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OPINION

05.09.2024

The Committee on Agriculture and Rural Development calls on the Committee on Budgets, as the committee responsible, to incorporate the following suggestions into its motion for a resolution:

Mr Johan Van Overtveldt

1. Takes note of the EUR 53,75 billion in commitments and EUR 51,12 billion in payment for agriculture; regrets the decrease compared to 2024 and calls for a budget increase and strategic implementation considering the climate, environmental and political challenges the agricultural sector and rural communities will face in 2025 such as the impact of imports from third countries without mirror clauses, the increasingly higher input prices, extreme adverse weather events, as well as the frequent damage caused by animal diseases; stresses that a budget increase is justified as farmers are key actors in the fight against climate change; recalls that the long-term resilience of farming has been undermined by cumulative inflationary pressure in agricultural inputs, fuelled notably by the successive consequences of the COVID-19 pandemic and the war in Ukraine;

Chair

2. Recalls the objectives under Article 39 of the Treaty on the Functioning of the European Union, which include increasing agricultural productivity by promoting technical progress, ensuring a fair standard of living for farmers, and guaranteeing food security;

Committee on Budgets

3. Considers that it is appropriate that the aforementioned objectives of the Union primary law are explicitly and prominently featured in the introduction to Heading 3 in the General Introduction of the 2025 budget;

BRUSSELS

4. Notes that spending under the common agricultural policy (CAP) significantly exceeds the climate and biodiversity mainstreaming targets and requests that this surplus be used to allocate funds that directly contribute to the primary objectives of the CAP;

Subject: Opinion on the General budget of the European Union for the financial year 2025 - all sections 2024/0176(BUD)

5. Recalls that farmers and rural communities are key actors in the provision of high quality affordable food and the preservation of rural areas, especially their economic attractiveness; highlights the role that agriculture plays in achieving the Union objectives of food security, sustainable growth, social inclusion, as well as adaptation and mitigation of climate change, while helping to diversify agricultural production, preserve biodiversity and develop local economies; stresses that the 2025 Union budget should be aligned with the Union’s international commitments;

Dear Chair,

6. Emphasises that people living in rural areas, including farmers, have particular mental health challenges associated with the risk of disconnection and lack of access to mental health services, with suicide rates among farmers being 20 % higher than the national average in some Member States; therefore calls for mental health supports for farmers to be specifically integrated into Union agricultural policies through the provision of long-term funding;

Under the procedure referred to above, the Committee on the Internal Market and Consumer Protection has been asked to submit an opinion to your committee. At its meeting of 24 January 2024, the committee decided to send the opinion in the form of a letter. It considered the matter at its meeting of 5 September 2024 and adopted the opinion at that meeting.

7. Deplores the ongoing negative cascade effects Russia’s war against Ukraine has on agriculture and all farmers in the Union, especially those in Member States bordering Ukraine, such as high input prices, inflation or market disturbances and difficulties in monetising agri-food products; calls on the Commission and Member States to adjust their funding accordingly; emphasises the urgent need for additional better-funded instruments for crisis management and for concrete measures to deal with market disturbances; recalls that while ongoing support for Ukraine is crucial when securing global food security, the competitiveness of farms in the Union should not be threatened; welcomes the application by the Commission of safeguard measures for commodities such as sugar, eggs, oats and groats;

Yours sincerely,

8. Underscores that the 2 % deflator of the multiannual financial framework (MFF) does not compensate for the loss of value linked to inflation; notes that direct payments have significantly decreased in real terms due to inflation, while the administrative burden on farmers has increased due to the accumulation of restrictions, obligations and bureaucracy; highlights in that regard the fact that the CAP budget in the 2021-27 MFF is already lower, in real terms, than in the previous planning period; stresses that the preparations for the next MFF should address all these shortcomings;

Anna Cavazzini

9. Regrets that the same 2 % deflator has not been applied by the Commission to the budget allocations of the programmes of options specifically relating to remoteness and insularity (POSEI); stresses the vital importance of the POSEI scheme for maintaining agricultural activity and for the provision of food and agricultural products in the outermost regions; regrets that the levels of support offered by that scheme have not been revised to provide them with the necessary financial resources, which is exacerbated by the fact that their appropriations have not been adjusted in line with inflation, resulting in substantial losses in real terms; calls on the Commission to increase the amount allocated to the POSEI funds to cover for the increase of production costs and inflation of the last few years, and thus uphold the viability of agriculture in outermost regions;

