THE FARMERS VIEW POINT REGARDING THE ENTRY INTO THE EUROPEAN UNION
By Neoclis Tsappis
1. INTRODUCTION
First I would like to express my sincere thanks to the organizers of this General Assembly for the opportunity given to me to present something about the views of the Cypriot farmer regarding the accession of Cyprus to the EU.To my opinion this is an important event for the Cyprus agriculture and I am sure that the conclusions and recommendations of this General Assembly will be beneficial not only to the participants but to the Cypriot farmers as well. Agricultural Credit has played a fundamental role in the development of rural areas of Cyprus.
Agriculture is a vital part of Cyprus society and now is been called for even more consideration to be given to issues related to it: Acquis Comunitaire, Common Agricultural Policy ,free market of 480 millions, competitive enterprises, new types of financial support, food safety, the environment, landscape, rural development as well as sustainability and ecological concerns in a broader sense.
Cyprus is a full member of the EU for the last five months. It is very early to make an evaluation of the problems and other consequences, positive or negative, caused to the Cypriot farmer. The fact is that the life of the cypriot farmer will not be the same any more. It is a big fundamental change in his life and his occupation.
The Cyprus Republic is obliged as from May the 1st ,2004 to implement the Common Agricultural Policy of the European Union. Any state policy on agriculture should be in the framework of the European policies.The CAP which was developed to satisfy the needs of the agriculture of the previous Member States is a part of the policy of the new Member States
But at this moment we can present the very first points related to the accession to the EU from the point of view of the farmers. First and main point is that the farmers have understood already that the type and form of the financial support they had from their government is changed to something else that is not so convenient to get.
2.THE NEW COMMON AGRICULTURAL POLICY OF THE EUROPEAN UNION.
From the official internet site of EU we note the following:
The new CAP takes consumers' and taxpayers' concerns fully into account, while giving EU farmers the freedom to produce what the market wants.
2.1.Market and income support (Pillar 1)
Market and income support measures are those measures most closely identified with farming. They cover direct payments to farmers and continuing market-related subsidies under the common market organisations such as buying of products into public storage, surplus disposal schemes and export subsidies. Until now, income support and, to a lesser extent, market support has been the major areas of CAP expenditure. However, this is gradually changing as the CAP evolves.
2.2.Rural development (Pillar 2)
The increasingly important rural development measures aim at
􀂾 encouraging environmental services
􀂾 providing assistance to difficult farming areas
􀂾 promoting food quality
􀂾 higher standards and animal welfare.
These measures are jointly funded (co-financed) by the EU and by Member States. The new system of compulsory modulation (i.e. switching of funds from production to rural development) will be used to finance the introduction of the new rural development measures agreed in the June 2003 CAP reform, or to reinforce existing measures.
2.3.Ways and means to implement the CAP
EU policies to help agriculture provide:
􀂾 a single market – i.e. no trade barriers and free movement of goods within the whole of the EU;
􀂾 direct payments to farmers to give a guaranteed minimum level of income, but with no link to the quantity of production so as to remove any trade distortions;
􀂾 measures to ensure that agricultural markets are stable;
􀂾 aid towards rural development goals such as:
• financial incentives to farm in a better way for the environment, e.g.:
• incentives for farmers to find alternative forms of income (e.g. from tourism);
• encouragement to grow woodland and forests;
• encouragement to produce biomass for environmentally-friendly energy.
3. CYPRUS AGRICULTURE AND CAP
3.1.General
The Common Agricultural Policy offers the tools and the framework to all member countries to implement their agricultural policy. On the other hand the member-state formulates its own policy taking into consideration the local conditions .
The Cyprus government is implementing among others the Agricultural Development Plan of 2004-2006.This is a very ambitious plan and to my opinion, a very good plan. I think that offers the tools for every farmer to upgrade his farming enterprise. This Plan offers the framework and the tools for the establishment of other supporting bodies. But its implementation is not so easy. The farmers need to be trained properly, to be organized in the right way and of course to be supported to face the short term difficulties in their occupation. The successful implementation of this plan is not the problem of the farmers alone. I think that everybody should be informed and contribute in his way for the succesfull implementation of this plan.
