Gastcollege Minister Veerman Universiteit van Tilburg

Toespraak | 01-03-2007

Future of agricultural policy in a global perspective

In order to understand the process of European cooperation, one has to view it from the historical context of the European continent.

It is impossible to develop a proper understanding on Europe, let alone a view on the continent without that context, without the extremely drastic historical events, without the consequences of political decisions, technological developments and dominant spiritual and ethical ideas.

3 major events and their mutual coherence:

• World war I
• Great Depression
• World war II

Analysis of their consequences:

• War: never again, never again this socio-economic malaise
• Creation of guarantee of security: NATO (Atlantic view)
• Creation of welfare state: planning and care
• Creation of European cooperation: how was it done?

Draft of the formation of conceptual political unification through economic integration:

• Yet, political cooperation in the Council of Europe (10 countries) failed.
• Plan Schuman: integration per sector.
• Mansholt saw opportunities for agriculture; the reasons are obvious.
• Supranationalism: European Community for Coal and Steel 1951, next step: defence community.
• Mansholt pleaded for simultaneous sectoral and political integration, Drees was rather reserved.
• 30 August 1954: French parliament rejects proposal for European Defence Community.
• Another try: Jean Monnet: sectoral integration 'Nous ne coalisons pas des états, nous unissons des hommes.' 'La liberté, c’est la civilisation. La civilisation, c’est les règles plus les institutions.'.
• Though Monnet departed from transport and energy; Netherlands (Mansholt) put agriculture forward.
• Spaak presided the negotiations: 25 March: European Economic Community, EURATOM, Treaty of Rome.
• Agriculture included in Treaty of Rome: in order to satisfy France. The final aim: customs union.
• The UKwas in favour of a free trade area without agriculture. Mansholt would have liked to exclude the United Kingdom, contrary to Drees. The French (De Gaulle) were not in favour of the inclusion of the UK either.
• 1958 €pean Commission.
• 1968 creation of Common Agricultural Policy; the one and only commonly financed policy.
• Agriculture was at that time excluded from GATT-agreements, because the American Congress refused to subject their agricultural policy to an international trading system.

The policy of the Rome Treaty (1957) was very quickly very successful.
Policy goals were:

• To increase agricultural productivity by promoting technical progress.
• To ensure a fair living standard for the agricultural community.
• To stabilise markets.
• To assure the availability of supplies.
• To ensure reasonable consumer prices.

Europe transformed soon from a major importer to a major exporter.

Developments in 1970s and 1980s
Leading to a derailed CAP:

• Fortress Europe: market access
• Export refunds: trade distorting policy competition
• Consequences for developing countries
• Heavy burden on budget: more than 70%
• Natural and environmental consequences

Temporary measures: duties, quota etc.

WTO ‘machine’:

• Critical studies about welfare gains of trade liberalisation.
• Rise of producing countries.
• Worsening position of poor developing countries in Africa.
• Economic sentiment concerning subsidies: Washington doctrine en privatization.

Reforms
starting in 1992 (Mac Sharry) and Agenda 2000:

• The cutback of agricultural prices to render them more competitive
• Compensation of farmers for loss income
• Protection of the environment
• Measures relating to market mechanisms

Further reforms in 2003:

• Fixed upper limit of CAP budget
• Reform of all sectors: decoupled support and Single Farm Payments. Direct aid to producers was phased out and decoupled from production.

How to go on with the only common policy?
Essay: spiritual and intellectual history of Europe and
Characteristics:

Important external changes:

• 12 new member states, from 5 million farmers to 15 million farmers without extra budget.
• Food versus energy.
• Water and climate.
• Globalisation and liberalisation.
• Changed social priorities: rural development, animal welfare, conservation and development of nature and landscape.
• High priority for the ‘good life’, health, food, rest and relaxation, to experience space.

Modern interpretation of justice and freedom.

Comments on the future
Welfare gains and liberalisation

• Precise models: moderate estimations of welfare gains: from 600 mld US$ to 96 mld US$ (with a variety from 0.14% to 0.32% of global Gross National Product).
• Gains not in agricultural sectors; but in services and industry.
• Regional impacts of trade liberalisation differ a lot: Africa and China are mainly losers.
• Increase in prices for basic goods: disadvantageous for poor countries (as they are net importers).
• Winners are found amongst the developed countries.
• Developing countries take most advantage for South-South trade.

12 new member states:

• Young democracies; have short life cycle politicians.
• Traumatic history: for example Poland.
• Differences in welfare: income per caput.
• Differences in development: industry, agriculture, services.
• Migration pressure.
• ‘Old sores’: minorities.

Decision making and further cooperation:

• Dramatic end of constitution.
• Attempts to improve the Treaty of Nice: decision-making processes.
• Necessity of the Netherlands for constructive engagement to overcome ‘no vote’.
• Important role for Germany: in the middle, the centre of Europe.
• Our position vis-à-vis Germany.

How should we continue? Finally there is an urgent and central question: ‘What then can we do? How then should we live?’

• Renewing of the spiritual roots of Europe; humanism and Christianity: connection of culture
• Raise historical consciousness: from where? Whereto? Plea for historical education.
• Revival of basic principles: freedom and justice; philosophical reflection ‘after 1989’.
• Common action on sustainability, energy, migration and climate.

This is how I come back to agriculture.

• Agriculture and the rural area as the basis for a good life in a united Europe. Good life relates to justice in an open freedom that surpasses the material aspects of the good life.
• Key role for rural area: green energy, high quality food en consumer space for the citizens.
• Rural area has four main functions:

• First place: production space to secure the production of high quality food, raw materials and energy. This process is primarily market driven.
• Second place: rural area as production space for collective or semi-collective goods and services. The government’s role here is clear.
• Third place: function of rural area at the point where the two previous functions meet, that is the production of food and renewable raw materials in regions under production conditions that are not optimal because of natural circumstances. Legitimisation of public contribution derives from the public interest associated with continuing these production activities (production of social values).
• Fourth place: to provide city-dwellers a taste of the good life; to experience peace and space and a feeling of freedom in the rural area.

Government has to support development in various directions. This demands a fundamental reflection on the relationship between Member States and the Union.

European cooperation is needed in order to face the immense complex issues regarding space, scarcity and freedom.