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The European Commission proposes a new partnership between Europe and its farmers

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Brussels, 12 October 2011 The European Commission has presented today a draft reform of the Common Agricultural Policy (CAP) for the period after 2013. This draft aims to strengthen the competitiveness, sustainability and permanence of agriculture throughout the EUin order to secure for European citizens a healthy and high-quality source of food, preserve the environment and develop rural areas.

The European Commission is proposing a new partnership between Europe and its farmers in order to meet the challenges of food security, sustainable use of natural resources and growth. The next decades will be crucial for laying the foundations of a strong agricultural sector that can cope with climate change and international competition while meeting the expectations of the citizen. Europe needs its farmers. Farmers need Europe’s support. The Common Agricultural Policy is what feeds us, it’s the future of more than half of our territory‘, said Dacian Ciolo?, Commissioner for Agriculture and Rural Development.

The reformed CAP will make it possible to promote innovation, strengthen both the economic and ecological competitiveness of the agricultural sector, combat climate change, and sustain employment and growth. It will thus make a decisive contribution to the Europe 2020 strategy.

The ten key points of the reform

1) More targeted income support in order to stimulate growth and employment

In order to enhance the EU’s agricultural potential, the Commission is proposing to support farmers’ income in a fairer, simpler and more targeted manner. Basic income support will affect only active farmers. It will reduce gradually from EUR 150 000 (degressivity), with a ceiling of EUR 300 000 per farm per year, and will take account of the number of employees created by holdings. It will also be more fairly distributed among farmers, regions and Member States.

2) More responsive and adequate crisis management tools in order to meet new economic challenges

The volatility of prices is a threat to the agricultural sector’s long-term competitiveness. The Commission is proposing more effective and more responsive safety nets for the agricultural aspects of the supply chain that are most at risk of crisis (private storage and public intervention) and to promote the creation of insurance and mutual funds.

3) ‘Green’ payments for long-term productivity and for preserving ecosystems

In order to reinforce the ecological durability of the agricultural sector and enhance the efforts of farmers, the Commission is proposing to dedicate 30% of direct payments to practices which enable optimal use of natural resources. Those practices, which are easy to implement and are ecologically efficient, are: crop diversification, maintenance of permanent pasture, preservation of ecological reserves and landscapes.

4) Additional investment in research and innovation

In order to put in place knowledge-based farming and competitive agriculture, the Commission is proposing to double the agronomy research and innovation budget and to take steps in order to ensure that the research results are translated into practice by means of a new partnership for innovation. This funding will encourage the transfer of knowledge and advice to farmers and support research projects relevant to farmers by ensuring closer cooperation between the agricultural sector and the scientific community.

5) A more competitive and balanced food chain

Agriculture is at the base of the food chain, but it is highly fragmented and unstructured. To strengthen the position of farmers, the Commission proposes to support producer organisations and inter-branch organisations and to develop short circuits between producers and consumers (without too many intermediaries). Furthermore, the sugar quotas, which have lost their relevance, will not be extended beyond 2015.

6) Encouraging agri-environmental initiatives

The special nature of each territory should be taken into account and agri-environmental initiatives at national, regional and local level encouraged. In order to do this, the Commission is proposing that the preservation and the restoration of ecosystems and the fight against climate change, together with the effective use of resources, should be two of the six priorities of rural development policy.

7) Aid for young farmers setting up

Two thirds of farmers are over 55. In order to support job creation and encourage the younger generation to enter the agricultural sector, the Commission is proposing to create new start-up assistance accessible to farmers under 40 during the first five years of their project.

8) Rural employment and entrepreneurship stimulated

In order to promote employment and entrepreneurship, the Commission is proposing a number of measures to stimulate economic activity in rural areas and encourage local development initiatives. For example, a starter kit will be created which will provide support for micro-business projects with financing of up to EUR 70 000 over a period of five years. LEADER local action groups will be strengthened.

9) Better account taken of fragile areas

With a view to avoiding desertification and preserving the richness of our territory, the Commission is enabling the Member States to provide more support for farmers located in areas with natural handicaps by means of additional compensation. Such aid would be in addition to other subsidies already available in the context of rural development policy.

10) A simpler and more efficient CAP

To avoid unnecessary additional administrative costs, the Commission is proposing to simplify several CAP mechanisms, including the cross-compliance rules and control systems, without sacrificing effectiveness. Moreover, support for small farmers will also be simplified. A flat-rate payment will be created for the latter, ranging from EUR 500 to 1 000 per farm per year. The sale of land by small farmers who cease agricultural activity to other farms willing to restructure their farms will be encouraged.

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