IMCO Chair

10. Deplores the EAGF budget cut in the MFF mid-term review of EUR 440 million for the next three years; regrets in particular the cuts to the promotion of agricultural products and suggests that any availability identified under the EAGF sub-ceiling at the time of the Amending Letter could be used to mitigate such cuts by reinforcing the elements that had to be cut or severely restricted, in particular promotion “multi” programmes and technical support for the implementation of the CAP as these programmes increase awareness and recognition of Union quality schemes as well as the competitiveness of Union agricultural products by clearly easing Union producers’ access to third-country markets, especially for high quality and high value products; calls for maintaining an inclusive and strong promotion policy budget, at least at the level of 2024, to ensure that the policy continues to support all agricultural sectors, guarantee the competitiveness of agriculture and our food sovereignty and allow the creation of new international markets for Union agricultural products; stresses the growing interest in promotion programmes in 2024, which has seen an increase in project submissions; would like to see more resources allocated to the promotion of Union agri-food products and food education initiatives, with special reference to programs aimed at young citizens for increased fruit and vegetables consumption, reaffirming the importance of the Union's school fruit, vegetables and milk scheme, in that regard, invites the Member States to make full use of that scheme; calls for a substantial CAP budget increase in the next MFF to ensure food security, stability and a fair income for farmers;

SUGGESTIONS

11. Welcomes the recent CAP simplification package and notes it has no budgetary impact; underlines that the simplification measures should serve as a basis for the next CAP reform; acknowledges the importance of the continuation of this package until the end of the current programming period and for additional measures and resources to address the causes of farmers’ discontent across the Union with a focus on strengthening their position in the agri-food value chain; recalls in that context that farmers are structurally in a vulnerable position in the value chain and underlines that the improvement of their position is an essential condition to increase farmers’ incomes and to help them face climate change consequences, in particular regarding its mitigation and adaptation; calls for an increase in the budget for investments in the distribution networks of agricultural producers in order to tackle the issue of speculation in agricultural products as well as for a revision of Directive (EU) 2019/633 of the European Parliament and of the Council to ensure that farmers receive their fair share of the final price paid by the consumer for food; highlights the need to support farmers in implementing new obligations linked, among others, to biodiversity and climate actions, including specific funding and properly financed advisory services;

The Committee on the Internal Market and Consumer Protection calls on the Committee on Budget, as the committee responsible, to take into account the following suggestions into its motion for a resolution:

12. Underlines that young farmers have the potential to be a driving force in sustainable farming; calls therefore for the strengthening of support measures and a higher budget for young and new farmers, including female entrepreneurs, and for the improvement of their access to land and credit, as well as the facilitation of knowledge transfer from older people to the younger generation in order to increase the confidence of young people to start the farming profession; welcomes in that regard that the Commission has prioritised increasing access to land for young farmers in the upcoming CAP reform as gaining access to land is one of the main obstacles for young people attempting to enter the agricultural sector; calls for the reduction of bureaucratic measures in accessing Union funds to ensure generational renewal; recalls the importance of providing young farmers with access to quality training opportunities and asks for a greater involvement of women through aimed funding programmes as well as legal and political measures to increase their access to the profession;

1. Understands the need for restructuring the MFF in order to match the modified budgetary needs due to the post-pandemic situation, high inflation and the Russian invasion of Ukraine, but underlines at the same time the needs to strengthen EU competitiveness by deepening and making the Single Market more resilient, therefore adequate financing of the Single Market programmes is necessary, as it plays a key role in the economic recovery process and achieving the EU’s consumer protection, digital and sustainability objectives;

13. Recalls the importance of EAFRD funding in rural areas, not only for farmers, but for other rural actors supportive of farmers; recalls that a strong budget for those actions is also needed in 2025; highlights the central role played by community-led local development initiatives in keeping and restoring living and thriving local rural economies, and the need to keep a sufficient level of funding for the LEADER programme; calls on Member States to make full use of LEADER's capacities;

2. Expresses hope that the newly elected college of Commissioners will support the further development of the Single Market in sectors like services, electronic communications and digital market economy; calls for concrete initiatives and actions to boost cross-border trade in services, dismantle unjustified barriers to their free movement, reduce unjustified administrative burdens for companies, and ensure adequate implementation, compliance and enforcement of existing legislation;

