Dr. Franz FISCHLER

Member of the European Commission responsible for Agriculture, Rural Development and Fisheries

Joining the EU: the benefits for a small nation state

Round Table meeting with representatives of the Agricultural Community
Nicosia, 9th September 2004

Ladies and Gentlemen,

I had thought that by postponing this trip from July, I might have been able to avoid some of the ferocious heat of the Cypriot summer months but I should have remembered that the warmth lingers on in the South far longer than it does in the north. Nevertheless, it is a little cooler for those of us less acclimatised to these temperatures, and it is a pleasure to have been given this opportunity to visit one of the jewels of the Mediterranean before my term comes to an end next month. Indeed as I was reflecting on the many places I have visited in an official capacity over the last ten years, I realised that this is only the second time I will have been to Cyprus.

It has also been, I would imagine, a time for reflection here as well. I remember when Austria successfully completed her negotiations and joined the EU ten years ago, that it was a few months after accession, when the initial euphoria had worn off that the reality of what we had done, and what we had achieved really began to sink in. We found ourselves in the same intense period of restructuring that you find yourselves in now, we found ourselves facing a bewildering array of new bureaucracy, and we found ourselves having to adjust from being a small and independent state to becoming a small and independent state that made up just one part of a much bigger picture.

It wasn't easy, and it was about this far into membership that Austrians began to analyse what EU membership had really done for their country, what it had given and what it had achieved. And what I would like to start with today is a few of the points that convinced my compatriots, as I expect they should Cypriots, of the many advantages that membership has brought.

Most important was the solidarity and support that comes as part and parcel of the European Union. This has been, for me, one of the EU's greatest achievements. One of the most obvious advantages in this respect is the future it has secured for our remote and rural regions. Austria, like Cyprus, has many rural areas that are handicapped by the natural environment. The mountains of which we are so proud and a climate that is so well-equipped for winter sports are both well and good, but they both limit the economic possibilities. With the wide range of rural development programmes that became available with membership however, Austria has managed to build, enhance and underpin the diversification, growth and sustainability of its rural potential.

Cyprus has already shown its initiative and commitment to making similar progress, and the government has already developed a constructive working relationship with Brussels. Most notably, it was the first accession country to have its rural development programme approved by the Commission despite having been one of the last to start preparing the draft, a point worth highlighting because it is a good example of Cyprus's determination to capitalise on all the opportunities available, despite not having had the chance to gain the hands-on experience that other accession countries had from Sapard.

Not only this, but the Cypriot rural development plan for 2004-2006 is a comprehensive one that makes good use of the variety of measures on offer. Your key priorities clearly identify the direction in which Cyprus wants to move and I am confident that they will enable you to continue the marked progress you have already made. Improving production and processing techniques is crucial for maintaining the infamous EU quality standards, and so for exploiting high value markets. Improving marketing strategies will also be key to developing new outlets for niche products such as halloumi and zyvania [traditional Cypriot products].

Diversification and agri-environment, other priorities of yours, will also help safeguard the heritage of the Cypriot countryside; supporting the creation of new employment opportunities in disadvantaged regions and the sustainable management of natural resources will be essential in the management of Cyprus's fragile ecosystem.

Ladies and Gentlemen,

Beyond rural development there are the many other benefits that come under the umbrella of the common agricultural policy. Quality assurance and promotion schemes are amongst the many other tools in the box that contribute to the sustainable development of all facets of rural Europe and help reinforce the position of our produce on both domestic and global markets. The CAP is there to help our farmers survive, and thrive, in an increasingly competitive world.

There is, of course, inevitably a degree of bureaucracy that comes with supra-national support, another topic that I know has been the subject of much discussion over here, but this is principally because the allocation of subsidies has to be closely monitored and fully justified for the sake of our taxpayers. Farming is dependent on their support, and as is the case with any form of public spending, every cent must be fully accounted for.

But this is another area where EU support comes into its own. Far from being a purely financial mechanism, it is also on hand in the form of advisory and training programmes, and assistance with understanding how to make the most of EU membership and how to access all its benefits. Getting to grips with a new system is not easy, I know that from Austria's experience, but help is on hand throughout the adjustment period and beyond.

And the fact that last year's CAP reform has greatly simplified the procedures is also often overlooked as incoming farmers adjust to the EU support system. Reform has made the policy more cost efficient. It has made it more coherent with the overall EU move towards a more sustainable Europe. And it has made the policy more efficient by tying agriculture's dependents - the environment, food quality and animal welfare - more closely to support. "Value” is the new key word - value for time where farmers are concerned, value for money for the taxpaying public, and a full recognition of the value of our rural areas, and the role that our farmers play.

