Doc. 9812

21 May 2003

Agriculture and enlargement of the European Union

Report

Committee on the Environment, Agriculture and Local and Regional Affairs

Rapporteur: Mr Marcin Libicki, Poland, EDG

Summary

Agriculture plays an important role in the European Union acceding countries, especially from the social and environmental points of view. The Common Agricultural Policy (CAP) is currently undergoing reform (mid-term review) aiming particularly at adapting it to the consequences of enlargement. This report presents the situation in several acceding countries.

Agriculture still needs to be modernised in most of the acceding countries but this cannot be done without an appropriate rural development as, in those countries, the rural population represents a greater share of the total population. A proactive policy is needed, aiming at creating sustainable economic activities, especially by reinforcing the multifunctionality of agriculture.

The CAP reform should allow European Union agriculture to evolve, to become more rational, and to promote sustainable economic and social development. This report therefore recommends to the European Union in particular to preserve the fundamental principles of the CAP, such as equal competition in the single market or the principle of financial solidarity.

I.       Draft resolution

1.       The Parliamentary Assembly has already had the occasion in the past to discuss some of the problems facing farmers in the countries of central and eastern Europe, particularly with regard to structural reforms and the transition process in those countries' agricultural sectors.

2.       Farming in the acceding countries generally plays a far greater role than in the European Union and remains a sector of vital importance for them in both social and environmental terms. Agriculture was accordingly a key issue in the accession negotiations, with both a significant impact on the economies of a number of acceding countries and implications for the farming sectors of the existing European Union member states.

3.       The Assembly notes that the conclusions of the Copenhagen European Summit, adopted on 13 December 2002, which define the conditions for integrating the acceding States' farming sectors in the European Union, are perceived by rural communities in a number of those countries as penalising their agricultural and rural development, especially as far as direct payments and production quotas are concerned.

4.       The Assembly considers that the European Union's most recent proposals for rural areas in the future European Union member states fail to afford sufficient guarantees of sustainable growth that would enable these states to modernise their farming sectors and develop new, non-agricultural activities in rural areas, while respecting the environment and biodiversity. The Common Agricultural Policy (CAP) of the European Union is still confronted with a fundamental contradiction between supporting agricultural production and repairing the damage it causes to the countryside, as well as with the difficulty in defining the real role of rural inhabitants: farmers or park-keepers for the European Union.

5.       It further considers that to establish an effective, sustainable development policy in the acceding countries' rural areas while preserving their extensive, multi-functional agriculture, account must be taken of the low purchasing power of those countries' rural populations and their inexperience in making use of European Union funds.

6.       The Assembly believes that the European agricultural model must be strengthened in the context of reform of the CAP. It is important that changes to the CAP do not undermine its fundamental principles, in particular the principle of equal competition in the single market (inter alia by avoiding discrimination vis-à-vis the future member states' farmers after accession) and the principle of financial solidarity (ruling out the possibility of a renationalisation of CAP financing).

7.       The Assembly consequently recommends that the European Union:

i. review the CAP so as to simplify it and make it more transparent and accessible for rural populations throughout the European Union;

ii. continue to support rural development and sustainable agriculture in the enlarged European Union, taking account of the economic, social and environmental implications;

iii. ensure that introduction of the CAP does not lead to worsening of the rural environment in the acceding countries, and preserves the close-to-nature values of their agriculture;

iv. amend its proposals on modulation and degressivity of direct payments, providing for a substantial increase in amounts allocated to CAP second-pillar measures;

v. take into account criteria such as farm size, the degree of intensification of farming and standards of living when determining the eco-conditionality of direct payments;

vi. ensure that the phased-in direct payments to the future member states reach the same level as those granted throughout the enlarged Union as soon as possible;

vii. ensure that direct payments do not distort trade but have the converse effect of making the farming sector more receptive to market signals.

II.       Explanatory memorandum by Mr Libicki

      4.       Other countries:

      Turkey ………………………………………………………………………………………9

1.       Introduction

1.       Agriculture plays an important role in most of the countries that will become member states of the European Union in the very near future. Although its share in the contribution to GDP varies from one country to another, agriculture is socially and environmentally a sector of vital importance for all the future member states. Its impact on national and European politics cannot therefore be underestimated.

