri-entrepreneurs want to be primarily rewarded by the market for their provision of agricultural commodities and goods. However, let’s recall that on average, farmers’ income is 20% less than the income of the average population. Furthermore farm employment has dropped by 25% in the last decade, while at the same time, food prices have gone up for end-consumers.  CEJA has expressed many times against the historical model of direct payment. Any new model has to recognise the high level and long term investment made by young farmers. CEJA believes that the direct payment system must be transparent and fair for all farmers in each Member State. CEJA believes that active farmers should be the specific targets of direct payment.

Active farmers are understood as:

farmers taking the financial responsibility for managing the business and production and who
sell products individually or through cooperatives and
farmers recognised as such by the public administration and
farmers delivering public goods from their agriculture activity.

4. A CAP that incorporates a range of market stabilising tools that protects from extreme
market volatility
The agricultural sector has become more in line with a market orientated model following the series of CAP reforms. CEJA notes this approach. A safety net and market stabilising tools should remain in case of extreme market volatility crisis. Combinations of public and private tools should be used in case of market failure, to provide more
predictability and stability. A non-exhaustive list of a combination of tools could include for example: an insurance system; public intervention; public & private storage.
The safety net should be standardised in an EU wide plan to ensure a level playing field. In the event of extraordinary natural disasters, a European fund should be available to help farmers rebuild their enterprises and to provide some form of compensation in case of destruction.
Empowerment of farmers and transparency in the food chain Initiatives that support agri-entrepreneurs to be ‘price makers’ in the food chain, as supposed to ‘price takers’ should be promoted. CEJA requests the EU institutions to allow farmers to organise themselves into producers’ organisations and inter-profession to make agreements within the food chain on price. Code of conducts should be further explored in the inter-professional agreement. CEJA also proposes to create an EU wide market & price observatory.

To encourage transparency in the food chain, origin labelling is fundamental. To enable farmers to engage into direct selling, the new CAP has to support such initiatives. Member States should fully use programmes available under rural development programmes. More control on production systems of products coming from third countries into the EU, regarding food safety, labour conditions and animal welfare is needed.

5. Reward for the provision of public goods and services
Provision of public environmental goods and services by farmers is not rewarded by the market. In this context, CEJA supports the idea that some parts of direct payments could be linked to the provision of these public goods. A clear and transparent definition of what can be considered as “public goods” is needed. CEJA
believes that the main public goods that farmers deliver to society is related to food production, food safety, healthy and quality food at remunerative prices for producers and reasonable ones for consumers in enough quantity to meet the European and Global food demand. Agriculture plays an important role in protecting our environment. Agri-environmental services like the preservation of natural resources, respecting and enhancing bio-diversity, soil protection, water resources management, landscape management, playing an active role for mitigating and adapting to climate change needs to be remunerated. The disadvantages of farming in less favoured areas needs to be compensated in order to keep public services like promoting the livelihood of rural areas, promoting the territories of the EU and the maintenance of employment and capacity to create new jobs.

6. Accompanying measures instead of coercitive tools

Cross-compliance is a tool that showed its limits and is perceived as a coercive tool by the agricultural community. Accompanying measures (financial & technical) should be put in place to help support farmers who wish to adapt their production techniques to better protect the environment and to develop innovative projects with local actors. CEJA demands a stronger independence from energy and protein imports by developing bio-energy production and through an EU protein plan.

Conclusion
Agriculture has a strategic role to play today in the times of ever-growing challenges of feeding an increasing global population, mitigating climate change and preserving natural resources. CEJA calls for a predictable, viable, legitimate and transparent future framework in agricultural policy to attract the young generation in this sector.