Agriculture

In May, Minister of Agriculture of the Republic of Lithuania Kazys Starkevičius went on a visit to Hungary where an informal meeting of the European Union Ministers for Agriculture and Fisheries was held. The meeting discussed the future of the Common Agricultural Policy (CAP) after 2013. Kazys Starkevičius assured that Lithuania’s position on one of the main issues of the CAP – direct payments – remained unchanged: direct payments in all Member States of the EU must be paid according to the uniform model, and their level shall be established according to the objective criteria, which assure competitiveness and equal farming conditions in the single market of the European Union.

- Your Excellency Minister, in March, Hungary, which currently presides over the European Union, submitted the draft conclusions concerning the Commission Communiqué to the Agriculture and Fisheries Council. What is CAP to be like after 2013? Lithuania and six other EU Member States – Denmark, Estonia, the United Kingdom, Latvia, Malta and Sweden – spoke against it. Why?
- Lithuania has spoken for the COMMON agricultural policy in all its utterances, both formal and informal ones. This means that we are for honest uniform methodology of distribution (calculation) of direct payments at the level of the entire EU. This principal approach remains valid for the newly reformed CAP after 2013. All Baltic States disapproved of Hungary’s conclusions in essence with respect to one point related to the future of the direct payments. Lithuania believes that uniform direct payments should be applied to all EU Member States, and equal conditions for competition should be guaranteed. I would like to remind you that the average of direct payments in the EU totals 249 EUR/ha, whereas Lithuania receives 143 EUR/ha, Estonia – 112, and Latvia – about 83 EUR/ha. Hence, the Baltic States receive the smallest support and seek to achieve that direct payments should be made uniform at the EU level. Meantime conclusions submitted by Hungary speak only about “more correct, more honest support”, however, this has not been concretised either by the terms or figures – that is, the level of “correct” payments and when it should start to function. This situation raises questions to us and our farmers.

- What arguments will you base yourself on when seeking to establish your position?
- Extensively discussing direct payments we established a block of 12 new EU countries. Marek Sawicki, Minister of Agriculture of Poland, who is a good friend of mine, has shown an initiative; however, at the last moment he withdrew and voted for the document submitted by Hungary. The Minister will have to explain to his farmers why he has taken such a decision. The conclusions submitted by Hungary had to be approved unanimously but this did not happen, so this document was the position of only one country. Now all the discussions will be held at the European Commission.
In June we plan to hold a meeting with Lithuanian MEPs and ask for their support in this issue, which is of great importance to our country. We want to remind you that earlier the argument of the main old Member States of the EU concerning smaller direct payments to the new Member States was that in our country both land and work force, as well as energy and industrial resources were cheaper. Furthermore, our farmers did not pay taxes but after our Government had started work, the farmers were immediately drawn into the system of social, health insurance and other taxes. Today we farm under exactly the same conditions as the farmers in the old Member States, but we all know that their economies are much more advanced than ours. We export about 70 percent of our production to the single market of the EU, therefore equal competitive conditions must be created for us, and uniform direct payments at the EU level would help do that.

- Is Lithuania ready to make compromises?
- Lithuania understands that a uniform payment for a hectare of agricultural land is not the best solution for the majority of countries, especially for the large countries where farming conditions are very different and which implement different regional policies. Therefore Lithuania wants the direct payment calculation model to be uniform to all EU Member States and to be based on the objective criteria. Those “objective criteria” should contain as few as possible economic criteria, which in case of economic crises can again distort sizes of direct payments in separate Member States.
I would also like to draw your attention to the fact that when moving to the new system of direct payments, when it is fully agreed on, the transitional period should not be applied to those Member States in which direct payments are smaller than the EU average. When moving to the new system of direct payments the transitional period should be as short as possible for other Member States – of the length necessary to avoid especially negative sudden changes, and at the same time seeking to refuse the “two-speed” policy as soon as possible.

- The CAP does not consist of direct payments only. How could you comment on other elements of the CAP, what is Lithuania’s attitude towards them?
- The CAP must be financed from the EU budget and should maintain both – pillar I and pillar II. According to the so-called two-pillar system, pillar I establishes measures for regulating the market and encouraging (direct support) farmers, and pillar II establishes rural development measures.
Lithuania assesses the proposals concerning measures regulating the market laid down in the Communiqué of the European Commission on the future of CAP after the year 2013 in essence in the positive. When food products markets are unstable and prices fluctuate constantly, these regulation measures are of great importance, they only have to be improved and simplified. Lithuania also speaks for the encouragement of the direct sales, such as farmers’ markets, sales directly from the farms, etc.
Lithuania assesses special support to the small farmers positively; however, applications of a new scheme of support should not become an additional administrative burden on the farmers and the institutions, which administer support.
At the informal meeting of the Council of Ministers of the EU I am going to raise a question about what measures we should take to prevent people from leaving the new EU Member States for other countries. For example, in Lithuania farms are already modernised quite well, however, more funds should be given to a general infrastructure: to improve rural environment and living conditions – to renew houses, roads, water systems. It is necessary to encourage small and medium-sized farms (family households), it is important to support a progressive and dynamic development of rural communities and to further develop the implementation of the Leader method.
In conclusion, I want to stress that the part that EU contributes to the direct payments is increasing with every year, however, the other part is paid from the national budget. For example, funds from the national budget constituted as much as 294 million litas in direct payments in 2010, and those from the EU funds accounted for about 900 million litas.

- Thank you.

In the photo:
Kazys Starkevičius
Minister of Agriculture of the Republic of Lithuania