Verbatim report of proceedings

Wednesday, 15 February 2006 - Strasbourg

13. Risk and crisis management in agriculture (debate)

  President. The next item is the report by Mr Graefe zu Baringdorf, on behalf of the Committee on Agriculture and Rural Development, on risk and crisis management in the agricultural sector [2005/2053(INI)] (A6-0014/2006).

  Mariann Fischer Boel, Member of the Commission. Mr President, I wish to begin by thanking the European Parliament, especially the rapporteur, Mr Graefe zu Baringdorf, and the members of the Committee on Agriculture and Rural Development, for their work on risk and crisis management and the very useful resolution and report. I will, of course, study your position and the different proposals in the report carefully.

My intention with the communication on risk and crisis management presented in March 2005 was to launch a comprehensive debate. I think that objective has been successfully achieved, in the Council, in the European Economic and Social Committee and now in the European Parliament. Your contribution will be essential for the progress of our work.

I therefore take note of your position regarding the three options for new rural development measures to support risk and crisis management. I welcome your encouragement to continue the work on the subject. I note your particular interest in option 2, which concerns mutual funds.

In the shorter term, I share your views concerning the fruit and vegetables sector and I have already said to the Council that we are going to examine the subject of risk and crisis management in the context of the future reform of the common organisation of the market in fruit and vegetables.

As you have noticed, however, the subject of risk and crisis management is really very complex, notably because the purpose is to adapt to a changing international trade context in respect of WTO rules. We therefore need to study this area further.

As regards the analytical background, at the beginning of 2005 we launched a research project on risk and crisis management instruments for EU agriculture. The work is well advanced and we should have some intermediate results in the coming year.

We are also preparing a study on the agricultural insurance systems in the various Member States and the technical issue of insurance systems in agriculture. This was specifically requested by the European Parliament. It is essential to describe and analyse what is done at Member State level before eventually deciding whether we need to set up permanent European instruments for insurance possibilities. We will then have a good basis for discussion during the coming year, which will facilitate the detailed political debate that is essential before we agree on additional measures. I am quite sure that, after listening to your comments, I will be able to respond directly to some of the questions raised.

  Friedrich-Wilhelm Graefe zu Baringdorf (Verts/ALE), rapporteur. – (DE) Mr President, Commissioner, the farming sector is dependent on many factors, not all of which the commercial sector regards as risks at all, and it is for that reason that the common agricultural policy has always protected it from certain risks, and, in the past, intervention in the form of guaranteed prices and guaranteed sales for important products provided specific farms with income guarantees. However, this resulted in a distribution of aid that very much favoured larger holdings to the detriment of the smaller ones. In the end, the distribution of payments was such that 80% of the money was going to 20% of the farmers.

These also resulted in partial surpluses being generated in a region of the European Union that is one of the biggest importers of foodstuffs in the world, because this state intervention had given rise to a sort of vacuum effect. These surpluses were then sold on the world market for billions in a tax-subsidised dumping operation, the consequence of which was that in some countries, mainly in the developing world, regional markets were destroyed.

Following the reforms, we have therefore attempted to at least start to put an end to this, but the money is still being distributed in the same ratio. We have a situation where highly rationalised businesses get EUR 120 000 per employee per year, while the majority of farmers get less than a tenth of that.

Now that we are considering whether we need to initiate a new system of crisis and risk management, we need to correct the distribution of State aid in favour of rural farms. This is nothing to do with large and small holdings – it is to do with the production method, in other words with where workers are actually employed.

We – and I as the rapporteur – take the view that, of the options you have listed here, we obviously need to look into the first option of insurance against natural disasters; this already occurs, but just needs to be put on a more systematic basis.

Option 2, regarding whether there is or should be a mutual fund, is an interesting consideration, but, as I said earlier, it should be made clear here too that the payments that farmers have to make to these funds must take account both of the scale of production and of the farmer's ability to pay, so that the new system does not end up once again in inequalities to the detriment of rural farming.

