The CAP will be reformed in 2011-2013. The related policy decisions will be of crucial importance to the viability of rural areas in Finland and other parts of the EU, as well as to European consumers, who will continue to expect a stable and safe supply of sustainably produced foods.
Finland has set out its views on various issues that must be addressed during the CAP reform:
- The EU needs a common, effective and well functioning agricultural policy to ensure the profitability of food production in all European regions and to safeguard the sustainable production of clean and high quality foodstuffs for consumers throughout the EU.
- For Finland it is important to uphold the European Model of Agriculture. Agricultural production, based on family farming, must be continued in all European regions.
- The CAP’s present two-pillar structure (production support and rural development) enables Finland to safeguard the coherent development of both agriculture and our rural areas. The CAP’s second pillar should be strengthened rather than weakened in the future. It is important to continue to balance out the inequalities caused by the variations in natural conditions between different regions and Member States across Europe.
- Europe will continue to need market management tools like those in the CAP. The volatility of agricultural prices and markets has increased, which is why we need effective safety nets. This is especially important for products such as milk, where the dismantling of the quota system must be counterbalanced by other arrangements designed to maintain the stability of the market. Finland sees a need for examining new risk management instruments such as insurance schemes, futures or mutual funds to balance out fluctuations in prices and incomes.
- The proper functioning of the markets is vital, and producers must be guaranteed fair returns. To achieve this we must look at the functioning of the markets and contractual relations along the food supply chain, to ensure that all the parties involved get a fair share of the market return.
- The direct payments made from Community funds should be gradually developed towards a regional flat-rate model covering all the Member States. However, it should be remembered that natural conditions, production costs, land prices and general living standards are far from uniform around Europe. The overall objective should be to set up a support system that will be more balanced and fairer in terms of the distribution of support between the Member States than the present system. Other key priorities include the need to make the single payment scheme simpler, more efficient and more transparent, while reducing its administrative costs.
- At least in the Finnish conditions there is a need to maintain targeted, coupled aid to preserve agricultural production and livelihoods in rural areas in remote regions and less favoured areas (LFAs). Finland’s harsh winters and other natural conditions limit the range of crops that can be cultivated and the types of production that can be practised. Only minimal amounts of maize can be grown in Finland, for instance. Due to such natural conditions the costs of agricultural production in Finland are considerably higher than in the EU on average.
- It is also important to consider how the specific needs of animal husbandry or specialised crop cultivation should be taken into account in the future, for example, through specific support measures similar to those in Article 68 of the present CAP. Animal husbandry and specialised crops are typically more labour-intensive forms of production that can significantly help to preserve the vitality of rural areas.
- The EU has become much more rural as a consequence of its two recent enlargements. Finland believes that both agri-environmental support and LFA-support should remain under the second pillar and not be put under the first pillar. The possibility to co-finance these measures is extremely important for Finland.
- When deciding on reforms related to LFAs both the definitions of areas and the levels of payments should be determined on the basis of objective criteria and calculations concerning natural handicaps, with no artificial ceilings set for payments. The criteria to be applied must reflect the differences in production conditions caused by differing natural conditions.
- Agriculture can play a crucial role in mitigating climate change and adapting to its consequences. Related measures include promoting the use of renewable energy resources, reducing the nutrient loads entering watercourses, and maintaining biodiversity in agricultural and forest environments. Such policies must be harmonised with Finland’s strategic policies for protecting the Baltic marine environment. Animal welfare issues are also becoming increasingly important. Tools to help address these issues are available under the rural development measures: investment support, training and advisory services for farmers, agri-environmental support, support for measures that enhance animal welfare, and support for innovations.
- Considering the need to meet the numerous challenges we face today, it is vital that the levels of financial support provided for agriculture and rural development within the EU-27 should be sufficient to cope with these challenges. The present system of modulation should be ended, and the currently modulated funding procedures should be transferred permanently to the CAP’s second pillar for rural development.