2.       The next enlargement of the European Union in 2004 will be a considerable challenge for both future member states and the current European Union. It will also have a major impact on future accession negotiations and membership of those countries that will enter the European Union after 2004.

3.       The Common Agricultural Policy is currently undergoing reform in the framework of the mid-term review decided during the Berlin European Summit of 1999 and launched by the European Commission in July 2002. Among other major objectives, such as ensuring the competitiveness of European Union agriculture, allowing a satisfactory agreement in World Trade Organisation negotiations and giving a response to European Union citizens’ expectations, this reform aims at adapting the CAP to its post-enlargement shape.

4.       The purpose of the present report is to stress the importance of major characteristics and challenges in the future member states that need to be addressed by the Common Agricultural Policy. Its coverage is not comprehensive. It should be noted that those countries not mentioned have also their own specificities and problems that have to be coped with.

2.       Main problems

5.       In terms of share of surface area, GDP contribution and above all employment, agriculture plays a greater role in most of the future member states than in the current European Union. For example in the year 2000 agriculture in the central and east European countries (CEECs) produced 4.6% of their GDP, compared to 2% in the EU-15. Employment in agriculture is also much higher: 21% of the active work force compared to 4.3%.

6.       The simultaneous socio-economic reforms that have been carried out since the beginning of the 1990s in several fields of CEECs economies did not allow a satisfactory restructuring of their agricultural sector. Market instabilities, lack of budgetary resources and inconsistent rural policy instruments are among the reasons why agriculture is and will still be a major socio-economic challenge for the next decades.

7.       The perspective of European Union accession has been and still is an unquestioned motivation for carrying out in future member states several restructuring processes in the fields of law, institution building, branch restructuring and food quality. These efforts have been assessed in several European Commission Regular Reports. Since the beginning of the legislative screening process until the very moment of accession to the European Union, applicant countries regularly have to show improvement in their way to full compliance with the European Union acquis communautaire.

8.       Moreover, the Copenhagen agreement of December 2002 included in the Accession Treaty covering all 10 acceding countries a three-year, non-reciprocal safeguard clause. It is stated that in case “a new member state has failed to implement commitments undertaken in the context of the accession negotiations, causing a serious breach of the functioning of the internal market” safeguard measures may be invoked against them.

9.       However, the scale of needed modernisation investments and structural reforms in future member states’ agriculture has not been satisfactorily assessed by the European Union. Although a majority of European Union funds will be devoted to structural expenditures in future member states, these funds remain the most difficult ones to make use of. In other words, even though the European Union has repeatedly stressed that the enlargement of the European Union should not hinder necessary structural reforms in rural areas, the instruments currently proposed by the Common Agricultural Policy do not reflect that. The SAPARD programme, which mainly aims at restructuring rural industry and infrastructure in the long term, has shown how difficult this can be.

10.       In most of future member states, farming undoubtedly needs to be modernised. New techniques and machinery, more training, and a more suitable arable structure are well-known needs for which the CAP has long-existing instruments. Yet it should not be forgotten that the farming sector and rural development are closely linked, as was stressed in the framework of Agenda 2000. A sustainable agriculture will hardly be achieved without a living countryside, and conversely no rural area can be developed harmoniously without agriculture.

11.       On the top of that, citizens’ expectations in both current and future member states have evolved and increasingly focus on food quality, vitality of the countryside, product diversity and diversity of the natural and cultural heritage. A higher percentage of rural populations and their relatively younger age in future member states are important assets that need a proactive policy to create parallel sustainable economic activities alongside the future changes in the agricultural sector. This means that multifunctionality of agriculture needs to be reinforced in the framework of the Common Agricultural Policy in the light of the challenges that will follow the European Union enlargement.

12.       The sole and complete implementation of the European Union acquis communautaire is therefore not a viable solution. Firstly, the simplification of European Union agricultural acquis needs to be seriously addressed during the CAP reform so as to maximise the number of stakeholders that will understand and make good use of European Union instruments. Secondly, since the average level of wealth per inhabitant in future member states will be significantly lower than in the EU-15, there is a risk that both at the central and local level the national cofinancing funds needed to carry out the investments will not be available.