It is also important for farmers themselves to be involved in this insurance, in other words for there to be cofinancing from the farms, so that we do not end up with state protection, replacing one system with the other, that is to say bringing the system we have just abolished back to life under a different name. Normal risks must largely be allowed for and managed by farmers and farm managers themselves on the basis of their business knowledge.

Our main criticisms are reserved for Option 3. This relates to providing basic coverage against income crises. Natural disasters and unpredictable risks obviously always result in loss of income, in other words to economic strain. However, we must not run the risk of this coverage against income crises taking us back to the old system of guaranteed incomes via state intervention. It will be clear from our report just how careful we have been about this.

Nevertheless, some groups have concentrated on this area in their amendments, and have at least said that we should look into the possibility of supporting these measures and the connection with the WTO. To that we say that the reforms dismantled the old-style intervention system, and it must not be replaced.

  Gklavakis, on behalf of the PPE-DE Group. – (EL) Mr President, everyone knows that agricultural production is vulnerable to climate conditions. The previous speaker told us so and there is no need for us to repeat ourselves. Everyone also knows that, under the old CAP, there was far more protectionism towards Greek farming than there is under the present common agricultural policy and I greatly fear that the next common agricultural policy will be even worse.

We consider that the insurance system, however it works, will have its pros and cons, but we consider that the participation of the European Union in financing is very, very small and I think that we should be more generous on this point. In addition, I would like to say that particular importance needs to be attached to fruits, which are sensitive products and which have greater need for protection.

Similarly, we have seen over recent days a large rise in fuel prices which, for numerous agricultural crops, will result in a ruinous increase in costs. Additional measures which we need to see to attentively and carefully are that, in times of crisis, storage and processing and promotion need to be stepped up, as do voluntary cutbacks in production. We consider it particularly important for the entire system to be subject to speedy intervention.

To close, I have to say that, in the particularly globalised environment to which we have brought our agriculture, if we do not support it, it will be ruined and we shall have no European agriculture.

  Bogdan Golik, on behalf of the PSE Group. – (PL) Mr President, the report by Mr Graefe zu Baringdorf discussed here today identifies clearly and concisely the shortcomings and flaws of the risk and crisis management system in European agriculture.

For many years, the common agricultural policy protected farming and farmers in Europe. While recent reform has made farmers more market-oriented, it has also forced them to shoulder the responsibility for risk management. Subsidised European agriculture removed the mechanisms for preventing and insuring against risk. Few farmers can plan for crisis situations today and unfortunately few of them can afford insurance in a climate of free competition and low profits. Non-agricultural undertakings, traders and insurance companies have created a whole portfolio of insurances, to cover even such sophisticated situations as exchange rate fluctuations or income loss due to political circumstances in the case of foreign investments.

Both the Commission’s communication and the rapporteur’s excellent report show just how far behind this issue has fallen in the European Union. A farmer-entrepreneur running a farm on the free market after the reform and in the face of enormous competition is risking everything, without having even the insurance fallback that is available to the investor or trader. A large or highly productive farm will be in a position to cover the cost of insurance and the cost of risk, but millions of small and family-run farms in Europe cannot afford to pay for insurance to cover their own homes, let alone their production. If a crisis arises, these farmers have to rely on help from their neighbours or on State aid.

What European farmer is going to take out insurance against income loss in the event of borders being closed by Russia, against reform of the market in sugar and the need to destroy plantings, or against the dumping price of fruit and vegetables imported from China? Who will comprehensively insure a farmer-investor and the risk of financing investments, the risk of fluctuations in the price of produce, the price of fertilisers, feeds and fuel, the risk of global climate change, soil degradation, drought, hurricanes, flooding and storms? Who will provide insurance to cover imbalances in supply and demand, epidemic diseases and genetically modified food?

As a sector of the economy, agriculture requires a special legal and organisational framework for its insurance needs. Agriculture is too fragmented and weak as a sector to set up its own insurance schemes. Even the richest countries of the European Union are not in a position to take on this task on their own. This means that a common and universal insurance system must be set up to include all Member States and all farmers as part of a reinsurance scheme.