What is more, reform has also reinforced the so-called principle of subsidiarity, meaning that the man on the ground has become more important than ever before. Far from being the distant decision making body that it was once famed for, the European Union now actively encourages the bottom-up approach. It recognises that the most valuable experience lies in the hands of the local people, it recognises that building a more sustainable future for Europe begins with individual initiatives, and it recognises that maintaining many of the traditions and specialities for which Europe is known worldwide is only possible if the necessary support is offered to producers and communities that are able to maintain them.

And here I come to another important point: while support, financial and otherwise, is readily available, it is only a tool. And because it is only a tool, it is up to farmers to pick it up and use it to its full potential to invest, build, modernise and create new opportunities; to turn this contribution into new innovations and projects for the future. Although Cyprus has some natural disadvantages, notably scarce water resources, it also has many natural advantages from high agri-tourism potential and low incidence of plant diseases, to the possibility of harvesting crops earlier than its competitors. If farmers play on their strengths, then I see a bright future for Cypriot agriculture within the European Union.

Ladies and Gentlemen,

The final point that I would like to mention today concerns what EU membership offers beyond its borders. For Austria, accession wasn't just about the support it offered domestically, it was also the favourable political framework that it provided internationally. Joining one of the three big economic powers of the world gave it additional economic clout and by association it has, as I have underlined in every other accession country I have visited this year, given it a stronger voice in the international trade negotiations.

I am sure that I do not need to tell you that the framework agreement that was reached in Geneva at the end of July was a very satisfactory one from the EU's point of view, nor that it was a very positive reflection on the significant amount of effort that the EU had poured into making it a success. So before I conclude today, I would like to outline what some of the implications of this round are likely to be.

Firstly, it has secured a far more considerable liberalisation of farm trade than that achieved by the last round - the Uruguay Round of trade talks. It will bring about a substantial cut in trade-distorting farm support. It will bring about the elimination of all trade distorting export competition and it anticipates a significant opening of agricultural markets.

Where does this leave those EU farmers who are already querying increased competition from abroad? Well, they remain on firm ground following our reforms. One of the principle changes we made last year was the fundamental shift away from product-related, and thus trade-distorting, support with the introduction of decoupling. This has given farmers back their entrepreneurial right to make commercial decisions based on the market place instead of the subsidy rate whilst maintaining the support vital for the future of our EU farming community and rural areas.

What is also going to happen now, and what is one of the most important implications of the framework agreement that was reached last month, is that while our own efforts have been fully recognised in the context of the WTO, other developed countries are now obliged to make the necessary adjustments to their policies too in order that they can pursue more trade friendly farm regimes as well.

Beyond this, the deal has also paves the way for substantially improved market access. Farm tariffs will be cut according to a single, tiered approach - the higher the tariff, the higher the cut, but the agreement also caters for the EU's requirement to deal with sensitive products. This means that countries can self select an appropriate number of products sensitive to them that can be treated in a more lenient manner.

A third success is the deal secured for developing countries. It exempts the 50 poorest countries in the world from undertaking any commitments, and it reinforces the rules on special and differential treatment for all - again, an initiative that the EU has had established for some time. Longer implementation periods will also apply for developing countries, tariff and subsidy cuts will be lower, liberalisation in tropical products more comprehensive, and special treatment of certain products offered to address food security.

And thirdly, it's finally got the Doha Agenda up and running - true testament to the fact that diverse interests can come together and forge a way forward towards a common goal. What happens next will be the work of the new Commission but I am confident that we are now well on our way to securing a freer and fairer system for all, and one that will create new opportunities, a more balanced and sustainable approach, and a more solid grounding for farmers worldwide.

Ladies and Gentlemen,

We have much to discuss and this last point - a solid grounding for farmers - brings me to my conclusion. All our efforts, be it in the international talks, the accession negotiations or CAP reform, have been geared towards building a secure future for our producers, a secure future for our rural areas and communities, and a secure future for our natural resources.

CAP reform has not only delivered greater efficiency, it also put us in a favourable light in the WTO negotiations. Enlargement has not only created a stronger and more powerful Europe, it has delivered individual opportunities for individual farmers, it offers comprehensive support to enable them to get the most from accession, and it underpins the very important, not to say inevitable, restructuring process.

And it is the restructuring process that has been one of the most invaluable benefits for a small nation state like Austria. It has created opportunities that it could not have otherwise afforded. It has enriched it culturally and economically. And it has strengthened, modernised and stabilised many of its more remote and fragile regions. I know that it will do the same for Cyprus, so long as Cyprus goes to meet the opportunities offered by EU membership, rather than waiting for the opportunities to come to them.

Thank you. I look forward to hearing your comments.