Pekka Pesonen: The future CAP must seriously consider investments and innovation in agriculture

The challenges that the European agricultural sector is currently facing and the issues that have not yet been addressed in view of the future CAP, was the main topics of the speech of Secretary-General of Copa and Cogeca, Pekka Pesonen at the 6th Panhellenic Congress on the development of Greek Agriculture by GAIA EPICHEIREIN.

You can read the whole speech below:

– Ladies and gentlemen  – Let me first thank the organisers for the invitation to this important event.  – My name is Pekka Pesonen; I am the Secretary-General of Copa and Cogeca. I am a European of Finish nationality coming from a family farming background dating already for various generations. – Copa represents some 22 million farmers and their families across the EU and Cogeca represents more than 7 million farmers that across the EU are organised in 22 000 agri-cooperatives. These cooperatives process and trade 40% of the total output of the agricultural sector. – When I look at the title of your Congress, I realise that it clearly captures the changing moments that we are facing.  – We are renewing the European Institutions having entered in a new cycle; yet we are promoting and defending Europe. We are working on the future CAP to make it more modern and innovative; yet we are setting the CAP as one of the cornerstones of the construction of the European Union. – This brings immediately to my memory a quote from Heraclitus of Ephesus: “the only thing that is constant is change”. – So let me refer to some of the challenges we are currently facing:

(Future MFF) – We believe that the EU requires, in the future, a more ambitious budget. One that calls for a higher level of commitment by Member States. One that will deliver on the Union’s challenges and priorities. One that will not undermine nor put at stake current common policies such as the CAP. One that matches

farmers’ delivery of a higher degree of ambition for the environment and the climate. – The CAP is indeed a cornerstone of the construction of the European Union and must remain a strong, common and adequately financed policy. – For us this means maintaining the EU agricultural spending. That is keeping the CAP budget in real terms. This is how the ambitious targets for the climate, environment, competitiveness, growth and jobs can be met.  – We understand all the uncertainties that we have had since the Commission’s proposal on the MFF was presented, but I would urge the decision-makers to reach an agreement, sooner rather than later, on the future MFF. And to do so before an agreement on the future CAP.  – We firmly oppose the proposed cuts in the EU financing. We need sufficient additional funding to deliver on the CAP objectives and priorities. This is vital. The CAP is not for discount sale. – The CAP budget delivers excellent value for money for all EU citizens. It must continue to do so in the future, without any cuts.

(Common Agricultural Policy) – The CAP is an EU success story. Despite its flaws, it has delivered significant benefits for all European citizens: food security, the vitality of rural areas, and contribution to environmental challenges. – We welcome the European Commission’s efforts to modernise and simplify the CAP. But these efforts come with a reduction in its financing that we cannot accept. In particular, for Rural Development we are facing a significant reduction of the funds as well as a decrease in the EU co-financing rates.  – Besides creating imbalances between Member States, this will heavily impact our ability to achieve not only the CAP objectives, but also the EU’s international commitments. We strongly oppose these cuts.  – The co-legislators continue to work on the Commission’s proposals for the future CAP. However, there are a number of issues that still need to be clarified.  – On Simplification: The next CAP must become easier to use, and its system of controls and sanctions must be simplified. In this regard, we see some positive moves but ultimately all Member States must demonstrate their use of the simplest and least burdensome administrative requirements on farmers, the beneficiaries of the CAP. – The New Delivery Model must provide simplification and ensure the commonality of the CAP – one with common EU rules. We recognise the need to provide Member States with some degree of flexibility. However, Member States must ensure that they adopt a balanced approach to all three pillars of sustainability, when designing their strategic plans.  – The CAP Strategic Plans based on the nine specific objectives are of key importance. These must address sustainability in a balanced manner between its three pillars – economic, environmental and social.

