AGRYA
Agricultural & Rural Youth Association
The role of young farmers’ organisation in the CAP reform
Dr. Miklós Weisz
associate president
Topics
1. Young farmers’ status in the EU and in Hungary
2. About AGRYA
3. Needs for the CAP reform
4. Current activities
1. Young farmers’ status in the EU and in Hungary
Problems in the generation renewal
Test
• What is the percentage of young farmers below the age of 35 in Europe?
6%
• What is the percentage of older farmers, over the age of 65 in Europe ?
Over 34%
Test
• How many farmers are over the age of 55 in Europe?
Almost half of all agricultural workers are 55 years or older.
At EU-27 level there is appr. 1 farmer of less than 35 years old for each 9 farmers of more than 55 years.
• How many farmers are there over the age of 65?
More than 4.5 million farmers are over the age of 65 in Europe.
Participants in the Hungarian agriculture (2009)
Companies, co-ops: 13 352
Private producers: 626 420
Who apply for subsidies: ~ 180,000
Generations in agriculture
2000 2010
Young farmers (< 35): - 2,1%Farmers (35 – 54): - 5,3 %
Companies, co-ops
Management:
~ 53%: aged 50-62
~ 16-17 %: retired
Generation change without new generations
Support measures for generation changein RD Programmes
• Installation aid for young farmers
• Early retirement for old farmers
• higher support for some rural development measures +10%
European Agricultural Fund for Rural Development
Axis 1 Competitive-
ness
Axis 2 Environment
+ Land Managem.
NHRDP
2007-2013
Axis 4
LEADER
Axis 3 Economic
divers. +
Quality of life
48% 31% 12% 5%
Measure 112 rationale:• Against the context of an ageing agricultural labour
force, the future of the farmers’ profession must be ensured
• Young farmers can bring new skills and energy, and a more professional management to the farming sector
• Consequently, a high level of young farmers will lead to:
increased adaptability in the face of new challenges
higher labour productivity
For 2007-2013, a €5 billion total public expenditure is programmed
€2.89 billion EAFRD contribution and €2.11 billion National/Regional contribution
Measure 112 has been included in the RDPs of 24 Member States
– (not selected by Malta, Netherlands and Slovakia)
Highest total public expenditure programmed is €1.6 billion for France
Lowest total public expenditure programmed is €4.8 million for Germany
Source: European Commission – DG Agriculture and Rural Development
1.291.29%% 1.571.57
%% 0.030.03%%
1.341.34%%
2.402.40%%
3.343.34%%
2.982.98%% 0%0%
Installation aid in Hungary (2007-2013)
1. round: 2007. december 3. – 2008. február 7.
- 2.514 applications, from which- 1.465 won
2. round: 2009. szeptember 15. – október 31.
- 6.145 applications, from which- 906 won
3. round: 2011. autumn ??
Installation aid
• Non-refundable subsidy, the amount depends on the planned size of the farm (in ESU) in the 4th year:
- 4 - 6,99 ESU: 20 000 euro
- 7 - 9,99 ESU: 30 000 euro
- above 10 ESU: 40 000 euro
• 90% of the subsidy: advanced payment
• 10%: after reaching the farm size
Criteria for eligibility
• aged between 18-40
• first time farming (establishment of a new farm or take-over)
• agricultural education
• …
10 ESU – in hectares
2007(251,77 )
2008(253,73)
2009(266,7)
2009(mod. SGM)
2010(270,42)
2011(277,95)
Wheat 33 33,3 35 25,2 25,5 26,3
Maize 24,5 24,7 26 18,6 18,9 19,4
OSR 29,7 30 31,5 27,7 28 28,8
Grape 8,5 8,6 9 7,1 7,2 7,4
Early retirement
1. round: 2007. december 3. – 2008. január 15.
61 applications, 36 won
2. round: 2010. március 1-31.
71 applications, 46 won
NHRDP: 4.500 was planned!
(In Germany: 17.000)
What are the hindering factors to be a farmer?
What do you think?
The most important difficulties
Access to credits
Access to subsidies
Red tape
Price volatility
Training
Other
Access to land
Access to land
High installation costs
Estimation of Profitability
Enough for subsistence
Average living standard
Extra living standards
Intention for Diversification
In the next 5 years: 93% plans
Processing
Services
Tourism
Bio E production
Other
2. About AGRYA
• generation based (<40 years old)• national• non-political• agricultural (and rural) association
In connection with more than 3,000 Hungarian young farmers
Since 1996
AGRYA Members
• From the whole country
with different activities:- Crop production
- Animal husbandry
- Horticulture
- Organic Farming
- Alternative activities (rural tourism, bio energy, food processing,…), Innovative projects
Farming and selling
• General problems: boom and bust, price volatility, financing,…
• And special ones:Generation change, farm installation, structural problems,…
Selling is rather done individually, but co-ops are forming
Aims of AGRYA
• To protect and represent the interests of young farmers in Hungary, and in international organisations.
