Brussels, Belgium
May 4, 2007
Mariann Fischer Boel
Member of the European Commission responsible for agriculture
and rural development
Prospects for the EU grain and oilseeds sectors
Conference by COCERAL European Grain and Oilseed Convention
Brussels, 4th May 2007
Ladies and gentlemen,
Many thanks for your kind invitation to join you today.
When I accept an invitation to speak at a conference, I find it
very reassuring if I know that there's plenty of relevant
subject-matter and that I won't just be "talking out the time".
I think you will agree that, in this sense, I don't need to
worry today. I could easily fill a twenty-minute speech simply
by reading recent media reports. I would have found plenty of
material about biofuel controversy in the US, riots in Mexico
over maize shortages, anxieties about genetically modified crops
...The list is long.
Certainly, there's a lot going on that's relevant to the grain
and oilseeds sectors; and certainly, this is a busy time for me.
I'm busy planning for the medium and long term of the CAP; and
inevitably, I'm also busy responding to unforeseen problems and
challenges as they arise.
First, then, a few words about general planning.
I'm sure you're aware that the CAP is due for review in an
exercise which I refer to under the title "one vision, two
steps".
Step one will be the so-called "CAP Health Check", which
relates to the CAP between now and 2013. It will assess whether
the reformed CAP is working as it should, and will make
adjustments where necessary – to make it more effective, and
also simpler where possible.
Step two will be a look ahead to the CAP of after 2013,
within a general review of the overall European budget.
On a number of occasions, I have already set out many of the
ideas that we will probably consider in this two-step exercise,
so I shan't repeat them all today. Let me instead focus on one
or two points of particular relevance to the cereals and
oilseeds sectors.
Essentially, I believe that the key principles of the reforms of
2003 and later years are valid, and that we will embrace those
principles more fully in the years ahead, not retreat from them.
The system of decoupled support for farmers is a good
system. It encourages responsiveness to the market and it is
generally more acceptable to the public than payments linked to
production. Therefore, I think that exceptions to the principle
of full decoupling – for cereals, fore example – have a limited
lifespan.
Our emphasis on decoupled payments and market-based production
decisions has implications for set-aside. I think this
policy has had its day. It made sense in the era when
production-linked payments were the norm; that era has now gone,
and with it has gone the logical justification for set-aside. If
we abolished it, we could lift a heavy administrative burden
from the farm sector.
We also need to take a look at cereals intervention.
After 2013, the continued existence of market tools like this
one is open to question – especially if we abolish export
refunds, as we have conditionally agreed to do in the WTO Doha
Round. And before 2013 – so, within the Health Check – we should
decide whether we need to make adjustments to the intervention
system.
I should emphasise that we would be looking at cereals
intervention as a whole: we need to take a global view.
Nevertheless, as you know, I have recently argued strongly in
favour of taking action early on with regard to one particular
cereal: maize.
I have proposed a special approach towards maize because maize
has given us special problems. 31 per cent of Hungarian maize
production went into intervention in 2004/2005. In 2005/06, the
figure was 36 per cent. These are enormous proportions.
Recently, a firmer world market has eased the situation, but
there is no guarantee whatsoever that this will continue.
The Commission sees a structural problem in Hungary and other
land-locked Member States of the European Union. We think
intervention is being viewed as a viable and reliable market
outlet. This is contrary to the intended purpose of intervention
– which is to act as a safety net in exceptional circumstances.
I have argued that maize intervention can no longer fulfil that
intended purpose, and that the time has therefore come to
abolish it. However, others have taken a different view.
I am open to all reasonable suggestions with regard to this
issue. The German presidency of the European Union has proposed
a compromise, and I hope that this will help us find a
satisfactory solution very soon.
At this point, I would simply emphasise that we cannot bury our
heads in the sand and wait for this problem to go away. It will
not go away: we must act, sooner rather than later.
*****
As I said a moment ago, amid all our planning, we also have to
respond to developing problems. One such problem at the moment
is the growing number genetically modified organisms
(GMOs) which are approved by some of our trade partners but not
by us.
I would like to assure you that this problem has appeared
clearly on my radar. I know that maize feed product shipments
have declined over the last few months because of the difficulty
of keeping out GMOs which are authorised elsewhere but not in
the European Union. And I know that the issue of contamination
has been mentioned with regard to a recent maize gluten feed
shipment.
Apart from the dangers of unwanted contamination itself, of
course we must consider what would happen if we had to block
imports altogether from given origins, to avoid such
contamination.
Thankfully, the potential problem in the case of maize feed
products is not particularly large, since our imports of these
products are low. On the other hand, we import much larger
volumes of soyabeans and soyabean meal, and it would be
difficult to replace these with other protein-rich feed.
We hope to avoid having to block soya imports from our main
suppliers – the US, Argentina and Brazil. And whereas this could
be difficult in the case of the US, Argentina and Brazil ought
to work with us actively on this issue, given that we take a
high proportion of their soyabean exports (more than 40 per cent
of Argentina's, and more than 50 per cent of Brazil's).
Nevertheless, we can't rely on hope alone.