The 1% from modulation proposed by the Commission will not be sufficient for a reinsurance scheme, let alone setting up a system of prevention and indemnification.

Spain has the most effective insurance system currently in place in Europe. I therefore call on the Commission to universally apply this system as rapidly as possible and to adopt it as a standard model in the European Union. Only then should discussions be opened with major insurance companies and national governments about an appropriate system that would be universal and compulsory, solvent and low in cost, fair and based on the principle of subsidiarity.

Finally, I would like to thank the rapporteur for his excellent report and for rightly mentioning the exclusion of the new Member States from the 1% modulation, and proposing an alternative funding scheme for these countries to the Commission.

  Niels Busk, on behalf of the ALDE Group. – (DA) Mr President, I should like to thank the rapporteur, Mr Graefe zu Baringsdorf, for his work on the report on risk and crisis management in agriculture. We live at a time when a lot of damage is caused as a result of natural disasters ranging from major floods to drought and fires. Also fresh in our memories is the huge amount of expenditure incurred by Europe as a result of infectious diseases in animals and efforts to eradicate and combat these. We wish to continue with the liberalisation of the EU’s agricultural policy in the current WTO negotiations. The CAP reform was a large and important step in that direction. I do not, however, think that the Commission has shown a sufficient sense of urgency about coming up with proposals for eliminating or reducing risks and for averting crises and outbreaks of disease that we could well do without.

Who is to cover the losses due to future outbreaks of disease? How is the market to be regulated and managed, especially in those areas of the EU that are not affected by disease but that are nonetheless hit by no longer being able as easily to export foodstuffs? Why has the Commission not put proposals on the table concerning the provision of insurance cover by private and mutual insurance companies – something requested by the European Parliament as long as two years ago?

The many different insurance facilities that exist are used in agriculture and by the food industry on a daily basis. This area must therefore be investigated very quickly with a view to devising cover for the large losses that the agricultural budget will not in future be able to cover. Finally, I should like to say very clearly that we do not want to go back to the State aid or disguised State aid of earlier times.

  Margrete Auken, on behalf of the Verts/ALE Group. – (DA) Mr President, Parliament’s Committee on Agriculture has a major credibility problem. The committee takes decisions that often have only one purpose, namely to grab more money for itself and its friends. However, all of us in this Chamber share responsibility for the European Parliament’s plenary again and again adopting the resolutions presented to us by the Committee on Agriculture. Today, it is crisis management and insurance schemes that are at issue. The subject is in itself a useful one to debate, and the report contains a lot that is constructive. However, it also contains some bad things, and it is those on which I want to concentrate on this occasion.

Firstly, crisis management and insurance schemes should be funded by the industry itself. I have been told that the spokesman for the Group of the Greens/European Free Alliance fought hard for this to happen, but that he was in a minority in the committee. What is more, crisis management and insurance schemes should have to do with genuine crises. I find it commendable that farmers everywhere in Europe should show solidarity with each other if their farms are hit by serious diseases such as BSE, foot and mouth disease or avian influenza. When, however, the Committee on Agriculture defines trade liberalisation in the WTO as a crisis situation, that is not a sign of healthy prioritisation. It is a sign of the Committee on Agriculture’s patent unaccountability.

I very much hope that the Group of the Alliance of Liberals and Democrats for Europe has requested a split vote so that we might have this notion removed from the resolution. Finally, I expect support for the request by the Group of the Greens/European Free Alliance for a split vote with a view to removing the committee’s demand for aid for offsetting high oil prices. That is emphatically the worst thing in the report. It is depressing to see how often Members of the European Parliament, who otherwise work to bring about a green Europe and to forestall disaster where the climate is concerned, go no way towards discovering what goes on in the Committee on Agriculture.

