The fact that the Czech Republic supports a fairer distribution of direct payments to benefit farmers from new member states and the country's reservations towards ceiling on payments for large farms are already known. What else in the European Commission's proposal on the future CAP raised eyebrows in Prague?
The communication that was presented by the European Commission is certainly a good starting point for the discussion. On the other hand, it is relatively general and there is a need to discuss and explain a range of different aspects.
One of the essential problems is that Commission is proposing a transitory period before a fair CAP has been finally established. We disagree here. CAP should be fair, not only 'fairer' as outlined in Commission's options for reform, and it should be also fair from the first day the new rules are applied, not after several years.
New member states are not going to get the full amount of direct payments until 2013 for what they would be entitled to based on pre-accession negotiations. Seen from this perspective, I can hardly imagine another wait for fair conditions.
Can you elaborate on what future payments should be based on to ensure that conditions are fair for farmers all over Europe?
Most probably, an option of a single area payment scheme that would apply all over the EU will hardly be negotiable. Although many countries lean towards such a system, the Commission rejected it.
Therefore, we will push for setting up a basic rate that will reflect the size of cultivated land and serve as compensation for sustainable farming. There would be also additional aid based on specific farming conditions, economic relations in individual countries, the amount of public services provided and other supplementary requirements on production.
What criteria should be decisive for the size of a payment?
We are doing an assessment of various criteria at the moment. I can only say that we think there should be no social criteria.
Let's move on to the future CAP budget. What is the Czech government's vision in this regard?
It is a very sensitive issue. In the national position on the EU's financial framework reform, the Czech government noted the country's net financial position [vis-a-vis the EU budget] and pledged to support gradual decreasing of CAP budget.
But we [our country] currently get much more from the EU budget than what we pay and this will not change for some time. So in upcoming years we should rather be supportive of keeping the budget on the same level or only of minor reductions.
If the balance between CAP pillars were to change, what should it look like, in your view?
We do not resist strengthening rural development policy but we think it should have a fair impact on all the member states and must not lead to significant and uneven co-funding from national public budgets. This is the condition that has not been fulfilled in case of modulation [Editor's note: shift of CAP funding from direct payments to rural development policy].
As far as rural development funding is concerned, the Commission once declared that there is a need to release the potential of the new member states. But development took rather an opposite direction. There should be a clear statement that there is a need to consider the situation in new member countries and help them – by taking into account their higher investment needs.
What do you think the EU's rural development policy should look like in the future?
Currently we have only an outline of a vision. But at the same time, we assess existing measures. We want to gather information on practical experiences with their implementation and to find out if they are efficient. But we still need to discuss a concrete shape of the policy.
Our goal is to have new measures which are the most efficient and appropriately supplement CAP measures from the first pillar in a way that does not create any duplications.
You highlighted cutting red tape as one of your goals in the ministerial seat. Aren't you afraid that the additional requirements indicated by the Commission in its proposal as a precondition for farmers to qualify for direct payments [according to the proposal, agriculture should provide public goods, protect the environment or respond to climate change] could instead increase it?
I would be unhappy if things get more complicated after the reform (as such things already happened in the history of the EU). There is a risk, of course. We know about it and we certainly do not want to underplay it. We need to solve a tough task – to modernise the CAP in a way that it corresponds better to citizens' expectations and is simplified at the same time.
Therefore, we intensively communicate with other EU countries, both new and old, in order to secure maximum possible support for our positions. Negotiations will be difficult as every country has its own vision. I must say, in this regard, that I am very happy that our position can lean on wide support from national stakeholders [in December 2010, the Czech national position on the future CAP was co-signed by farmers, processors and food producers' associations].
But on the other hand, it is also very important how European policy is implemented at national level and I see there further scope for manoeuvring. For me, an obvious priority is a simple European system that is simply implemented in the Czech Republic. Of course, only time will tell how successful we were.
How should the safety net be set up in the future in order to protect farmers against unexpected price volatility and crises?
The milk crisis showed us that market measures are an important instrument that can help stabilise the EU's market in case of demand or price declines. In the future, there is a need to create such a system that could get along without export subsidies and would be sufficiently effective. But in any case, it should not be here to protect sales volumes of agricultural products, as was often the case in the past. It should be a real safety mechanism for times of crisis.
When setting up a new system a lot of things must be taken into account, such as development of talks on world trade liberalisation, as the EU pledged to remove its harmful export subsidies in case the deal is done.
But wouldn't it be difficult to distinguish what is a real crisis and what is, as you said, 'protecting sales volumes'?
To quantify what and which conditions can be regarded as a crisis in a particular country is difficult. We cannot build an ideal model or a formula that could not potentially be abused in case of sudden market swings, such as calamitous snowfall, an earthquake, or a wildfire.
But every country wants to have a tool that is able to deal with such contingencies and prevent the collapse of producers and processors.
What are the shortfalls of the current system, in your opinion?
There are certain additional instruments that are in place in other countries around the world but are missing from the EU's set of market instruments. As an example, I can mention coverage of non-insurable farming risks or compensation payments in case there is a significant slump in farmers' earnings.
So besides modernising existing measures, I see a great opportunity for improvement right here.
Let's leave the debate on CAP reform aside and get back to the philosophy behind farming subsidies. Your party [the centre-right ODS party, which is often labelled Eurosceptic] has criticised the CAP for a very long time. However, as a minister for agriculture, you are now in a position where you defend payments for farmers. Can Czech farmers really not manage without subsidies?
It is in people's nature to simplify everything and that is why they ask why should they pay farmers at all. But if you explain to them that a baker in Germany has better inputs than a Czech baker few kilometres over the border, although we are all part of one European Union, they realise that there is a need to eliminate these differences.
In a similar way, you can also defend measures to shape the landscape. It is not only about subsidies for land consolidation or flood protection. If farmers want to get the EU money they also need to fulfill certain sustainability standards (GAECs). But what are these GAECs really? They are measures on how to return the landscape into its original state [as a result of massive nationalisation of agriculture under the former communist regime in the 1950s, practices that were disrespectful to the land as well as environment were widely applied; damaging impacts on the landscape are still seen in the country]. But people often do not see it this way.
But the farmer should understand that if he does not take appropriate care of his land, for example sloping fields, he will easily see it washed away when heavy rains come. Why should we subsidise him for something he would do anyway?
Contrary to the situation in Germany, Austria, or Italy, the overwhelming majority of Czech farmers, peasants, or cooperatives do not farm 100% on their own land [again, a result of collectivisation in the former Czechoslovakia]. The majority of the land they use is leased under, say, a 10-year contract.
I have 14 hectares myself and I rent it to two farmers. But they are attached to that land because both of them grew up there. On the other hand, there are cooperatives with a 10-year lease contract, with managers who may not get voted again and who, therefore, pursue the short-term interest, which is to get as large yields as possible.
In our country, the problem is that there was a massive nationalisation and people were forced out of their farms. If that was not the case, the people are still there [and farm on their own land].
Once people get the land and they know that it is theirs forever, they will do this job for twenty, or thirty years and then pass it to their children. Their attachment to the land will be completely different.