13.       Other shortcomings might also appear as a consequence of excessive intensification of production linked to modernisation, industry concentration and economic stagnation of medium and small-sized farms. As an example, the use of pesticides and nutrients is generally lower in future member states but it could increase very rapidly after accession. Not using them and eventually shifting to ecological production would entail direct costs and investments that need to be refunded. These and other similar public goods will only become a reality if rural development measures, generally called “second pillar measures” are financially strengthened.

14.       The Common Agricultural Policy reform is the occasion to adapt European Union agriculture to face the challenges brought by enlargement and deal especially with larger rural societies. It also offers a unique possibility to rationalise it and to meet sustainable economic and social goals in the whole, enlarged European Union.

3.       Acceding countries

Cyprus

15.       Traditionally agriculture was an important sector of the Cyprus economy with a contribution to GDP of between 17% and 23%. More importantly, in the period following independence in 1960, it accounted for between 33% and 45% of gainful employment. The percentage of domestic exports accounted for by raw agricultural exports and grew from about 12% in 1960 to over 50% in 1973, while an additional 10% to 15% represented the contribution of processed industrial products of agricultural origin to domestic exports.

16.       For the last three decades however, the contribution of the agricultural sector to GDP followed a declining trend. Consequently, the Government initiated aggressive policies and generous incentives to farmers, which however, did not hold back this declining trend. Amongst the primary reasons for this decline were the escalated growth of other sectors of economy, like tourism, severe water shortages, excessive land fragmentation, prevalence of small-holdings and competition from other sectors of the economy for land and labour. As a result, in 2001, the contribution of agriculture to GDP gradually fell to a mere 3.5%, while gainful employment fell to 9.2%.

17.       Despite these problems, agriculture today continues to be significant for the Cyprus economy. It provides employment to a relatively significant percentage of the population. It also helps maintain a sizeable proportion of the population in the rural areas. There are no food shortages, the island is self-sufficient and continues to earn an important sum of foreign exchange through exports.

18.       Cyprus accepts and has the capacity to implement the key principles and rules of the CAP. It has repeatedly stated that by the time of accession it will be in a position to implement the acquis in the fields of agriculture, even if, given the small size of the Cypriot agricultural sector, Cyprus’s accession should not have any major impact on the Community markets. Nonetheless, in a number of fields, relaxations and/or transitional periods are negotiated with the European Union in order to give the opportunity and allow progressive adaptation and smooth harmonisation to the new environment.

19.       In the Regular Report on Cyprus’s Progress Towards Accession (2002), it was stated that Cyprus has made considerable progress toward alignment with the European Union agricultural acquis. The Republic of Cyprus has been working consistently in order to transpose into national legislation all European Union acquis before the final accession date.

20.       Several particularities of the Cyprus agriculture dictated the proposal for discussion with the European Union of a number of specific issues and special requests that constitute divergence from the legislation in force of the European Union.

21.       In the very near future, Cyprus will submit a three-year Rural Development Plan for the period 2004-2006, the preparation of which is already underway. The implementation procedures for the measures envisaged in the Plan are set by the European Union and will be carried out and monitored by the Payments Organisation since, in the case of Cyprus, these measures will be co-financed by the European Union Guarantee Fund and Cyprus´ state budget.

Czech Republic

22.       During the accession negotiations the interest of the Czech Republic was to secure a competitive position for the Czech farmers and the consequential processing sector after the enlargement of the European Union. The previous was to be accompanied by the securing of macroeconomic stability, high environmental standards, safety of food, landscape-forming function of the agriculture, the overall development of the Czech countryside, and with regard to the consumers. It was a general task that was connected not only with an achievement of a sufficient level of direct payments, but also with the eventual operation of a number of factors, some of which are related not only to the respective negotiations with the European Union, but also to national preparation and adoption of steps on the national level.

23.       It cannot be expected that the Czech agriculture would be immediately and uniphasely integrated into the Common Agricultural Policy of the European Union. The Czech Republic itself is interested in a gradual integration in a number of areas, in which it demands several years of transitory periods. Thus the conditions for Czech farmers will be different after the enlargement from the conditions of the farmers from the present member countries of the European Union. However it was important that the negotiated conditions secured development possibilities for the Czech agriculture and its long-term competitive strength.