It is nothing less than appalling that the proposal concerning aid in connection with oil can reach plenary at all. This is something that the groups’ spokesmen on environmental and climate issues should have nipped in the bud. What, however, is, in the end, required to get the Committee on Agriculture to act in a less self-centred way? I do not, unfortunately, believe that anything will happen until the European Parliament obtains real influence over agricultural policy and until we get rather more people with farther-reaching visions of Europe in the committee.

  Diamanto Manolakou, on behalf of the GUE/NGL Group. – (EL) Mr President, risk and crisis management measures need to be introduced in the agricultural sector. This need relates not only to protection from natural risks but also from the breakdown and gradual abolition, through the review of the CAP and WTO agreements, of mechanisms which, even if not terribly satisfactory, do protect farmers' incomes.

Similarly, farmers also need protection both from the introduction of new technologies and, more importantly, from genetically modified organisms, which harbour unpredictable negative repercussions on the environment, public health and farmers' income, as the rapporteur notes in his report. Nonetheless, all the proposed scenarios are predicated on the fact that they will not encumber the Community budget and that the appropriations needed will be deducted from appropriations for differentiation. In fact, private insurance companies are considered to be a basic mechanism for implementing the proposed measures. However, we all know that, even in such cases, some companies do not insure certain categories of risks because they are unprofitable. In addition, the report accepts the incentives set by the Commission, relating mainly to reinsurance, which needs to be free or with reduced reinsurance premiums by national agencies or by introducing reinsurance premium subsidies, in order to safeguard the companies' profitability. I do not agree that natural and commercial disasters, especially for small- and medium-sized farms, should generate profits for insurance capital.

At the same time, it is accepted that compensation should not be paid for losses of less than 30% of the average over the preceding three years. In other words, the following injustice is being promoted: small- and medium-sized farms will sustain losses from natural disasters and commercial crises, in the best case scenario of at least 30%, while insurance capital's profitability will be guaranteed.

Even if we accept that measures need to be introduced which will cover all the losses caused to farmers' income by various natural disasters and commercial crises, we cannot, however, agree with these proposals, which create an additional burden on small- and medium-sized farms; instead of improving their income, in our opinion they reduce it.

  Jeffrey Titford, on behalf of the IND/DEM Group. – Mr President, it seems to me that the biggest risk that farmers face every year is that agriculture, and ultimately their livelihoods, are controlled by the European Union. The debacle that Britain suffered during the foot-and-mouth outbreak in 2001, is eloquent testimony to what happens when crises are managed by the EU. It is not widely known that the strategy for dealing with that disaster was managed by the then Commissioner for Agriculture, and what a complete pig’s breakfast he made of that. Millions of healthy animals were needlessly slaughtered in an orgy of killing and burning that shocked the world. Furthermore, the roots of the disaster lay with the EU and its destruction of local slaughterhouses through excessive regulation.

I am gratified to see that the report acknowledges that the CAP has ‘encouraged the development of non-sustainable production methods heavily dependent on water and energy’. But, judging by this weekend’s newspaper revelations that the EU has a surplus of four billion bottles of wine, costing the taxpayers a billion a year, not much has been learnt in that area.

I would ask Members to reject this report, until a study has been made of the practical implications and the cost of implementing its recommendations. It seems to me that trying to protect farmers against everything, including weather aberrations such as storms, as this report indicates, will be extremely expensive and possibly fruitless in the end, because who can predict the unpredictable?

  Jan Tadeusz Masiel (NI). – (PL) Mr President, I congratulate the rapporteur on tackling the very important question of managing risk and crises in the agricultural sector, and taking the situation of the new Member States into account too.

I also welcome the Commission’s concern for farmers having to face up to the crises caused by the liberalisation of agricultural markets, export restrictions and animal diseases, not to mention natural disasters.

I would like to take this opportunity to say, Commissioner, that fuel payments and biofuel production are of particular interest to Polish farmers. Biofuel production will boost income and make farmers feel more secure. It will also lessen day—to-day anxiety and worry caused by the fluctuating price of pigmeat for example.

