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Address by the President of the Agriculture and Fisheries Council, Iztok Jarc, before the European Parliament Committee on Agriculture and Rural Development Brussels

Check against delivery!

Mr Chairman,

Honourable Members of the Committee,

I am both honoured and pleased to participate in your meeting today and share with you the Council Presidency's vision on the priorities for the first half of this year in our joint field of policy and legislation.

I wish to underline the importance that I and the Slovenian Presidency attach to the important role which the European Parliament, and your Committee in particular, plays in the legislative process for the agriculture sector. I look forward to working closely with you to ensure smooth progress on the proposals currently before us.

Slovenia is the first of the Member States which joined the European Union in the last wave of enlargement to hold the Council Presidency. We will endeavour to effectively carry out the tasks entrusted to us.

Slovenia at the same time rounds up the first Trio Presidency of Germany, Portugal and Slovenia and their 18-month programme. I would like to take this opportunity to thank our German and Portuguese colleagues, in particular my predecessor Minister Silva, for their excellent work.

Agriculture, the area for which I am responsible, also occupies an important part of the Slovenian Presidency programme, since this semester we will direct discussions on the efficiency and effectiveness of the 2003 CAP reform in the context of the so-called “Health Check”. More than ever, your Committee will play a key role in this debate.

This major challenge apart, there is also a series of other important pieces of legislation already on the table, or expected shortly, on which progress must be made during the Slovenian Presidency.

The Presidency will dedicate all the necessary time and effort to this work and will do its utmost to ensure optimal cooperation between our institutions.

I trust that you share the will to jointly find adequate solutions for the formidable challenges which European agriculture has to face right now.

Environmental concerns and changing geo-demographic patterns are shaping a new European and international market landscape for agricultural products. Thus, the choices we make today will have tremendous impact on the future of European agriculture.

1. Wine and cross-compliance

Before dealing with the top-priority goals that the Slovenian Presidency is committed to achieve, let me refer to two important dossiers which must be dealt with in the short term, with a view to reaching a final decision on the basis of the very intensive and useful work carried out under the Portuguese presidency – I am referring here to wine and cross-compliance.

On wine, the Council reached a political agreement on 19 December. Our objective now that we have concluded discussions on the wine reform will be formal adoption by the Council of the draft regulation at one of its forthcoming sessions.

On cross-compliance, I am happy to inform you that the Council finally reached a political agreement last week following receipt of Parliament's opinion in December. Whilst this is a rather technical dossier, it is very important for the day-to-day work of farmers throughout Europe. The Presidency will strive to formally adopt the draft regulation by March at the latest.

2. CAP “Health Check”

Now, let us talk about the “Health Check”.

It will not be a surprise to you if I identify this matter as the biggest issue and main priority of the Slovenian Presidency.

We share the Commission’s stated goal of adopting the legislative instruments of the Health Check by the end of this year. That will require hard work by each institution and excellent cooperation between all institutions. On both counts, the Slovenian Presidency is ready to play its full part.

We have worked closely with both the outgoing Portuguese and incoming French presidencies to plan and coordinate work within the Council. The ministers already had their first chance to react to the Commission Communication when it was presented to the Council by Commissioner Mariann Fischer Boel in November. At the Council meeting last week, we had a first detailed policy debate. We have already begun a technical examination of the Communication in the Council, and our aim is for the Council to come to clear and early conclusions so that the Commission can take these into full account when preparing its legislative proposals.

The timetable is very tight, and every institution will have to do its part if we are to be in a position to adopt the legislative acts by the end of the year. That is why we, as Presidency of the Council, will begin a technical examination of the Commission’s proposals within the Council as soon as they are unveiled. Given that the legislative proposals will arrive in May, we will not be able to complete that technical examination. But we will do everything in our power to ensure that the Council’s work is advanced as much as possible by the end of our Presidency. That is the first of my commitments as President of the Agriculture and Fisheries Council. The second is to work closely with you, Honourable Members, so that both of our institutions can work together in harmony and cooperation on this crucial dossier.

As Commissioner Fischer Boel made clear when she came here last November to present the Commission Communication, the intention of this exercise is not to launch a new CAP reform but rather to adapt, consolidate, improve and update a number of provisions and regimes to the new state of play of agriculture since the 2003 CAP reform.

This reform represented a radical change in the CAP management of the past. After a few years of implementation, the moment has come, in conformity with the political decisions taken in 2003, for a stocktaking exercise, to evaluate the results and decide what should be done next in order for the reformed CAP to better adapt to the new economic, social and environmental conditions, needs and challenges we are all witnessing. Some improvements to the reformed CAP are certainly needed.