3.2.Situation of Cyprus agriculture
Based on the Census of Agriculture 2003 and other publications the following general points will help somebody to have an overall picture and understanding of the prevailing situation of Cyprus Agriculture:
􀂾 The broad agricultural sector contributes 4% of the Gross Domestic Product. In the early sixties this figure was around 60%
o The number of people living in the rural areas dropped from 58% of the population in 1973 to 47% in 1976 and 32% in 1992.Now the figures are lower.
• Number of Holdings:44.611
• Total agricultural Area:156.378 Hectares
• Average size of Holding:3,51 Hectares
• Total number of plots:221.917
• Number of plots per holding:5
• Average size of plot:0,7 hectares
􀂾 The value of agricultural exports dropped in the period 1990 to 2001 in current prices by 33% of citrus,40% of potatoes, 72% of table grapes and 32% of wines and spirits
􀂾 The main partner of the exports of agricultural products are countries of EU-15 amounting to 80% of the total exports.
􀂾 The main partners of imports of agricultural products are : 28% from the EU-15 countries,30% of other European countries and 40% from other countries
􀂾 Small and fragmented land ownerships.
􀂾 In Cyprus the number of holdings less than 5 hectares amounts to 82% while in EU-15 this number amounts to 56%.It is concluded that Cyprus agriculture is characterised by its very small holdings and a deep fragmentation of the land ownerships.
􀂾 Very low income of the rural people from their agricultural activities. It is estimated that the present percentage, on the average, amounts only to 42% of the family income of the rural areas. The agricultural income depends mainly on the type of agricultural unit. Very low incomes benefit the growers of dry farming. Higher incomes benefit the farmers of irrigated lands and very high incomes have the business type of floriculture and animal husbandry units.
􀂾 The age problem of the rural people is another basic problem .For certain sectors of the agricultural economy the majority of the people engaged are over 60 years.
􀂾 The production cost is very high due basically to the fragmentation of land ownerships, the high cost of inputs such as water and the chemicals.
3.3.Description of the point of view of the farmers to the expectations of the EU
The EU Commissioner on Agriculture, Rural Development and Fisheries Dr. Franzs Fischler in one of his speeches described the EU expectations from the EU farmers. The following table was prepared to give an overall picture of the Cyprus farmers opinions to the points of Dr Fischler:
POSITION OF EU(Points of Dr. Fischler)
POSITION OF CYPRUS FARMER
We want farmers to resume their role as businessmen, producing for their customers rather than for the intervention stocks
We have to note that the farmers in Cyprus never produced for the intervention stocks and they always produced for their customers. Anyhow ,now they are obliged to produce the quantities, types and quality products that they can sell in a very competitive environment. Their production should be market oriented
The role of businessman has to be resumed by the farmer and their organizations. The transfer from the existing situation to the new will require time, effort and resources. It is a difficult task that may cause the abandonment of farming by a big number of part and full time farmers. .
We want to guarantee farmers a fair income. No more, no less: our farmers deserve to be duly rewarded for the quality products they supply, the environmental services they perform and their role in conserving country landscapes.
The guarantee of a fair income is again a very difficult task.
The Cyprus farmer has already experiencing the negative effects of the accession to the EU. Growers of cereals, vines, potatoes, decidous fruit trees and others are facing problems of selling their products at reasonable prices.
The import of several agricultural products from other EU member states abut also from third countries with the customs of EU caused the reduction of the prices of the local products below the production cost , in many cases, of the local products.
The average holding is very small and the direct single payments offered by the development or other schemes can not cover but a very small percentage of the loss of income.
The monopoly and the government guarantees to the Semi-govermental marketing boards were abolished as from May the 1st ,2004 because they are not compatible to EU legislation and general policy. This will cause a serious blow to the future of many farmers and to their income.
We want to free farmers from the red tape imposed by the CAP. They should be able to spend their day working their farm, not wasting it on paperwork.
The red tape is already imposed on the farmers. The paperwork required by the authorities , filling the applications to the various measures is huge. The whole process should be simplified in order to make it applicable to a greater number of farmers.