Brussels, Belgium
September 26, 2007
Link to this release in other European languages
European Union agriculture
ministers today approved the Commission's proposal to set at 0%
the obligatory set-aside rate for autumn 2007 and spring 2008
sowings. The change comes in response to the increasingly tight
situation on the cereals market. It should increase next year's
cereals harvest by at least 10 million tonnes. In the EU-27, a
lower than expected harvest in 2006 (265.5 million tonnes) led
to tightening supplies at the end of marketing year 2006/2007
and to historically high prices. Intervention stocks have shrunk
from 14 million tonnes at the beginning of 2006/2007 to around 1
million tonnes now. The future of the set-aside system will form
part of the debate to be kicked off by the Communication on the
CAP 'Health Check' on 20 November. This will also address the
issue of how to retain the environmental benefits which
set-aside has brought. Setting the rate at zero does not oblige
farmers to cultivate all their land. They can continue with
voluntary set-aside and apply environmental schemes.
Mariann Fischer Boel, Commissioner for Agriculture and Rural
Development, said: "I'm delighted that the European Parliament
and EU farm ministers were able to take such a quick decision.
This will allow farmers to plan in good time for next year's
harvest. It will hopefully boost production by at least 10
million tonnes and release some of the pressure on the market.
Now we are looking ahead to the CAP Health Check where we will
look at whether set-aside is still an appropriate tool. Of
course we want to ensure that we retain the environmental
benefits it has brought."
The cereals market is currently characterised by historically
high prices. The 2007 cereals crop is now estimated below last
year's level because of dry and unusually hot weather in April
followed by adverse summer weather in western Member States and
drought and heat-waves in the Southeast of Europe. This outlook
is likely to lead to a further reduction in the EU of private
cereal stocks by the end of the 2007/2008 marketing year. At
global level, closing stocks in 2007/2008 are expected to fall
to a historically low level, especially in the major exporting
countries.
The current area under obligatory set-aside amounts to 3.8
million hectares in the EU. If the set-aside rate was set to 0
%, the effective return of land could be between 1.6 and 2.9
million hectares. Considering average trends, it is likely to
bring around 10 million tonnes of grains onto the market. If
farmers decide to use the maximum amount of land possible to
produce cereals at the expense of other crops especially
oilseeds, this quantity could reach 17 million tonnes.
Background
Set-aside was introduced to limit production of cereals in the
EU and applied on a voluntary basis from 1988/89. After the 1992
reform, it became obligatory i.e. producers under the general
scheme were required to set-aside a defined percentage of their
declared areas in order to be eligible to direct payments. With
the 2003 reform, they received set-aside entitlements, which
give the right to a payment if they are accompanied by eligible
land put into set-aside.
The rate of obligatory set-aside was initially decided every
year but in 1999/2000 it was set permanently at 10 % for
simplification purposes. In the new Member States that opted for
the Single Area Payment Scheme (SAPS), farmers are exempted from
the obligation of set-aside (Poland, Czech Republic, Slovak
Republic, Hungary, Lithuania, Latvia, Estonia, Cyprus, Bulgaria
and Romania).
Commissioner Fischer Boel already announced to the Council on 16
July her intention to submit the present proposal. Since then
the estimate for the EU cereals crop has been revised down and
prices have kept rising. |
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