Speech by EU Commissioner Fischer Boel - Agriculture: Outlook for Hong Kong

Sommaire: Speech by EU Commissioner Fischer Boel - Agriculture: Outlook for Hong Kong (12 December 2005: Hong Kong)

Speech by Mariann Fischer Boel, Member of the European Commission responsible for Agriculture and Rural Development, Family Farmers' Conference on International Trade, Hong Kong

Agriculture: Outlook for Hong Kong

During the meetings in Geneva, it became clear that we could not finalise "modalities" for the Doha Round in Hong Kong.

But I still believe we can move the talks forward this week.

We must ensure that, at the end of the day, the Round delivers what was promised in Doha.

To achieve this, Hong Kong must "top up" what is in the Draft Declaration put together by Pascal Lamy.

A real, concrete and meaningful development package must be put together, to help the poorest countries get as much as possible out of the DDA.

Our Everything But Arms agreement gives the Least Developed Countries completely duty and quota free access to our markets.

I call on all other developed economies and advanced developing economies to match this initiative and I welcome last week's announcement by the Japanese government.

Cotton must be a key part of this development package. Thanks to the reform of 2004, the EU can already deliver on this too.

In the agricultural negotiations, the past three months have brought a lot of progress.

We now have offers on the table from many of the major players.

But some of the offers from our partners still contain big black holes.

On October 28, the EU tabled a bold and ambitious offer.

I have been surprised and disappointed by the reception our proposals have received.

This is by far the boldest move we have ever made on agriculture. It will mean very real challenges for European farmers and it will offer our partners substantial new market access.

We offer to phase out all export refunds. We offer a 70 percent cut in trade-distorting domestic farm subsidies. And we will cut our average farm tariff from 23 to 12 percent.

Even sensitive products will witness very significant market opening through tariff cuts and larger import quotas.

In the EU, we agreed on a radical reform in 2003 and 2004 - and the sugar reform last month

We do not want an industrialised type of agriculture in the EU.

The CAP reforms of 2003 laid much greater emphasis on a broader Rural Development policy.

For me, this is the most forward-looking part of the CAP and a life insurance policy for rural areas.

Based on OECD definitions, rural areas make up 90 percent of the territory of the enlarged EU, and 50 percent of the population still live in rural areas.

Thanks to our revised Rural Development rules - adopted by EU farm ministers in June - the policy now covers a much wider range of possibilities.

These include modernisation of on-farm activities, agri-environmental programmes, and - crucially - efforts to create new jobs and boost growth in rural areas.

This money is absolutely vital if Europe is serious about its drive to increase its competitiveness - what we call the Lisbon Agenda.

That is why I hope that EU governments will approve a sufficient budget for Rural Development in the next budget period.

European agriculture has a very different structure to, for example, US farming. Our average farm size is 18 hectares, compared to 180 in the US.

We attach great importance to environmental protection and animal welfare.

We have now proposed to lower tariffs. This combined with domestic reform and the phase out of export refunds will all make room in the market for others to fill.

And how can anyone claim that what we are proposing is not a serious offer?

Now we need to move things forward.

Two weeks ago in Geneva, I proposed that all parties should agree by 1 March precisely what we mean by parallel commitments on export subsidies.

Of course, our offer to end export subsidies depends on similar disciplines from others.

So far, we are yet to see any meaningful commitment from the US to discipline its use of "food aid" to offload domestic surpluses.

We need to find the right way to do this while making sure that genuine food aid continues to play its essential role.

Likewise, the US must accept real disciplines on its export credit programmes below 180 days.

We also need clear commitments from countries like Australia, Canada and New Zealand to discipline the trade-distorting practices of their State Trading Enterprises.

Since 1992, and especially in the past three years, the EU has carried out radical reform of its subsidy programmes.

Around 90 percent of our direct payments to farmers are now "decoupled" from production. This makes our policy trade-friendly.

We call on the Americans to carry out effective and real reforms of their trade-distorting subsidy programmes - in particular the so-called "Counter Cyclical Payments".

While our support payments continue on a downward trend, US payments continue to increase.

US commodity support will increase from 5.5 to 14.1 billion dollars (or a 250 percent increase) from 2004 to this year.

On Market Access, I believe our tariff proposal represents the sensible middle ground between the wishes of the competitive agricultural exporters and poor countries which remain dependent on preferences.

No-one should forget that we are already the most open market in the world to farm imports from the poorest countries.

We take 85 percent of Africa's agricultural exports and 45 percent of those from Latin America.

We import as much farm produce from the developing countries as the US, Canada, Japan, Australia and New Zealand combined.

The market access proposals from some of our partners do not make a sufficient distinction between developed and developing countries.

The US proposal is incomplete in this respect.

We say that developing countries should only do two thirds of what we have to do and that the poorest countries should get a "Round for free".

Some of the other proposals on the table would undermine poor countries' preferences and wipe out much of their exports to the EU.

Their market share would be taken by countries which practise large-scale industrial-style agriculture.

Preference erosion is a big issue for developing countries. We have to find a way to cushion the most vulnerable from its effects.

Sugar is a good example of how Europe is trying to cushion developing countries. The Commission has proposed an annual fund of €190 million to help ACP sugar producers adjust to our recent sugar reform.

I hope EU leaders will approve this proposal as part of their discussions on the future EU budget.

I also want to underline the importance for the EU of better recognition for Geographical Indications.

I hope we can return from Hong Kong with a clear undertaking that our partners will engage in a serious discussion on protecting GIs.

This is essential for the EU type of agriculture - to sell products coming from certain regions with a special history behind them.

To conclude, a few words on what I hope for in Hong Kong.

A real development package, to include cotton and across-the-board quota-free, duty-free access for the LDCs.

We need to agree on 'building blocks' to top up the Lamy paper - not just on agriculture, but on industrial triffs and services.

We need to leave Hong Kong showing we've achieved something real.

And a real sense of momentum, so we can achieve full modalities in 2006.

So far, there has been too much focus on agriculture.

Now it's time for others to get serious on other issues.

Thank you.

See also: Key facts on EU agriculture

Ref: SP05-323EN
Source UE: Commission Européenne
UN forum:
Date: 12/12/2005

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