• To organise vocational programs for its members helping their farming
• To prepare & develop young farmers for the changes and challenges connected with the EU membership
• To protect agricultural and cultural traditions, and to strengthen rural areas
Main ActivitiesConferences
Young Farmers’ Annual Conference
Young Farmer Club discussions
www.agrya.hu
Call Center
Representative work
• Participation in national boards (MRD - VM)
• Rural Development Programme – Planning
• Rural Development Programme – Monitoring Committee
• Hungarian National Rural Development Network
„Second Wave” Programme
For new members
From the younger generation (aged 18-25, mainly farmers’ children)
- Vocational trainings
- Study trips
To strengthen their inherence with agriculture
International activities
CEJA (2004-)
RYE (2006-)
Exchange programmesInternational Projects (Citizenship, Youth, Leonardo)
Central European Rural Youth Co-operation – CERYC
Sloven – Czech – Polish – Slovak – Romanian – Bulgarian – Hungarian
Cooperation programme
Regional cooperation:- Similar problems – similar solutions- common representation in international organizations- best practices, references- media appearance
„The most innovative young farmer in Europe – 2006”AGRYA delegate
Kamilla Kesjár - finalist „Most Innovative Young Farmer in Europe - 2008”
Strategy
„Build-up a Community
With Professional Work”
Presidency
Altogether 7 members
+ National Office
Running projects
„Grow your own”
- Vegetable seed to 2000 children
- Competition: photos, blog, web-page
- Key words:
local production, self-sufficiency
value of own work, responsibility
Running projects
Rural Adventure
• Youngs from cities:
one week on a farm
• Work together with the young farmer
• Competition: blog, photos, Facebook, Twitter
3. Needs for the CAP reform
Foundation of the CAP
1957 Treaty of Rome
agriculture a special concern:
- low incomes and declining rural areas
- high share of employment and of consumers expenditure
- food security
- strong political lobby
CAP Objectives
Article 33 of the Treaty of Rome - increase agricultural productivity to ensure a
fair standard of living for agricultural producers- stabilise markets- assure availability of supplies- ensure reasonable prices to consumers
CAP principles
• Single market: free trade in agricultural products;
• Community preference: a preference for products from the EU (by discouraging imports);
• Financial solidarity: regarding the CAP, all members have to pay
CAP objectives and tools
Objectives• Increase Productivity• Standard of Living• Stabilize Markets• Guarantee Supply• Reasonable consumer
price
Tools• Direct Support• Intervention prices• Export subsidy• Consumer Incentives• Import levies
Mechanisms to achieve these Objectives
Isolate the EC Market from competing imported products
EC MarketWorld Market
World Market
Set high target prices which the regulator hopes the farmer will receive
TARGET PRICE
Set a Low Intervention Price at which the Regulator will always purchase
TARGET PRICE
INTERVENTION PRICE
Market Functions within the Ceiling and the Floor:
actual prices vary according to supply and demand
TARGET PRICE
INTERVENTION PRICE
If there is too little supply and prices rise too much, then the border protection is changed to
allow for supplies from outside
INTERVENTION PRICE
TARGET PRICE
Tariffs are lowered or supply is increased through TRQs
If there is too much supply then the regulator intervenes to withdraw products from the market
TARGET PRICE
INTERVENTION PRICE
Subsidies for sales on the world market
53
Tariffs are lowered or supply is increased through TRQs
CAP impact
– farmers responded by intensifying production in supported sectors
– surpluses required increasingly heavy expenditure - grain and butter mountains, wine lakes, cost of export refunds etc
– friction with other suppliers to the world market who were not so reliant on subsidy - EU accused of dumping subsidised products on LDC
– in some cases intensification of agricultural production led to environmental damage
Benefits from the CAP
Self-sufficiency of food supplies in the Community - agricultural output increased greatly.
Food security was assured. Agricultural markets were stabilised. Farmers enjoyed a fair standard of living -
although large farmers and farmers in the North of Europe benefited most from this situation.
What went wrong?
Guaranteed prices - overproduction; Problem of surpluses began to emerge; Big farmers produced more and thereby earned
more money; small farmers needed assistance earned less;
In order to increase output - soil with excessive amount of fertilisers, herbicides: environmental problems
Quotas, levies, tariffs in agricultural trade - problem for exporters to the EC and to promote open trade and further liberalisation.
Dumping on world markets distorted prices and antagonised non-EU producers.