24.       Nevertheless, it appears from the communication with almost all the agrarian subjects in the Czech Republic that the most pressing problems of the contemporary Czech agriculture are related rather to the internal situation in the Czech Republic than to the negotiations on the Czech accession to the European Union. In this respect the key issue is the land as a primary production factor. Almost 100% of Czech farmers farm on mostly rented land and they are afraid that they might lose the land they don’t own after the Czech accession to the European Union.

25.       Therefore the Czech Republic has been struggling for such conditions that would in the pre-accession period facilitate the Czech farmers’ access to the land and that would ensure long-term stability on this issue. As a consequence the Czech Republic negotiated a transitional period of 7 years for the acquisition by foreigners of the real estate which forms the agricultural land fund and forests. However, the contemporary relevant legislation in the Czech Republic is not even now able to effectively prevent the land purchase from the side of foreign subject through third persons.

26. Another important factor is the general expectation of the rise in the land prices in the Czech Republic in relation to the Czech accession to the European Union which might result in speculative purchases. After necessary legal changes the acquisition of land would be bound to a number of conditions, such as an obligation to prove that a given subject has been farming on a land in the Czech Republic for several years and that he/she has a relevant qualification.

Estonia

27. Agriculture is also one of the main issues related to Estonia’s accession to the European Union. European Union membership will lead to a substantial change in the support and regulatory system within which Estonian agriculture is presently operating, as the principles of the CAP will also apply to the future member states.

28. Compared to the majority of other acceding countries and the European Union, Estonia’s population and agricultural area are relatively small. In 2000, the share of agriculture in its GDP and the share of agricultural employment were 5.7 and 7.0 respectively. Estonia is also a net importer of agricultural products. The main trading partner in agricultural products and processed food was the European Union, whose share was 41% in exports and 62% in imports. The negative trade balance mainly stemmed from trade with the European Union, and the principal explanation for that is the much higher proportion of processed products in imports than in exports. This reflects, on the one hand, the low effective competitive ability of Estonian agricultural products and the differences in policy regimes, on the other, with less support and protection in Estonia than in the European Union.

29. Estonia’s agricultural policy differs from the CAP of the European Union both by the types of measures used and their levels. One of the main distinctions between the two policies lies in their different objectives: Estonia has so far put more emphasis on liberalisation of the sector than on income support of its own producers. Its liberal policy has meant a very low support to producers and exports, and the absence of import tariffs. The average trade weighted tariff rate was in 2000 below 1%. Other policies connected to agriculture, such as rural and regional policies, are at initial stages.

30. Estonia considers that the decoupling of support from production of meat and crops will have a degressive effect on production because of lower productivity (the lower salary level will not always compensate that) which will effect Estonia more that the present member countries. It means that the influence on production will be different for present member countries than for the acceding countries. The incentives to produce beef will be very low and will have a great effect on meat production, but also grain and crop production will be affected. The decoupling of support especially to meat production will have a negative effect on the development of animal production but also on crop production. Subsequently the production volumes could decrease even more and the costs for preserving the traditional landscapes in the rural areas will rise significantly thus increasing the area of unused lands.

31. Estonia presents a proposal to have instead of one support system based only on hectare payment, two separate support systems, i.e. one for crop production and one for animal and fodder production. This will still keep the proposed principle of decoupling of subsidies.

32. Estonia welcomes the initiative of further discussions on the CAP reform proposals between the acceding countries and wishes to provide its contribution to the discussions. In the line with actual preparations for the accession Estonia is analysing the proposals and would hope to be actively involved in the relevant discussions.

Hungary

33.       In Hungary, agriculture has a basic role in the utilisation of our favourable ecological conditions and in the development of our rural areas. A decisive part of Hungary (96.1%) may be qualified as rural area on the basis of criteria used in the European Union, and nearly three quarters (73.6%) of the country’s total population lives there. The treatment of the economic, social and welfare problems of rural areas has always been a traditional part of agricultural policy in Hungary even through classical rural development measures.

34.       Hungary is one of the few countries in Europe, where the share of agricultural area is particularly high. Favourable geographical conditions make it possible to produce a wide range of agricultural commodities. Besides, there are several beneficial circumstances: workforce is skilled, the population has a traditional attachment to agricultural activities, research and education are well organised, and the official and state control is well developed.

