Czech farmers most affected by CAP budget cuts, warns agri-expert

Petr Havel: "According to current reports, the budget cut would have affected our farmers more than most of the EU, mainly because of the fact that we have many vast, cultivated fields." [Shutterstock]

Cuts to post-2020 Common Agricultural Policy (CAP) funds will severely affect the Czech Republic, according to agriculture analyst Petr Havel who spoke to EURACTIV Czech Republic’s media partner, Aktualne.cz.

Havel explained that the impact could be mitigated if Czech farmers focus on higher quality and more expensive production, adding that SME growth, not subject to subsidy cuts, will also help.

EU membership and the Common Agricultural Policy (CAP) have had a major impact on the agri-sector in the Czech Republic. What were the biggest positive and negative aspects of joining the EU?

The most positive impact was, without doubt, the sharp quadruple increase in agricultural subsidies, compared to the previous period (from about 13 billion to the current 50 billion crowns per year). The biggest negative impact has been the increase in bureaucracy and the increased competition of joining a fiercely competitive European market.

The CAP is facing harsh criticism, particularly from traditional Eurosceptics and political groups that have questioned the very existence of the EU. How do Czech farmers view this? 

As a matter of fact, farmers are rather changeable in their opinions of the CAP, but almost no one can imagine farming without subsidies from the EU. As a result, Czech farmers would probably not vote for an exit from the EU.

After the accession to the EU, Czech agriculture gradually declined, before improving dramatically and starting to grow again in 2010. Was it just the CAP impact and the fact that there was suddenly more money being pumped into the sector?

On the contrary, in many cases, the fall occurred precisely because of increased competition from European farmers and European food producers. Even today, our agriculture does not grow too much if we count inflation. Of course, more money has helped our farmers, but the problem lies in the fact that the capping of subsidies suits larger agribusiness and that has a negative impact on the state of our country, soil fertility and water resources.

The European Commission recently announced that it will reduce farmer subsidies for the next seven years. How will it affect Czech ones? Given that they manage much larger land areas than in other countries and are heavily dependent on EU and national subsidies? Are they now facing the prospect of another fall? 

According to current reports, the budget cut would have affected our farmers more than most of the EU, mainly because of the fact that we have many vast, cultivated fields. However, the fall does not have to come if our farmers produce higher quality and more expensive produce (and thus reduce the dependence on subsidies) and if there is a growth in the small and medium-sized enterprises that will not be subject to these subsidy cuts. The third way is to make greater use of alternative EU support (nature protection, adaptation to weather changes, employment) to offset the subsidy reduction.

Without subsidies, Czech farmers will not be able to compete with farmers in other countries who receive even more from the state and the EU. Do subsidy policies distorts the agricultural market? 

Of course they distort the agricultural market, while at the same time partially compensates the conditions for farmers in countries at different stages of development. The theory that it would be fair to give farmers the same subsidy across the EU is totally wrong. In this case, our farmers would face much more serious competition from Romania or Bulgaria, as well as from other countries.

The Czech Agriculture Association points out that the Czech agro-sector still has relatively low profitability. How can it be increased? Should alternative subsidies be considered? 

In this, the Agricultural Union is right, but the solution does not lie in increasing subsidies. It is rather necessary to redirect them so that farmers are given sufficient incentive to increase their profitability. Even today there are programs promoting profitability, but practice shows that they are inadequate.

The CAP allowed the investment in modern technology and agricultural technology, but most purchases were made abroad, as links between farmers in the Czech Republic, research institutes as well as agricultural technology producers are weak. Why did this happen?

The Czech Republic has long underestimated investment in science and research, not only in the field of agriculture. This should change, including – and this is essential – the faster introduction of new knowledge into business practice.

What is the level of precision farming in the Czech Republic today? What are its options? 

From an EU perspective, Czech agriculture belongs to the better half of the EU. It is almost certainly the best of all post-communist countries, with the occasional exception of Poland and Slovenia. The Czech Republic is better positioned in the field of crop production and beef production but worse in animal production and fruit and vegetable production, as it is limited by climatic conditions and by an absence of intensive production of fruit and vegetables in greenhouses.

Considering in-demand digitization, it was focused mainly on the land register of real estate. For the ministry of agriculture, innovation and digitization are not a major priority. Has this affected Czech farmers? Are they lagging behind their European counterparts? 

Of course they are. On the other hand, the electronic submission of various applications for subsidies and general means of communication has improved a lot. There are also various sophisticated applications usable in agriculture, but the reservations in this area are considerable.

Employment in the agri-sector in the Czech Republic is well below the European long-term average and in comparison to 1989, it has dropped by almost three-quarters. Agriculture is not attractive to young people. How do we reverse this trend? What can government and regional authorities do to tackle it? 

Employment in our agriculture is at the level of developed countries. The high EU average is increasing because of the rapid growth of small enterprises such as those in Poland and southern Europe. We should be careful to not allow employment rates to drop further but the current situation is no tragedy. However, generational inheritance and the influx of young farmers is absolutely necessary. To attract the next generation it is necessary to change the image of agriculture as an occupation with full-time work for little money.

Modern agriculture is based on modern technologies. It increasingly uses IT technology, and the ability to offer a quieter existence in the countryside, away from the bustling and hectic city life, is a particularly attractive bonus for would-be farmers. In addition, it is obvious that due to the increasing population in the world, the importance of agriculture will grow in the future and, unlike other fields, in agriculture, there is no danger that there will be too little work. There will always be a need to produce enough food to feed the world’s population. The only answer and action at all levels are to raise public awareness in agricultural matters. This should be the number one priority if farming is to thrive in the future.

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