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"Rural development as an effective instrument of EU policy", Speech by Fernand Boden at the Vienna University of Economics on the occasion of the Eco-social Forum Austria on rural strategies

Date of Speech : 14-02-2005

Place : Vienna

Speaker : Fernand Boden

Policy area : Agriculture and Fisheries Agriculture and Fisheries

Honourable Federal Minister Josef Pröll,

Dear President and retired Vice-Chancellor Dipl.-Ing. Dr Joseph Riegler,

Ladies and Gentlemen,

It is indeed a great honour and a pleasure for me to be here in Vienna, and in my capacity as acting Council Chairman to speak to such a select audience of experts on rural development as an effective instrument of European policy.

In view of the WTO negotiations, EU enlargement and the great challenges regarding competitiveness, food safety and animal and environmental protection, the Common Agricultural Policy has undergone radical changes over the past few years.

A new chapter in European agricultural policy has opened with the agreement reached in Luxembourg in June 2003 on the reform of the first pillar of the Common Agricultural Policy and its implementation as from January 2005.

This reform has considerably strengthened the EU’s position in the WTO negotiations and supports the harmonious integration of the agricultural sectors of the candidate countries into a common agricultural policy. It also makes European agriculture more competitive and increases its sustainability.

- In future, this delinking will enable farmers to better orient production to market demand

- New measures to improve quality and to adhere to cross-compliance were introduced

- And the modulation should make additional funds available for rural development.

What we absolutely want and need in Europe is competitive and sustainable agriculture, but to achieve this, we need an active and far-sighted rural policy.

As a result of the Salzburg conference in November 2003, the new orientation of the rural development policy, the so-called second pillar of the Common Agricultural Policy, was already worked out.

Among others, the following priorities were formulated:

- The competitiveness of the agricultural sector must be improved, while taking into account the diversity of the agricultural potential in the various rural areas. This is especially important for the new Member States, as agriculture in those countries is facing a fundamental restructuring.

- Innovation and diversification of activities must contribute to rural restructuring

- In accordance with the recent CAP reforms, rural development policy must create new opportunities and must be simplified considerably.

- The principle of subsidiarity must be fully applied.

The requirements for the new Regulation on rural development for the programme period 2007-2013 in our enlarged European Union are correspondingly high.

The consistent development of rural policy is a basic condition for effectively accompanying the ongoing process of CAP reforms and meeting the high expectations.

As you all know, intensive negotiations are currently underway in Brussels on the future Regulation on support for rural development. The Commission’s Proposal of 14 July 2004 was initially discussed and analysed in the working groups in this area under the Dutch Presidency in the second half of 2004.

In November of last year, the Council also held an orientation debate on the Proposal on support for rural development.

The Proposal was widely accepted and the Member States are able to approve the general goals on the orientation of European policy for rural development.

And who could oppose these lofty goals, such as supporting diversification and structural adjustments in the rural economy, maintaining cultural landscapes and improving the quality of life in rural areas?

However, different aspects must still be discussed in depth. For example, a majority of the delegations expressed reservations about the minimum payment rates by the Community for the three focal points and for the LEADER approach. They also wanted more flexibility for the Member States. Several countries also rejected the amount of the reserve for the LEADER approach. As regards the LEADER approach, for example, Austria – and the Austrians are not exactly laggards on the subject of rural development, quite the opposite, in fact - would have to almost triple its expenditure for this local, assuredly ideal, development strategy, in order to reach the minimum funding levels, which seemed a little too much even for my friend Joseph Pröll.

Straightaway in January of this year, the Luxembourg Presidency submitted a so-called “Presidency non-paper", which forms a preliminary working basis for further analysis and allows an agreement to be reached as quickly as possible.

In this working paper, we placed more emphasis on innovation, development and knowledge transfer and also included agri-food in the developmental measures eligible for support. We also made additional efforts to make the application of the individual measures more flexible and, especially in the area of evaluations, we simplified some aspects of the Commission’s Proposal.

In future, the Lisbon Strategy will also play an important role in the assessment of this important policy area. The Commission has announced that in future it will examine all tasks of the Community in terms of their contribution to realising this important growth strategy. For this reason, in future we must place greater emphasis on the contribution of rural development policy for reaching the Lisbon objectives, while bearing in mind the environmental and social dimensions of the Lisbon Strategy.

In the meantime, the working paper of the Luxembourg Presidency has been debated in the committees responsible and the forthcoming Agriculture Council on 28 February will also address this important dossier. In March, we will submit a new Presidency text that will certainly contain additional suggestions for compromise, with the hope that the greatest reservations of the Member States will be resolved. It is, however, also clear that several important policy items – for example, in matters concerning funding and allocation criteria – will be resolved only during the end phase of the Luxembourg Presidency.