I will not go into too much detail on the issues covered by this undertaking, as I am well aware that the task will be arduous, and that you know all that very well. I am also aware that you have already started working and reflecting on all of these.

Let me just mention at this stage some of the concrete Commission ideas to be examined in this context, in particular:

– further decoupling of direct aid,

– simplification of rules for aid payments,

– an increase in the percentage of compulsory modulation for aid in order to boost the EC rural development policy, and

– transitional measures before the proposed abolition of dairy production quotas in 2015.

In addition, the Commission suggests abolishing compulsory set-aside and heading towards a phasing-out of intervention, notably for pork. The Commission proposes instead to develop crisis management instruments for farmers.

Furthermore, in developing new instruments or adapting them, we have to keep in mind the need for pursuing the process of better regulation and simplification in the best interests of the end users of Community legislation.

The financial framework within which we have to take positions and decisions, as you know, is as follows: we must consider the political decisions already taken for a mid-term review of the financial framework in 2008/2009 and for a capping of agricultural expenditure in the overall EU budget, which means a gradual decrease in real terms of the overall expenditure for the first pillar by 2013.

Our concrete task with the Health Check process is to prepare the EU agricultural sector as a whole and farmers across the territory of the EU to adapt to new realities in a way that preserves the economy of the sector and the main objectives of EU agriculture as enshrined in the EC Treaty.

New realities mean a complex set of elements today. To take a concrete example, the latest developments in agricultural markets have reminded us all not only that we live in a globalised world, but that these Treaty objectives aiming at competitive and multifunctional EU agriculture, at ensuring a fair income for farmers, security of supplies as well as price and market stability are still stunningly relevant today. The high cereal prices observed lately certainly have a positive effect on the income of cereal producers but have other negative effects, notably on inflation and on the income of other farmers or producers who are dependent on cereal supplies.

According to analysts, the price-rise trends observed in the markets of agricultural products may be lasting, for a number of reasons which are mainly external to our agriculture. Among these are the rapid development of large countries such as China, India and Brazil and the increase in demand for certain agricultural products in these countries as a consequence. We have already witnessed the political effects of high food prices, especially in less developed countries.

However, purely economic factors are just one element of the equation today. Other major reasons for this price rise in cereals are the effects of climate change on the environment and on agricultural production worldwide, as well as the rapid development of biofuels.

In the months to come, when examining the future of set-aside and of intervention instruments, notably in the cereal sector, these are some of the issues on which we will have to position ourselves with a political vision.

Stock farming, which in many regions is an important economic activity for development, and preservation of the natural environment play a special role in the European area. Therefore, we will pay particular attention in the context of the debate to continuing the decoupling of direct support.

In addition to the objectives I mentioned a moment ago aimed at future-oriented and competitive European agriculture, we also have to ensure that the EU agricultural sector continues to deliver the best quality food products that EU citizens and taxpayers are demanding in a way that promotes public health and preserves the environment in all its complex dimensions.

The issue of environmental protection is essential, and many features of the new post-reform CAP should have a positive effect on more environmentally friendly agriculture in Europe. Cross-compliance rules, on which we worked very hard in the last months to make them more effective, are essential to make progress in this context, as is an adequate rural development policy.

We should continue reflecting on these and other very important issues with regard to agriculture and the environment, such as declining biodiversity and soil degradation. We should also reflect on the reasoned, strategic and environmentally sustainable use and management of water for agricultural purposes in future.

In this context, let me also reiterate that the Slovenian Presidency sees the question of climate change as a priority issue. Agriculture can play a key role in the fight against climate change and would at the same time benefit directly from any improvement of the situation in this regard.

Time does not allow me to go into further detail, but it seems to me that the Commission rightly identified these elements I just mentioned and others as the set of main challenges and constraints we are all faced with in reflecting on the future of EU agriculture.

Mr Chairman, Ladies and Gentlemen,

Turning now to some more sectoral dossiers, I would like to mention the proposals we received from the Commission for three different issues –cotton, dairy products and the single CMO.

3. Cotton

On cotton, we have to conclude discussions on the Commission proposal for a new regime. As you know, this Commission proposal follows up on the European Court of Justice's ruling in September 2006 to annul the cotton regime adopted in 2004 by the Council, notably on the grounds that the principle of proportionality had not been duly respected and that an impact study should have been done in support of the measures proposed in the new regime. In response, the Commission did its homework and presented the Council with an impact study and a proposal for a new regime, which was generally welcomed by delegations in the Council.