The best solution is not yet clear. Many of our trade partners
have a different perspective on GMO regulation from ours. What I
can tell you is that we have had a serious discussion within the
Commission, and we are looking hard for a way through.
One part of the problem seems to be that, when the European
Union considers authorising a new GMO, the approval process
takes a considerable time. We are examining why this is, and
whether we can speed it up without compromising on the risk
assessment.
At the same time, the Commission is continuing its work on the
co-existence of GM and non-GM crops.
What do I have to report? Mainly that Member States are making
considerable progress. 15 Member States have already notified
their draft national co-existence rules to the Commission, and
we expect more notifications soon.
When we look at the different measures proposed, it seems clear
that we did the right thing in leaving key decisions on
co-existence rules up to Member States initially. There are very
different conditions in the various agricultural landscapes, and
these require very individual measures. So the variety in the
measures proposed comes as no surprise.
Nevertheless, there is also a common rationale to be applied
everywhere. So we have to work thoroughly on our common
understanding of the science involved before we can develop
guidelines for crop-specific co-existence measures at a
technical level, as the Council has asked us to do.
We are currently setting up a European Co-existence Bureau,
which will carry out this technical work in partnership with
national experts and interested parties. The work is planned to
start in the second half of this year, and will look first at
maize.
The Council has also asked the Commission to consider whether we
could take steps to harmonise co-existence legislation. With
regard to this question, the jury is still out. The basis for a
decision will be a Commission report, due in 2008, on the
experiences so far with regulatory regimes and the practical
aspects of GM crop cultivation.
*****
Ladies and gentlemen,
Shortly after coming to the podium this morning, I included
biofuels in my list of hot topics in the media, and I certainly
don't intend to leave the podium again without saying a little
more about this subject.
Things have really got moving in the last few months. National
politicians at the highest level have sat up and taken notice of
the issues of climate change and energy security. And in
response to the Commission's proposals, in March this year they
set out key compulsory targets for renewable energy and for
biofuels, as you know.
So we have now moved to a new phase. Now, we have to deliver.
There is a heated debate about whether we can deliver on the 10
per cent target for biofuels, without putting a huge strain on
our food markets. Let me be clear: I do believe that we can.
This decision of 10 per cent was not a leap in the dark.
Analysis by the Commission indicates that, with this target,
prices for agricultural raw materials in the European Union
would increase by between 3 and 6 per cent for cereals, and
between 5 and 18 per cent for the major oilseeds.
As you know, prices for those raw products influence food prices
only to a very limited extent.
The cost of cereals makes up only around 1 to 5 per cent of the
consumer price of bread, which means that bread prices would
increase by less than 1 per cent – a hardly perceptible rise.
With regard to oilseed-based products: the increase in vegetable
oil prices would be greater. However, food-manufacturers using
vegetable oils can partly replace rapeseed oil with soyabean or
sunflower oil. Moreover, the higher the level of processing in
foods, the lower the share of the cost of vegetable oils in the
consumer price. Therefore, in highly processed foods (for
example, prepared meals, chocolate bars etc.), consumer prices
would remain stable.
Our estimates also indicate that, under current agricultural and
trade policies, a proportion of our biofuel supply (between 10
and 30 per cent) would be imported in 2020.
The level of imports depends essentially on the competitiveness
of European production of feedstock. We could boost this
competitiveness by abolishing set-aside and modifying the
cereals intervention system. There will also be a big lift for
feedstock competitiveness if second-generation biofuels, based
on feedstocks such as straw, become more cost-effective by 2015,
as many experts predict.
Developments such as these, along with increases in arable
productivity, would still leave us needing imports by 2020 – we
must not forget this. But they would ensure that the level of
imports required to hit the 10-per-cent target would not
overstretch the sustainable production potential in our main
supplier countries.
Overall, then, we think that the target of 10 per cent will not
create unmanageable tensions in markets, or put resources under
excessive strain.
Of course, we want to do everything possible to guarantee in
practice – not just in theory – that the biofuel used in Europe
will not have undesirable environmental consequences in terms of
net greenhouse gas emissions and loss of biodiversity. We are
currently defining a mechanism to ensure this.
This mechanism must work and it must be fair. It must not load
extra burdens onto European farmers, who already meet strict
environmental standards. It must also be compatible with WTO
rules and existing EU rules; and it must fall into line with our
efforts to simplify our policies.
Last month, the Commission launched a public consultation about
how to achieve these aims, and I look forward to hearing the
findings in due course.
Ladies and gentlemen,
I said at the beginning of my comments that I've been busy, and
I hope I've convinced you of this in the last few minutes. I've
had to compress some very complex subjects, each of which could
have taken up a whole speech for itself.
But I hope I've shown that, with regard to the many issues which
confront the grain and oilseeds sectors, I am listening
to what you have to say. Certainly, I have read with interest
the paper, drafted by the organisers of this conference, on
forthcoming European policy developments. I think we have a lot
of common ground to work with.
I hope I have also shown that I’m responding to problems
when they arise, and planning as far as possible for a
sustainable and prosperous future. You can be assured that I
will continue to do so.
Thank you for listening. |
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