My objective is to adopt this Regulation under the Luxembourg Presidency in order to allow all parties enough time and planning security to thoroughly prepare the necessary programming steps.

To reach this goal, I am counting, of course, on the complete support of MEP Ms Agnes Schierhuber, the rapporteur for this Regulation in the European Parliament, who is here today. I have already had a detailed discussion with this experienced expert. She has assured us, as has your Committee President, Joseph Daul, that we will soon receive the evaluation of the European Parliament. This makes me quite confident that we can adopt this Regulation during the Luxembourg Presidency, while giving appropriate consideration to the evaluation of the European Parliament.

The concept of multifunctional agriculture adopted in 1997 during the most recent Luxembourg Presidency should also be further developed in conjunction. Concretely, this means that my intention is to maintain a multifunctional, sustainable and competitive agriculture in all regions of the European Union and across as much territory as possible. A precondition is the recognition of and support for the great variety of services provided by farmers, and the less-favoured areas in particular deserve our undivided attention.

The basis for the future rural development policy is the Commission’s strategy paper with EU priorities on this matter. We expect the first working document in this area at the beginning of March. The Commission will submit the strategy paper by the beginning of May, which will then also be submitted to the Parliament and the Council.

This European strategy for rural development will serve as the basis for additional programming phases.

Thereafter, it will be the responsibility of the Member States and of the regions to define their own priorities and include them in the national strategies and programmes.

According to this draft, the strategies and programmes established will be implemented using four approaches and the measures provided for in those approaches:

1. In the first approach, agricultural and forestry competitiveness will be strengthened. It is undisputed that the structural change will proceed and that we must continue to support it with appropriate measures. In future, we will place more emphasis on development and innovation, because we need efficient farms and competitive upstream and downstream activity.

2. As the largest user of land – rural areas comprise 90% of the territory of the European Union – agriculture and forestry should make a positive contribution to the countryside and the environment. For this reason, environmental and land management are supported in the second approach.

3. In the third approach, the quality of life in rural areas will be improved and economic activity diversified through the support of economic activity, and through measures in favour of the agricultural sector and others involved in rural areas. Of course, the primary sector continues to play a leading role in the rural economy, but it is also becoming increasingly important to promote other aspects of the economy that complement the primary sector, to create jobs, ensure the provision of important services to the rural population and protect the cultural heritage of the countryside.

4. In the fourth approach, the proven Leader model will be continued, consolidated and included in the mainstream programme. Each programme will include a Leader approach. Based on local development strategies worked out using the bottom-up concept, the initiative will be implemented by local action groups.

Of course, Austrians do not need to be convinced of the primary importance of rural policy:

- Firstly, it is very much to the credit of former Agricultural Commissioner Franz FISCHLER that rural development policy has become such an integral part of EU policy;

- Secondly, it must be recognised that Austria has always played a leading role in the implementation of rural development policy and already invests considerable amounts of money in this second pillar of the Common Agricultural Policy. This is not least to the great credit of Federal Minister Josef Pröll and his predecessor Wilhelm Molterer, but also of other committed people and organisations.

We must provide the rural areas in our enlarged Europe with a clear view of their future. Indisputably, agricultural policy, and especially rural development policy, is of central importance in strengthening the economic and social cohesion of the enlarged European Union. More than half of the population of the EU lives in rural areas. Many of these people are still active in agriculture, especially in the new Member States. Support for rural development can make a significant contribution to providing this rural population with adequate living and working conditions and encouraging them to continue living there.

The new draft addresses precisely this issue. Its objective is to improve the competitiveness of agriculture, promote environmental and land management, as well as to push ahead the diversification of the rural economy and the creation of alternative revenues in rural areas.

All those who help make the decision on future funding must be reminded of this situation. I made a conscious decision not to go deeper into this subject, as we intend to keep this discussion separate in Brussels so that we can adhere to the short period of time allotted to us. Of course, the question of financing is of central importance, and we have convincing arguments in favour of providing adequate funding to this very important policy area. One of the most powerful arguments in favour would be, in my opinion, the timely political agreement on a far-sighted strategy and a forward-looking programme for the integrated and sustainable development of rural areas. For this reason, we should delink discussions on financing from the rapid processing of the instruments we intend to use to implement our rural policy. In the end, it will be incumbent upon the individual Member States to set priorities and to apply the funding, which we hope will be plentiful, as effectively as possible. We must make sure that, in keeping with the subsidiarity principle, countries have the necessary leeway to meet local and regional needs.

If we are successful, I have no doubt that rural development will be recognised as an effective instrument of EU policy.

In closing, I would like to wish you every success for the remainder of this winter conference and much luck in working out strategies for rural areas.

This page was last modified on : 15-02-2005

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