The new regime proposed for cotton is similar to the one adopted in 2004 as far as payments, areas and level of decoupling are concerned, but includes a few significant improvements for the sector's management and with regard to the promotion and valorisation of EU cotton.

We are now expecting the opinion of the European Parliament, and we hope that the proposal, which was generally well received by delegations within the Council, can be adopted by the Council soon after receiving Parliament’s opinion.

4. Dairy products

Just in time for presentation at the last Council meeting in December, we received the Commission proposal to increase national milk quotas, accompanied by a Commission report on the subject.

It is obvious that this proposal will merit the Slovenian Presidency's particular attention, as the proposed date for the quota increase is 1 April 2008.

The proposed gradual increase of milk quotas is seen by the Commission as part of its “soft-landing” strategy in preparation for the abolition of milk quotas scheduled for 2015.

The proposal is therefore topically embedded in the overall context of CAP reform and the Health Check, so that the Presidency is all the more interested in Parliament's view on this item.

5. Amendment of the single CMO

Another dossier we have on the table during our Presidency is a Commission proposal to amend the single CMO Regulation. This work is meant to be a largely technical process of simplification and updating, and should therefore not involve any major difficulties of a political nature.

6. Other issues

Coming back to issues with a more general meaning, I would like to say a few words about statistics and forestry.

As regards statistics, we have several dossiers concerning agriculture and fisheries to deal with during our Presidency. This work should provide us with a good opportunity to strengthen the relationship between our institutions and gain experience in the codecision procedure. Deepening this cooperation is of the utmost importance in view of the entry into force of the Treaty of Lisbon on 1 January 2009, extending the codecision procedure to the Common Agricultural Policy.

Forestry is very important for my country. We rank third among the Member States in percentage of surface area covered by forests. We will continue the work in order to allow the EU to keep playing an active role in the United Nations Forum on Forests. The focus of the work will be on the implementation of the Instrument on Sustainable Forest Management, which was agreed at the Forum's last session and adopted by the UN General Assembly in December 2007.

Furthermore, the Slovenian Presidency is awaiting with great interest two Commission communications in the field of forestry: one on additional legal options in relation to the FLEGT Action Plan to combat illegal logging and related trade, and a second one on deforestation in relation to climate change. As soon as these communications are available, the Slovenian Presidency will have them examined by the appropriate Council preparatory bodies.

Other matters are becoming increasingly important for citizens and doubtless are to be taken into account in agricultural policy – I am referring to public health, animal health and welfare, and food and plant safety. These issues, too, occupy a key position in our work programme.

7. Public health

In the field of public health, several dossiers will be negotiated under the codecision procedure during our Presidency.

The first one is the proposal for a Regulation on maximum residue limits of pharmacologically active substances in foodstuffs of animal origin. Considerable progress has been achieved on this dossier. Still, important issues remain to be resolved: delicate questions like the inclusion of biocides in the proposed Regulation and reference points for action for substances without maximum residue limits will call for a sound inter-institutional response.

On a second important proposal I hope for swift agreement between our institutions: this is the Directive concerning the prohibition of hormones and beta agonists in stock farming. We all know the international pressure against our tight European rules in this area. But I am confident that both branches of European co-legislation will continue to follow, as proposed by the Commission, the path chosen in the interest of the European consumer.

8. Food safety/plant health

I should like to turn now to the area of food safety. The high level of protection of human and animal health, and of environmental protection, which the Union is committed to maintaining must begin with safeguarding plant health and crop quality in all the Member States.

It is with this aim in view that the Union's phytosanitary legislation is currently being redrafted. Our two institutions will be called upon to adopt two important instruments under the codecision procedure as soon as possible: I refer to the proposed Regulation on the placing of plant protection products on the market and the proposed Directive establishing a framework for Community action to achieve the sustainable use of pesticides. The European Parliament has shown how much importance it attaches to these two pieces of future legislation by the quality of the opinions which it has just delivered in the first reading and by the number of amendments which it has proposed.

In the Council, as you know, the examination of the Directive has already resulted in a political agreement, and therefore the Presidency will especially endeavour to make faster progress in a proposed Regulation, as we have set an ambitious goal to reach a political agreement.