  Markus Pieper (PPE-DE). – (DE) Mr President, market regulation and price support used to do quite a good job of protecting the agricultural sector from risks. Agricultural reform has now turned much of that over to the market, and in principle that is quite right too. However, farming is in a unique situation: even though farmers have to cope with climate change, livestock epidemics, natural disasters and global sectoral crises, much of which they cannot even predict, let alone plan for economically, they still need planning security. More market thus also means a need for more private-sector involvement in the management of agricultural risks and crises.

The report provides some very positive proposals – an astonishing number coming from a Green rapporteur. Despite some imbalances, it is a very welcome sight coming from that part of the political spectrum. It is primarily producers, associations and private insurers who are called on to provide innovative risk management concepts throughout Europe. The European Union and the State must take a back seat. The public purse must be restricted to partial coverage for uninsurable risks such as natural disasters or massive livestock epidemics. That is why we have to design reinsurance systems, and the European Union must also provide an aid framework that allows both private solutions and public coverage for extreme risks.

However, we must bear in mind that we cannot insure against every conceivable eventuality. The world's climatic zones are shifting, and this has effects on the geography of farming that call, as a matter of urgency, for scientific investigation. Europe has a duty to encourage this. We will also end up having to look into resettlement measures. These are regions that are being affected by ever worsening and more frequent droughts or floods, so that farming there is simply no longer worth it. In this context we must also recognise the realities of additional risk insurance, and thus also provide aid for resettlement and structural change. That, too, is a political responsibility of the European Union!

  Katerina Batzeli (PSE). – (EL) Mr President, first I should like to thank the rapporteur, Mr Graefe zu Baringdorf, for his report, for the proposals which he has tabled and for accepting many of the proposals tabled by the political groups and, on the other hand, I wish to thank the Commission itself and Commissioner Fischer Boel for their balanced communication in this sector and for the alternative scenarios which they present, scenarios in which each Member State, depending on the structure of their insurance systems and the peculiarities of their agriculture, can find their own level.

However, I should like to say to Mrs Fischer Boel that you need to put far more pressure on the Council so that future Councils of Ministers follow an integrated policy in this sector and the Agriculture and Fisheries Council does not confine itself simply to a sectoral perception of management policy, such as for example, in the fruit sector, because, as far as the fruit sector is concerned, insurance policy funds will come from the sector itself and will have nothing to do with cofinancing or financing from the fluctuation mechanism.

As you all know, we are in what I believe is the most sensitive development of the common agricultural policy, a development which is being judged by global trade itself and by the corresponding European Union agreements. On the other hand, we have the financial framework which is being set at the negotiating table between the European Parliament, the Council and the Commission with the guillotine of the common agricultural policy review clause. Above all, however, what we have to hope for, as Parliament, is that there will be a full guarantee of farmers' incomes and of agricultural production in the European Union.

Within the framework of these objectives therefore, by 2013, the crisis management policy, with the creation of a security index for farmers' incomes, will be one of the basic priorities of the European Union and will need to identify with and be combined with our policy to strengthen the fluctuation mechanism.

I should like to stress, for the benefit of my honourable friends worried about competitiveness, that a great many of our international commercial competitors have applied the price security index even at the level of loss of income due to changes in commercial pricing policy, a policy covered by WTO agreements. European producers therefore need to fight with the same mechanisms and the same weapons in international trade.

Commissioner, I should just like to mention to you a combination, as it were, of measures which are needed: reinsurance, private insurance and state insurance. The management policy system – and here I disagree with the rapporteur – will not be the subject of state subsidies, because this will be the greatest distortion for future agriculture.

  Ilda Figueiredo (GUE/NGL). – (PT) Mr President, Commissioner, ladies and gentlemen, we are all aware that farming has become subject to increasingly serious risks and crises in recent years, caused by climate change and natural disasters such as flooding, drought and fires, and to the damage caused by animal diseases which are being spread more rapidly at international level.

Although the Commission has put forward a number of options for managing risks and crises, its proposals do not take account of the problems facing small and medium-sized holdings and family farming, which are under threat from an unfair common agricultural policy and from World Trade Organisation negotiations. The upshot of this is the destruction of thousands of small holdings, the strangulation of the rural world and the desertification of vast sections of the interior of countries such as Portugal, which is also reflected in the increased number of forest fires.