35.       Due to all the favourable factors mentioned above, Hungarian agriculture is traditionally oriented to exportation, and is open to evolutions on the international level. The trade balance in favour of Hungary amounted to € 618 million compared to € 538 million in 2000.

36.       The adoption of the European multi-functional model of agriculture means that beyond the efficient agricultural production, Hungary devotes great care to the improvement of life conditions of the rural population, to the preservation of environment and to quality and healthy food production. All these efforts ensure that Hungarian agriculture can integrate into the European model of agriculture.

37       The eastward enlargement of the European Union, being of historical importance to each of the States concerned, is going to become a reality in a short time. In the establishment of the new European agricultural structure, Hungary believes that two aspect must be taken into account. On the one hand, it should not cause unacceptable social and political tensions in any part of Europe. On the other hand, the new production structure must be competitive on the world level, and its benefits must be enjoyed by each member state of the unified Europe.

Lithuania

38.       In the late 1980s, Lithuanian agricultural structures consisted of approximately 1 200 large collective farms designed to serve the needs of the former Soviet market. The agricultural sector played a significant role in Lithuania at that time, despite the fact that private ownership did not exist at all. Compared with the other Baltic States, Lithuania’s agricultural production was the most dependent on the economic developments and market in Russia. Before the restoration of independence, over 90% of Lithuania’s agricultural exports were directed to the former Soviet Union.

39       By May 2002, as a result of the property restitution process about 492 000 landowners appeared. Currently, there are approximately 250 000 agricultural producers (35 400 are registered in the Farmers Farm Register) and approximately 370 agricultural companies. The average size of the registered farms is 17.2 ha, while the average size of agricultural companies is 329 ha. Almost 56% of the registered farms were smaller than 10 ha, while just 1.8 are larger than 50 ha.

40.       Lithuania’s agricultural production in 2000 constituted only 75% of the level of 1990. The share of the agricultural production, which was 27.7% of GDP in 1990, decreased to 7.5% in 2000 and 6.9% in 2001. This figure amounts to approximately 20% after including industries and services related to agriculture.

41.       It should be noted that during both the restructuring process and the transition of agriculture from the planned to the market economy the price-cost squeeze effect became an obstacle to efficient structural changes. The production inputs at that time started to be obtained at higher world price levels, while prices of agricultural products witnessed a drastic fall. After the initial price-cost squeeze suffered in the early 1990s, a renewed price-cost squeeze has emerged in 1999-2000. This was caused by depressed commodity markets and was exacerbated by both the spillover effects of Russian financial crisis and the collapse of Russian market for agricultural products. The export share of agricultural products to the Commonwealth of Independent States dropped from 62.7% in 1996 to 26.6% in 2000. At the same time, Lithuanian trade regime faced a pressure and was influenced by the competition from the European Union subsidised foodstuff exports on Lithuania’s export markets.

42.       Radical changes in agricultural employment were observed during the period 1990-2001. The share of employees engaged in agriculture accounted for 18.5% of the total working population in 1990 and it increased to 22.9% in 1995. It is expected that the number of full-time employees in agriculture will drastically shrink by nearly 40% in 2004. This sudden decrease in agricultural employment would most likely not be offset by the new jobs and alternative sources of income that could be eventually created in rural areas. This will lead to a decrease of rural population and will affect traditional local communities and social structure in rural areas.

43.       Lithuania proposes that the above mentioned specific circumstances should be taken into account in order to reach the following goals:

-       allow to develop and establish the European model of agriculture, with respect to agri-environmental, food safety and quality requirements as well as good agricultural practices;

-       gradually changing the labour structure and creating new jobs in rural areas, as well as softening the social consequences

-       rational use of existing capacities and investments, modernisation of the food processing industry;

-       rational use of natural endowment and investments into land (drainage system, land infrastructure, etc).

Poland

44.       Although the share of the agricultural sector in creating GDP in Poland decreased to 3% compared to 2% in the European Union, 2.6 million people are still employed in agriculture, fishery and forestry, representing around 18% of the total number of employed in comparison to 4.3% in the European Union. However, 57% of Polish farms have an area of below 5 hectares and practically produce for their own use. Only 8,5% of farms in Poland have an area above 15 hectares, covering 36% of farmland and being mainly involved in commodity production. 77.6% of peasant holdings in Poland represent a traditional mixed type of agricultural production, which combines plant production and breeding of pigs and milk cattle in a small scale. Intensification of farms and modernisation of production were stopped because of economic stagnation as well as lack of possibilities to find a job outside agriculture.