In the area of phytosanitary legislation, the Council also strongly wishes to see quality criteria applied to the sale of seed and propagating material within the Community. Thus in June the Council is due to adopt a proposal for a Council Directive on the marketing of fruit plant propagating material intended for fruit production. It goes without saying that the Council will take utmost account of the opinion which you delivered last December.

As regards GMOs, food safety is an absolute, non-negotiable imperative for the Presidency. Therefore, in conducting the examination of the proposals that the Commission has submitted to the Council, in view of the authorisation of genetically modified products, the Presidency shall ensure that this work will address the highest level of protection of human and animal health and the environment.

Before leaving the subject of food safety, I should like to say a word about a forthcoming proposal which is due to be presented to the European Parliament and the Council in the coming weeks: a complete recast of the current legislation on the labelling of animal feed. The Presidency attaches great importance to this dossier and will therefore make an energetic start on examining the proposal and will look forward with great interest to your institution's opinion.

9. Animal health

In the field of animal health, the Slovenian Presidency is particularly attached to the follow-up of the Commission Communication on the Community Animal Health Policy. The Council adopted a set of conclusions in December and is very much interested in Parliament's report on this important Communication, which will result in a major overhaul of current European animal health policy.

A dossier which would need rapid treatment is the prolongation of transitional requirements for non-commercial movements of pet animals.

The intention of the proposal is to extend the transition period for the existing derogation to stricter requirements by 31 August 2009. This would give us all more time to reflect upon different options for long-term harmonised measures on the basis of a sound comparative impact assessment and in accordance with the opinions of the European Food Safety Authority (EFSA).

This is a good opportunity to thank the European Parliament for its recent proof of good will in a similar – and even more urgent – case: namely, the proposal on postponing the date for introduction of electronic identification for ovine and caprine animals. By accepting to vote under urgency procedure in December, the Parliament has helped avoid legal uncertainty, which could have become costly for economic operators.

A further priority for our Presidency will be the long-expected proposal amending the Regulation on animal by-products. The Commission's intention is to consolidate and simplify the existing Community rules on animal by-products and to make it consistent with other Community legislation on environment and waste, which are subject to codecision as well. This revision will have to take on board many important concerns raised in Parliament and the Council on this topic, such as provisions regarding small and medium-sized enterprises, disposal of imports for scientific research, and on-the-spot burying of carcasses in cases of natural disaster.

10. Animal welfare

The Slovenian Presidency attaches great importance to animal protection and welfare and will pay special attention to this field.

Since animal welfare is a precondition for animal health, it is as an important element of the proposed Animal Health Strategy.

In addition, there will be important proposals on the table in this field regarding systems of rearing laying hens, protection of experimental animals and animal welfare during slaughter, which will possibly be discussed during the Slovenian Presidency.

11. WTO/DDA Negotiations

I cannot conclude my speech without mentioning the WTO/DDA negotiations.

On this very important issue my intention is to pursue the good practices of my predecessors and ensure that the Agriculture and Fisheries Council is fully and regularly informed by the Commission. We will give the Council the opportunity to exchange views on progress in WTO negotiations in general and in particular on possible draft DDA agricultural modalities. All depends naturally on the direction these negotiations will take now.

A balanced agreement within a single undertaking remains the only chance of success of this process in the long run. Indeed, we should also keep in mind that the public acceptance of such an agreement is essential in a longer-term perspective.

A balanced agreement means that we have to obtain parallel and equivalent concessions from our partners in return for the concessions we are ready to accept for the sake of reaching an agreement. And that our partners should accept that we also have to safeguard our active interests as they defend theirs.

But this certainly means that we have to closely weigh and evaluate, politically and from the economic point of view, the costs of non-agreement in the long run, not only for the world's economy and growth, but also for our economic sectors.

To conclude on this item, allow me to restate that in these discussions, as you know, demonstrating solidarity and unity among ourselves, within the EU and with the outside world, is essential to preserving our collective interests.

Mr Chairman, Members of the Committee on Agriculture and Rural Development,

There are of course other matters on the Presidency's agenda which I have not mentioned, these being mainly of a technical or routine nature. Those which I have described are what I consider to be the most important and most labour-intensive issues for the Slovenian Presidency.

As I said at the beginning, good cooperation with you is an essential tool: as the country holding the Presidency of the Council, Slovenia will do whatever it can to ensure that we maintain the highest level of cooperation and with this synergy achieve great progress on all dossiers.

Thank you for your attention.

I am happy to take any questions you might have.


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Date: 29.01.2008