Agriculture in Europe: what is the future?

Agriculture in Europe: what is the future?
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This text is based on the speech given by Minister De Castro at the International Seminar "Agriculture in Europe: what is the future?" Wilton Park, 11 October, 2006.

Agriculture is the most ancient economic activity of human beings, therefore it’s commonly identified as a traditional sector and – unfortunately – very often considered a static sector, unable to actively enhance the economic and social development of our countries. Nevertheless, agriculture embodies a strong dynamism and will have to face, within the next years, many relevant and rapid changes due to external factors that are changing even more rapidly. This phenomenon involves global agriculture, but is particularly sensitive within the European Union.
Particular attention should be paid to EU enlargement, the launching of a new regional policy for the Mediterranean region, the progressive trade liberalization and the evolution of CAP.
I believe that Europe is currently facing a challenge where the opportunities outweigh the difficulties. The role of European farming is changing. Globalization, new regulations, competitive advantages, concern for animal welfare and environmental protection, rural development, consumer rights, are actually different aspects of a new role of farmers in rural areas.
Rural development – one of the most important innovations of the Common Agricultural Policy in recent years – should be seen as an additional instrument to increase efficiency of our agriculture and to enforce the link between competitiveness and new consumer’s demand. In this framework, where competition is evolving, the ideas and strategies behind the support to the sector change together with the needs of the consumers. The new CAP, must therefore answer to the evolving different needs of rural areas.
Multifunctionality, as well as products quality, has a complex meaning, including a variety of factors, both economic and cultural. Agricultural activity has a direct impact on the territory, the environment and human society with its culture.
According to our experience, the mere presence of agriculture in a particular area does not always imply positive effects, since in some specific cases highly-intensive production systems can produce some environmental problems. It is only by integrating into our agricultural policy a strong environmental component that the multifunctional nature of agriculture can show all its potential. But this is only one of the issues to be addressed.
Today the farmer has to directly face the market and all the multiple requirements of society. The core issue is the following: how to let agricultural enterprises adjust the need for environmental safeguard, food security, balanced development, animal welfare to competitiveness of our productions and their capability to face the challenges of international market.
The CAP is no longer a sectorial policy: it involves many different fields of our life and it is a policy for all citizens, for their food security and also for the areas where they live and work in. For this reason, agriculture cannot be treated like any other industrial sectors.
Over the years, the CAP has adapted to economic and social changes, and must continue this way, responding to the general demands of politics and economy on one hand, and the needs of agricultural markets on the other hand.
Other good reasons for an evolving CAP are to be found in the features of farm enterprises, the territory in which they operate, the products and their cultural and social roots.
The advanced globalization of trade and the trend towards higher standards of food safety and security should push the CAP in dynamic evolution.
A new vision of public intervention in agriculture is needed today. The pillar of the future CAP should be to focus on quality productions, not as an end in itself, but as a means for a more efficient competition. Indeed, the European model of agriculture is not only an answer to the needs of European citizens, but it can also be considered a tool for competition: quality is thus the first foundation for our policies.
The concept of quality is rather complex, and includes food security, hygiene, typical products, matching the taste of consumers, biological integrity, the link with the territory, traditions, culture and so on. Food quality can be seen as the great asset for Europeans for facing future global competition in the agribusiness market. In the last decade this strategy has already proved to be fruitful. The times when the European Union was a strong exporter of agricultural commodities are coming to an end, and the best opportunity for the EU Countries are linked to the ability to widely establish the high quality of their products. The EU is well-placed to prevail in this competition, as the main features of the European agribusiness system (traditions, human endeavour and favourable environmental factors) are already well-developed.
A further challenge at this point is: since the liberalization of foreign trade is a must, how can we match the defence of the agro food heritage of this continent to the need of a competitive European agriculture?
But the new CAP must both confirm the particular qualities of the European agribusiness system, the link to the environment, and follow the progressive opening to world trade, otherwise it will certainly not win the approval of either producers, consumers or international public opinion.
The challenge will only be faced by rejecting protectionism, while linking the liberalization of trade to mechanisms that will make sure the standards of quality and security, and also the regulations can be shared by the various players in European market.
It is clear that combining the challenge of competition in the global markets with support for the multi-functionality of agriculture and society needs proper policies. We have to identify and implement public intervention initiatives not distorting the markets and able to be useful to reinforce the environmental and social functions of the farming sector.
Competition is also based on the compliance with common rules: our farmers should comply with clear requirements on food security, environment, animal welfare and so on. Also our competitors trading in our markets should comply with the same requirements.
Today, farmers are more than ever, exposed to risk concerning the variability of their income. This is probably one of the points on which initiatives should be planned in order to make with more effectiveness, taking into account the inclusion of risk-management tools in the Green Box.
I would like to underline that a general debate should begin, not only within EU Member States, but also among the main world agricultural players, which can lead to an internationally shared vision of future choices in agriculture.
I think that time has come for crucial topics for the future of agriculture to be also discussed at a wider international political level. The outcome of these international debates, some important conclusions could inspire the decision-making of technical bodies, avoiding conflicting negotiations affecting agriculture of the EU Countries and of our partners worldwide.
Going to the conclusions, there is no country in the world not having its own independent agricultural policy. Political conditions can be very different, and so the approaches adopted, the intervention measures applied and the total resources available can also be very different but markets globalization is obliging CAP to be more and more globalized and we all have to give a right answer to our farmers!