45.       Unemployment and excess of labour in agricultural areas are one of the main problems of Polish rural areas. Current estimates show that the overall number of unemployed people in rural areas (including the unofficial unemployed) is close to 2 million. The majority of them does not have agricultural land, is low-educated and has difficulties in adapting to the new social and economical reality Poland is going through. To this vast category of people one should add regularly the younger generation that enters the labour market, which is not fully compensated by a proportional number of older employees leaving to retirement.

46.       The SAPARD programme, aiming at preparing Polish farms, processing plants as well as central and local administration to their functioning within the Common Agricultural Policy, is not well perceived among Polish farmers and has currently little success in key areas like farm investments or industry restructuring. The reasons for this are the too complicated procedures to build up the request for financial support and the necessary financial means the farmer needs in order to carry out the investment and only after request the partial reimbursement. Undoubtedly some real benefits will result form SAPARD implementation during the pre-accession period, especially in the field of local administration. Yet, the way of allocating European Union funds to rural development measures should far better take into consideration the financial situation of Polish rural areas and their differentiated needs depending on the agrarian structure and their diverse economic, social, and environmental.

47.       On 13 December 2002 during the Copenhagen European Summit Poland finished its accession negotiations with the European Union. Both the Integrated Administration and Control System (IACS) implementation costs and the aim to make a full use of European Union funds made Poland choose the simplified scheme of direct payments for its farmers. This decision carries several consequences. First of all, direct payments will be granted on the basis of the farmland and will not be linked to production, making of Poland a pioneer in terms of decoupling in Europe. Secondly, after accession to the European Union there will be a substantial economic improvement of the majority of rural inhabitants, and not only market-oriented farmers.

48.       The accession of Polish agriculture to the Common Agricultural Policy will have an important effect on the improvement of Polish rural areas’ situation. A risk exist though that European Union support schemes such as financial aid for smaller farms, agro-environment programmes and other instruments promoting bottom-up approach in rural areas, although essential for Poland, will not be sufficiently simplified and well explained to Polish rural inhabitants. Should this happen, European Union accession could well put in danger one of the main assets of Polish agriculture may well disappear, namely its substantial number of low-input farms, which can become in the future years the key for agricultural sustainable growth in Poland.

Slovenia

49.       The Commission’s proposal for reforming the Common Agricultural Policy in the framework of the mid-term review introduce new targets and focus on food safety, environment, consumers’ expectations and social justice. These have been fully adopted by Slovenia, which has incorporated them already with the adoption of the Development Strategy of Slovene Agriculture and the Slovenian Agricultural Policy Reform. Slovenia's decisions have been validated and have placed Slovenia in the same rank with the more advanced countries. New concepts must not be taken as an excuse for diverting attention from agriculture and reducing the financial means intended for agriculture. Problems will persist until such time as the European agriculture has become competitive. In order to be really multi-functional, Europe's agriculture and even more so its rural areas will need our full support.

50.       The concept of a single income payment is interesting, although perhaps more so after the elimination of support for the still protected products. It is economically more just, although relationships between products will sharpen. This would be the case also in Slovenia. It is our first estimate that support for milk and sugar beet would further increase. It would decrease, however, for arable crops and partially for beef.

51.       Concerning dynamic modulation, Slovenia will be largely excluded from these modifications (reduction of support). Slovenia welcomes the fact that finally small farmers have been given more attention, as they are to a larger extent than big farmers entitled to support.

52.       Rural development is welcome in Slovenia. New measures such as food safety, traceability are interesting. After the modifications, the share of rural development will be smaller than is currently the case in Slovenia. This also testifies to the prudent manner of introducing changes, which certainly will not be as significant as could be presumed from the media coverage.