What is more, quite apart from urging the cofinancing of insurance premiums against natural disasters paid by farmers, the Commission is proposing to finance this from just 1% of funds from modulation, which is clearly inadequate. What is needed, as we have been proposing, is a public insurance scheme financed by the EU, with a view to creating a better policy framework for risk management and crisis prevention, which is crucial for family farming.

As the rapporteur points out, the Commission’s proposals do not take sufficient account of the level of risk and probability of crises. It is therefore crucial that the Commission carry out a more detailed assessment of the instruments and measures that could prevent collapses in prices, market crises, farmers’ income losses and all obstacles standing in the way of their continuing to farm.

I note, Commissioner, your willingness to take on board arguments put forward in this debate, and look forward to seeing this put into practice, both in terms of risk and crisis management in farming, and in the creation of a safety net in relation to the forthcoming reforms of common organisation of agricultural markets, in particular of wine, fruit and vegetables. What is also needed is to provide for the possibility of granting aid for farmers to purchase fuel when the price has increased sharply.

  Neil Parish (PPE-DE). – Mr President, I thank Mr Graefe zu Baringdorf for his report. It is good to see the Commissioner here this evening, because the Commission has put forward a flexible approach to crisis management in agriculture. Animal diseases and natural disasters are going to happen and we must find a flexible approach to these. The CAP reform is now moving towards offering help for farmers to help themselves. That really has to be the way forward.

If you take what happened with the foot-and-mouth disease in the UK, the huge sums of money that were needed to eradicate the disease could never have been funded by an insurance company on its own. We should perhaps look at a form of insurance with the Member State and the European Union as the insurer of last resort, so that they can actually step in when there are huge disasters.

Mr Graefe zu Baringdorf referred to young farmers in his report. There is a special case for a certain amount of extra help for those setting up business early on in their career, because they do not have the capital behind them and they need extra support.

If Mr Titford had still been in the Chamber, I would have liked to take him up on his comment that Commissioner Fischler and the European Commission were to blame for the mishandling of the foot-and-mouth crisis. Had he been part of the inquiry here in the European Parliament, he would have found that was not the case. I have to admit to you that the blame lay with the UK Government and a Prime Minister who was hell bent on calling a general election and wanted to get the disease under control. He had a huge contiguous cull of millions of animals that was completely unnecessary. We could have used vaccines, which were also ruled out. I would have liked to put Mr Titford right on that and other points.

  Luis Manuel Capoulas Santos (PSE). – (PT) Mr President, Commissioner, recent years and in particular the past year have provided eloquent examples of the variety of risks and crises facing Europe’s farmers. In 2005, at the same time as thousands of hectares of forest were being destroyed by fire, with the loss of human life, and when a number of parts of southern European were stricken by drought, a number of countries of Central Europe were afflicted by devastating floods. In both cases, the magnitude involved was without historical parallel.

What is more, animal diseases and the inexorable liberalisation of trade have particularly exposed farmers to fresh risks and uncertainties. The Commission’s initiative underpinning this report is therefore a welcome one. It falls short, however, of what is actually needed. I therefore share the rapporteur’s view in most of the points raised and suggestions made, with particular regard to agricultural insurance and mutual funds, although I regret the timidity – I have chosen this word with great care – of his approach towards coverage against income crises, particularly given that some of our main trading competitors have such safety measures at their disposal.

I also feel that this report is an important tool in a broader approach that the issue merits, not least as part of the ongoing debate on the solidarity fund, the forestry strategy that we will certainly discuss, along with the own-initiative reports on natural disasters being drawn up by various committees. I hope that Parliament will adopt coherent positions with regard to this range of instruments. This is the best contribution it can make towards the Union being in a position to provide adequate, urgently-needed protection for its farmers, firstly to prevent the occurrence of crises and risks, but also to rectify them if it proves impossible to prevent them.