– These must be developed with the involvement of farmers and agri-cooperatives and should be flexible enough to adjust to changes in conditions and structures in Member States over time. – We have concerns that the Enhanced Conditionality will represent a significant increase in the requirements that farmers must comply with as well as on their costs of production. Ultimately it will not deliver on simplification.  – Conditionality should comprise rules that are simple, realistic, easy to execute and control and should not jeopardise the well-functioning voluntary measures in Pillar II.  – We support measures to address environmental sustainability and climate policy in the CAP. However, this must not be done at the expense of the economic sustainability and competitiveness of the agricultural sector.  – It is imperative to maintain the communality of the policy when implementing voluntary measures in Pillar I. That is why we believe that Eco-schemes must be mandatory for Member States but voluntary for farmers.  – We also need more clarity regarding the type of agricultural practices that benefit the climate and environment that could be included under the eco-schemes. These must not compromise the agri-environmental measures under pillar II that have proven to work.  – The agri-environment-climate measure must continue to play an important role in the future, be responsive, adapted to working practices on the ground and the needs of farmers. We also believe that its potential contribution to the environment and the climate, by being a multi-annual commitment, is higher than Eco-schemes. – Capping of support: Copa and Cogeca opposes mandatory capping and degressivity of direct payments but we support the continued harmonisation of the level of direct support between Member States. In particular, on capping we can support a voluntary approach that takes in consideration the differences if farm structures across the EU. It must also allow for the full deduction of salaries of employees and non-remunerated family members.  – Copa and Cogeca strongly oppose the exclusion of areas facing natural or other specific constraints (ANCs) from the eligible interventions that contribute to the environmental objectives and that are part of the 30% minimum ring-fencing of the budget dedicated to agri-environment-climate measures (AECM). – The ANC measure helps farmers in these areas to continue to sustainably manage the agricultural land. It also plays a crucial role in preventing land abandonment, contributing to biodiversity, the natural landscape and to tackling climate change. Allowing a re-delimitation of ANC is therefore positive. – In this respect, it is fundamental that ANC support is re-integrated within the AECM as we currently have and as the Commission’s impact assessment suggests. ANC support does indeed have a positive impact to the climate and environment. – More specifically on AECM these need to be more attractive and adapted to working practices on the ground, local needs and farmers and forest owners’ actual conditions.  – Agriculture is facing a number of challenges and needs to respond to societal expectations.

– I have already mentioned how we have been delivering on the Sustainable Development Goals (SDGs) and how we are committed to do more for the environment and the climate. – In all of this the CAP plays a crucial role in maintaining vibrant rural areas and ensuring a sector that is economically, environmentally and socially sustainable at a moment where it is being faced with volatile markets and extreme weather events.  – It is therefore important to ensure that the CAP is equipped with the necessary tools to help farmers to remain economically viable and competitive while they respond to these challenges.  – Cooperatives are also facing challenges. They mostly are twofold: – On the one hand, they have reason to exist only linked with the activity of their farmer-members, as the cooperative projects are basically founded as response to producers’ needs.  – On the other hand, the construction and success of these projects are based on the active participation of the cooperators in the governance of the company. – We need to engage young farmers in agri-coops and in their decision-making bodies. We need their vision and hunger for the better future for their families. – Copa and Cogeca also welcome the Commission’s proposal to allow for producer organisations to be expanded as a tool for intervention in the market in other sectors.  – Recognizing the specificities of the agricultural sector and allowing farmers to work collectively are essential to strengthen farmers’ position in the food supply chain. The end result will be to improve their bargaining power and get a better share of the consumer euro. But we need to provide farmers with legal certainty to guarantee that they will use these policy tools.  – Within the CAP National Strategic Plans, the measures targeting investments and innovation recognised POs and cooperatives beyond the SME threshold must also be eligible for support. – The diversity of European agriculture along with its culinary heritage and consumers ‘expectations leads to quality differentiation as a strategic goal. This is what European Farmers and their cooperatives do in an effort to improve addedvalue, efficiency and competitiveness. – The CAP must therefore provide different ways to promote quality policy. To achieve this, quality must also be highlighted when developing the CAP strategic plans considering that it contributes to boost our competitiveness and meet consumers ‘expectations. – It is very important to promote and support farmers that want to differentiate themselves in the market. This can be done either through a Geographical Indication, or organic labelling, or certification under a recognised national quality scheme or any other tool that helps them to achieve this quality differentiation.  – Throughout the years, it has proved to be a very important instrument for European farmers and agri-cooperatives to increase consumers’ awareness of the high quality and added value of our products and the merits of EU agriculture.

– My last comment goes to the need to put in practice clear effective measures that will secure generation renewal and attract young people to farming. – In most countries, the farming population is ageing and in many countries, large numbers of farmers appear to have no successor.  – If we don’t curb this trend and find effective measures to attract new entrants and young farmers to the sector and remove obstacles we will be facing a situation where in ten years we will have lost a significant part of the farming population. – This is why generation renewal is key and a challenge for agriculture. We need to secure not only an adequate transition of the ageing farmers into retirement but also attract young farmers into the sector and keeping them in. – The future CAP must seriously consider the future of investments in agriculture and the innovations that we will need to feed Europe’s future.  – The ability to attract investment, like in any sector, is crucial for the future of our farming sector and of our cooperatives. But it also means supporting investments through grants, facilitating access to credit and helping out in providing guarantees for loans. – All this requires stability and the tools to adequately manage risks.  – Long-term support for young farmers to start and develop their businesses must be made available through the proposed CAP national strategic plans.  – Let me underline that with the current low level of income in the agricultural sector, it is difficult to attract new and young entrants to the sector. It is difficult to see a bright future. – Therefore, the income side of this equation must be addressed if we are to be effective in tackling generation renewal. This is clearly the role of the CAP. – To conclude, commonality, simplification and farmers’ income, alongside sustainability and climate change are key priorities for us. – If we do not see clear results on these, the economic viability and sustainability of the sector will be at stake. As a consequence we will have a rural exodus and farmers will not be able to deliver on environment and climate.