53.       To conclude with. it is necessary to adopt a Common Agricultural Policy, which would not be made to measure of a few Member States. It should be in the common interest of Europe to create a more efficient policy. The loss of several million euros and certain benefits to large producers, who will remain the largest recipients of funds, are not the reasons why such an important goal as the re-integration of Europe should be sacrificed. We believe that partial interests will not prevail and that Europe and its agriculture will be stronger as a result. Slovenia has been and remains in favour of CAP changes, which will to a greater degree, heed the interests of all farmers and all citizens. Besides, Doha Development Agenda can not be respected without the CAP reform, with such issues as export refunds and direct payments to be subject of further revision.

4.       Other countries

Turkey:

54.       Agriculture has a great importance in the Turkish economy since 35% of its population is employed in this sector; it makes an important contribution to GNP and meets the raw material requirement of the industrial sector. When we compare the European Union agriculture with the Turkish one, we see significant differences in the fields of productivity, sizes of enterprises in the fields of productivity, sizes of enterprises, organisation of producers, technology usage, animal health and phytosanitary conditions. Therefore, agricultural sector will be the hardest and the most problematic area to be harmonised with the Common Agricultural Policy of the European Union.

55.       One of the committees that will manage the relations between Turkey and the European Union is the “Agricultural and Fisheries Sub-Committee” which carries on necessary studies for the implementation of the national programme for the harmonisation with the Common Agricultural policy. Besides this, a reform and restructuring programme has been prepared both for a great challenge in the Turkish agriculture and to harmonise Turkish agricultural policy with the CAP. This programme contains:

- Direct support system has been initiated and continuing in co-operation with the World Bank. The activities have been continuing for “Farmers Registration System” as well.

- A draft law on Agricultural Producers Union will be enacted by the Parliament soon.

- One of the most substantial problems in Turkish agricultural sector is the small sized and fragmented agricultural holdings. Changes have been realised in the Heritage Law in order to optimise these holdings. Besides, activities for land consolidation are in progress.

- A project for “alternative crops” such as tobacco, hazelnut and sugar beet has been prepared in order to prevent the surplus of supply in production and to avoid unevaluated stocks as well as to increase the production of the imported commodities.

- Draft Agricultural Insurance Law has been prepared, which will protect farmers from natural calamities such as draught, frost, hail and fire.

- Moreover, a new “Soil Law” has been prepared aiming to prevent the wrong and out of target utilisation of the agricultural land.

* * *

Reporting committee: Committee on the Environment, Agriculture and Local and Regional Affairs

Reference to committee: Doc. 9663 and Reference No. 2797 of 31 March 2003.

Draft resolution adopted by the committee (in conformity with Rule 46.4 of the Rules of Procedure) on 29 April 2003

Members of the committee: Mr Martinez Casañ (Chairman) (Alternate : Fernandez Aguilar), MM. Meale, Gubert, Schmied (Vice-Chairmen), MM. Açikgöz, Agius, Mrs Agudo, MM. Akselsen, Andov, Annemans, Ates, Blaauw, Çavusoglu, Sir Sydney Chapman, Mr Churkin, Mrs Ciemniak, MM. Cosarciuc, Deittert, Delattre, Dokle, Duka-Zolyomi, Ekes, Etherington, Frunda, Giovanelli, Gonzalez de Txabarri, Götz, Graas, Grabowski (Alternate : Giertych), Grachev, Grissemann, Mrs Hajiyeva, Mr Haraldsson, Ms Herczog, MM. Hladiy, Högmark, Ilascu (Alternate : Mocioi), Mrs Jäger, M. Juric, Mrs Kanelli, Mr Kharitonov, Lord Kilclooney (Alternate : Mr O’Hara), MM. Klympush, Lachat, Libicki, van der Linden, Lobkowicz, Loncle, Manukyan, Masseret, Mauro (Alternate : Nessa), Mrs Mesquita, MM. Meyer, Mincevic, Nazaré Pereira, Mrs Ohlsson, MM. Oliverio (Alternate : Crema), Podeschi, Podobnik, Popov (Alternate : Sudarenkov), Rafaj, Salaridze, Ms Schicker, MM. Sfyriou, Sizopoulos, Steenblock, Ms Støjberg, Mr Stoica, Ms Stoyanova, MM. Tabajdi, Timmermans, Tiuri, Truu, Vakilov, Velikov, Wright, Zhevago,

N.B. The names of those members present at the meeting are printed in italics.

Secretariat to the committee: Mrs Cagnolati, Mr Sixto, Mr Torcatoriu and Ms Odrats.