  Jim Higgins (PPE-DE). – Mr President, the report on risk and crisis management in the agricultural sector is welcome and could not be more timely. There has been a radical shift in agricultural activity, brought about by the agricultural reforms of 2003, and the opening-up of markets as a result of the WTO. While benefits have undoubtedly flowed for farmers, there has been – as has been said repeatedly this evening – a greater and real increase in the risk factors. Under the new CAP, the risk and crisis measures that we had all become used to were dismantled and the onus on the protection, prevention and management of crises has shifted squarely onto the farmers’ shoulders.

Open markets and product mobility increase the possibility of the spread of disease. Climate change is happening very quickly, so that reorientation will be inevitable. The depletion of oil stocks means that fertilisers, pesticides and machinery will all be affected in due course and, by extension, agriculture will be affected and will have to adapt.

In Ireland, the nitrates directive, for example, is beginning to bite and having such serious consequences that the farming organisations have withdrawn from the government-sponsored social and economic partnership talks. Farming is in transition as never before. It is in transition because of a variety of factors and the transition will continue. Farming is confronted with more risks than ever before. Good farming practice and a stable and experienced farming population are the best guarantee for what Europe needs, which is a safe, secure and healthy food supply. Farming is a difficult life: long hours, hard work, high investment and many risks. In many cases it is a whole family transaction. It deserves the protection against risks proposed by the rapporteur in this report.

I commend the rapporteur and his report. I support him completely, particularly in relation to option 2, and I welcome the Commissioner’s comments this evening.

  Wiesław Stefan Kuc (PSE). – (PL) Mr President, I congratulate the rapporteur, Mr Graefe zu Baringdorf, for tackling the problem of risk and crisis management in the agricultural sector. This is an enormous task, given the significant number of issues that have to be dealt with. The latter range from limiting the impact of natural phenomena such as droughts, floods, fires and hail, through diseases and epidemics, to the risk of income loss resulting from falling demand for agricultural produce or rising prices, for example for fuel. Risk insurance, reinsurance and producer payments are just one aspect of reducing the risk of running the business we call agricultural production.

For us to really manage, or in other words to reduce, the risk involved in agricultural production, we need to manage that risk. This implies a different approach to the concentration of production, dispersal, reinstating the natural environment, introducing new methods and new technology such as biotechnology. A number of these actions have already been taken. Together, they will make it possible to eliminate adverse phenomena and reduce production risks.

  Friedrich-Wilhelm Graefe zu Baringdorf (Verts/ALE). – (DE) Mr President, it is always good to belong to one of the larger groups, because you get more time. Commissioner, in my first speech I placed the emphasis on not succumbing to the risk of relapse, and spoke of the social balance that must be involved in a new system of this type, but now I would also like to focus on preventative crisis management. All of the crises that have been mentioned here, including the fires, were, in part, caused by human beings and human action. Even the BSE crisis was not sent down from on high, but was caused by cows being fed to cows, completely contrary to any sense in good farming practice.

If we plant maize and eucalyptus in dry areas, we should not then be surprised when damage by fire and drought is the result. When we talk about liberalisation, on which one Member has expressed rather different ideas, we should not be surprised – if we look at it as an end rather than as a means – that many people go out of business and fall into major crises, including income crises. We must therefore ensure that proper arrangements are made, through the WTO, for qualified market access.

I would point out that many smallholdings and organic farms have created a higher value, high-quality market by keeping genetically modified organisms out. If we now botch coexistence, it will turn into a Trojan horse, and then these good, high-quality markets, including the wine market, will have gone. Then we will lurch into crises that we could have prevented, and insurance will be the last of the things we need to talk about.

However, Commissioner, I am also talking about the possibility of economic development in rural areas and the fact that, when it comes to the second pillar, we are now threatened with financial exhaustion. We should then not be surprised if many farmers who have entered these higher-value markets are prevented from pursuing this development by exhaustion and are on the point of getting out. General agricultural policy therefore also has to fulfil a preventative function.