Consumers however lost out - high food prices
Historical development of the CAP
Reducedsurpluses
Environment
Incomestabilisation
Budgetstabilisation
Food security
Improvingproductivity
Market-stabilisation
Incomesupport
Overproduction
Explodingexpenditure
Internationalfriction
Structuralmeasures
Deepening the reform process
Competitiveness
Rural Development
Market orientation
ConsumerConcerns
Ruraldevelopment
Environment
The Early Years
The Crisis Years
The 1992Reform
Agenda 2000
ProductivityCompetitiveness
Sustainability
CAP Reform2003
Milestones of the CAP
1957: Treaty of Rome
1968: Common Market Organizations
1984: Supply control (dairy quota, set aside)
1992: Mac Sharry reform: price reductions and compensatory payments (area; livestock)
2003: Single Payment Scheme, Cross Compliance; Rural Development Policy
Expenditures of the EU in 2000
Structural Funds 36,10 %
CAP 45,23 %
Monetary reserve 1,03 %
Common Policies 6,26 %
External actions 6,76 %
Administration 4,62 %
EU Budget 2009Chapter Target Paying Difference to the
2007-2013
1a Sustainable growth: competitiveness
11.762.497.000 11.060.385.024 9.503.000
1b Sustainable growth: cohesion 48.426.884.669 34.975.134.166 1.115.331
2 Natrural resources (agriculture and rural development)
56.121.437.011 52.583.314.070 3.517.562.989
3a Freedom, security and justice 863.925.000 617.440.000 8.075.000
3b Citizenship 650.963.000 680.660.000 37.000
4 The EU as a global partner 8.103.930.360 8.330.886.836 - 419.930.360
5 Administration 7.639.129.321 7.639.129.321 137.870.679
6 Compensation to Bulgaria and Romania
209.112.912 209.112.912 887.088
Reasons for CAP reforms
EU net agricultural importer > net exporter
Surpluses and increasing expenditure in 1970s & 80s
Changing needs and wants of society
Other roles of private and public sectors
WTO-negotiations and EU-enlargements
CAP policy areas today
CommonAgricultural Policy
(CAP)
Food Environmental function
Rural functionMultifunctional agriculture
1. Pillar:
- Market measures (sugar, wine, fruit & veg, etc.)- Direct payments (“decoupled“ from production)- Cross Compliance standards
2. Pillar:RuralDevelopmentPolicy
Modulation
The policy issues in a nutshell...The policy issues in a nutshell...
Direct payments
Adjusted SPS
GAEC
Markets
Price support/Quotas reform
Safety net ?
Rural development
Axis 1(structural
adjustment)
Axis 2(environment)
Axis 3(territory and
diversification)
Phase-out ? Revenue insurance ?
Phase-out ?
Income
Struct
ural
adju
stm
entPublic
goods
Future ?
CAP expenditure and CAP reform path
0
10
20
30
40
50
60
70
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
% GDPbillion €
0,0%
0,1%
0,2%
0,3%
0,4%
0,5%
0,6%
0,7%
Export subsidies Market support Direct aidsDecoupled payments Rural development % of EU GDP
EU-10 EU-12 EU-15 EU-25 EU-27
4. Current activities
Young farmers and the CAP reform
Who is the new CAP made for?
Young farmers and future CAP
CAP ++
food security, high quality food production, landscape and biodiversity conservation, animal welfare, development of rural areas,…
CAP – –
environmental problems, high expenditures, international trade aspects, complicated, bureaucratic system,…
Young farmers and future CAP
• to moderate the risks of producers and consumers (risk management, guarantee systems)
• Remuneration of public goods
• Simplification of CC
Young farmers and future CAP
EU-10: serious development and modernisation needs
- sustainment of the CAP first and second pillars - sustainment of the current co-financing ratio - area based payments rather than historical based ones
Pillar I: fair distribution, top-up Pillar II: maintenance of measures which serve the
improvement of competitiveness and structural changes
We want a CAP which…
• is financed in a sustainable way, • meets the international requirements,• is transparent and fair, • simplified,• respects the environmental, consumers’ and
farmers’ interests
Instead of a radical reform, a long-term, common interest-based programming is necessary.
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CEJA
A non-profit organisation which represents young farmers’ interests towards the EU
institutions• Defends and promotes the interests of YF to EU
stakeholders
• Inform YF on agricultural topics at the European level
• Knowledge exchange through seminars and conferences
• Establishing common positions to deliver to policymakers
• Lobbying in Brussels arena
History of CEJA
• Founded in Rome, Italy in 1958• Originally: 6 members of the EEC• Current: 28 member organisations and 1
observer member from 22 Member States• The voice of more than 1 million European
Young Farmers
73
28 member
organisations
from across
Europe
74
CAP towards 2020 must address renewal of generations
• Young Farmers prioritised with strong installation policy (Young Farmers Package)
• Reform of model of payments
• Targeting ‘active farmers’
• Public goods and environmental services
• Market measures and safety nets
• EU protein plan
Young Farmers Package
• Installation aid compulsory across EU
• Top up payment in Pillar 1
• Revised rate of co-financing 80/20% in Pillar 2
• Young farmers reserve fund
• Knowledge vouchers
• Early retirement schemes
• Educational exchange programmes
Source: Brian Fuller et al.:‘Greening’ the CAP
The „new way” of the CAPThe „new way” of the CAP
CAP post 2013 reform
78
2010 2011 2012 2013 2014
BE HU PL DK CY IE LT EL
18/11/2010 May 2011 late 2011 End 2012 01/01/2014
Communication Legislative proposals
CAP2020
EU Council
EU Commission
EU Parliament EP plenary vote of budget review
?
Agreement between Parliament and Council
Implementation
Would you start again?
Absolutely
Maybe
In no way
Thank you for your attention!
Contact:
AGRYA1138 Budapest, Váci út 134/C.
[email protected] tel./fax: +36 1 3200 429