I would also remind you that fossil fuels are going to run out in the not too distant future, and that we must prepare farmers for the need to convert to other energy sources and, perhaps, help them to benefit from them. We can operate crisis prevention in this context, too, and I would like these preventative considerations to play a role in the legislative proposal by the Commission – which is currently in the brainstorming phase this year.

To Mrs Batzeli I would say that, when I talked about management responsibility, I did not simply want to blame the crises on the incompetence of the farmers, but I did want agriculture to have an influence on policy in the way I have described, so that the crises do not arise in the first place, and so that in future farmers are guaranteed a decent income.

  Mariann Fischer Boel, Member of the Commission. Mr President, I wish to begin by thanking all those who have contributed to this debate. Many of the points mentioned in the report are covered by the ongoing studies that the Commission has initiated, for example, proposals 2, 5, 7, 19 and 23.

Regarding the safety-net provision – proposal 8 – the discussion in the Council has not produced a clear mandate for introducing a general safety clause in all COMs or for trying to finance this insurance out of the modulated money. However, I am ready to examine the introduction of targeted risk and crisis management provisions in other COMs and, as mentioned by Mr Gklavakis, in the fruit and vegetable sector, which we will also discuss here in Parliament at the end of this year.

I completely agree with your rapporteur, Mr Graefe zu Baringdorf, that basic coverage against income reduction is not a solution. It is quite clear that, if or when we face structural problems, they must be solved through policy changes. That is obvious and I am very happy about Mr Graefe zu Baringdorf’s clear support for it.

As a safety-net for income, I consider the CAP reform’s decoupled direct payment to the farmer to be essential.

I am positive about the content of proposals 18, 24 and 26.

I also take this opportunity to draw your attention to the review of the state aid guidelines adopted by the Commission on 8 February. The Commission proposes to include compensation for bad weather and animal and plant diseases in the present exemption regulation for state aid within the agricultural sector. This is hopefully a simplification. It would also speed up the implementation of state aid in such situations, so that we can react extremely quickly.

The Commission has looked into a number of options for encouraging the development of risk crisis management tools and providing an improved response in the event of a crisis. My intention for the communication was, firstly, to have a comprehensive orientation debate in the Council and here in Parliament before tabling any legislative proposal. The discussions we have had so far in the Council have not, as I said, produced a clear mandate to introduce a general safety clause. However, the Commission is ready to proceed further if there should at any stage be a clear mandate from the Council.

Since I consider crisis and risk management an important issue for the future as well, even in the situation of an absence of a clear mandate from the Council I am prepared to examine the introduction of a crisis management provision, as I said previously, on a case-by-case basis.

There was a question about the position of the new Member States. It is quite clear that the new Member States will not be excluded from risk management measures. As we have pointed out in the communication, we could envisage identifying a comparable envelope in rural development, just as we do for the old Member States – a clear signal to the ten new Member States.

With the political agreement on the CAP reform and the implementation that has now taken place in all the Member States, we want European farmers to try and seize the market opportunities. There is a strong responsibility for the farmer, but there is also a need for solidarity when crises arise. Listening to the discussions in the European Parliament as well as in the Council, it seems to me that the approaches are fairly different. My conclusion is, therefore, that we need to study the options carefully and discuss them before taking a final decision on the instruments to be used.

I agree completely with Mr Graefe zu Baringdorf that prevention is usually better than cure and my personal view is that the conference on coexistence to be held in April is necessary in order to avoid GMOs being mixed with organic production. I am therefore particularly looking forward to that discussion.

As for your views on fossil fuels, I do not think that we should wait until we have used up those fuels; we should start now to look at what can be done on renewable energy. I am thinking specifically about our recent discussions on bioethanol and the possibility of taking full advantage of agriculture’s contribution to this future way of reducing our carbon dioxide emissions.

This has been an interesting discussion and I thank the rapporteur for what I consider to be a balanced approach to this very important issue.

  President. The debate is closed.

The vote will take place tomorrow at 10 a.m.