14. Notes the amount of EUR 450 million for the agricultural reserve and recalls that EUR 516,5 million was necessary in 2024; calls on the Commission to allocate adequate and consistent funding for the agricultural reserve to mitigate the economic impact of climate change on farms and safeguard food security and autonomy, while ensuring that direct payments are not affected and exploring the possibility of mobilising funds outside the CAP, as well as allowing the use of margins to finance that reserve; highlights that the agricultural reserve was only deployed for the first time in 2022 and has become since then a more widely used tool; insists on Parliament’s role in the use of the reserve and calls on the Commission to follow objective and transparent criteria in the allocation of the funds;

3. Sees big potential in the current reform of the Union Customs Code and establishing EU Customs Authority; underlines that effective simplification of customs procedures and proper enforcement of customs systems are essential for combating fraud, counterfeiting and transnational crime, driving competition, ensuring compliance with EU law and protecting consumers; reiterates the importance of an adequate and effective level of commitment appropriations to allow the modernisation of the customs union and development of electronic and more automated customs systems in the interest of greater efficiency for EU companies and streamlined protection of consumers;

15. Stresses the need for a fair distribution of CAP support among and within Member States;

4. Reiterates its call for sufficient funding and staffing necessary to ensure that the enforcement of Digital Markets Act (DMA) is efficient and adequate, guaranteeing that market investigations on gatekeepers’ compliance are done in time to maintain a fair and open digital markets for businesses and consumers;

16. Stresses the need for a fair distribution of CAP support to ensure that its funding is distributed in a fair manner between small, medium and big enterprises since smaller and medium-sized farms are more vulnerable to market fluctuations, crises and inflation;

5. Notes the proposal to allocate appropriations for the Digital Services Act (DSA) in 2025, sourced from supervisory fees charged to Very Large Online Platforms and Search Engines, ensuring robust EU-wide implementation and enforcement;

17. Calls for an increase in the Horizon Europe research budget for agriculture; emphasises the vital role of innovation for more competitive and sustainable agriculture, as well as the importance of digital transformation in agriculture and rural areas to allow for more precise, efficient and sustainable agricultural systems in the Union, as well as to increase the attractiveness of employment in agriculture and rural communities for younger generations and boost tourism; draws attention to the importance of funding for research and development of biotechnology technologies in the light of the upcoming regulations, such as new genome editing techniques, thus securing Union’s leading position in agricultural innovation and its global long-term competitiveness, while contributing to the Union’s objective of strategic autonomy, as recognised in the political guidelines for the next Commission; underlines the need to invest in precision farming solutions, such as robotics, smart water systems or drones that can boost farms competitiveness and productivity, without forgetting integrated pest management in order to optimise productivity while reducing inputs, costs and emissions; stresses that farmers need to be involved in the research and recalls the significance of ensuring that research results reach farm level and are translated into accessible farm advisory services; underlines the role of stronger agricultural knowledge and innovation systems (AKIS), as well as the Farm Sustainability Data Network (FSDN) to encourage innovation projects and to diffuse their use;

6. Highlights the importance of allocating an adequate budget for the implementation of the EU AI Act in 2025; stresses that the level of funding budgeted in 2025 should support the timely establishment of the European Artificial Intelligence Office, the AI Board, the AI Advisory Panel, and the AI Scientific Panel, including the recruitment of around 50 FTEs;

18. Stresses the need to find long-term support measures to reduce the impact of climate change while better addressing, via adequate funding and specialised instruments for farmers, the impact of floods, droughts and wildfires as well as other climate-related hazards on primary production, food security and farmers’ income, that are key for the resilience of the farming sector; points out the inconsistency between the Commission goals to protect large carnivores while concomitantly supporting extensive grazing of livestock; recalls that sufficient funding, via a designated fund, should be made available to Member States in order to enable farmers to protect their livestock and adequately compensate them for their losses caused by wildlife and large carnivores;

7. Welcomes the increased allocation of resources for ensuring a high level of consumer protection and product safety and in market surveillance, recalls that allocating adequate resources to tackle the increasing number of illegal and non-compliant products on the market is crucial in order to effectively protect consumers and avoid the distortion of competition;

19. Stresses that the management and availability of water resources is fundamental to the competitiveness of Union agriculture; highlights the importance of water management structures and their use by farmers to ease their access to water; underlines that access to Union funds for water storage facilities remain difficult although they can help farmers to have access to water in dry periods, increase productivity and yields; emphasises that these infrastructures are multi-purpose and are essential to support farmers but also perform other functions such as water reserves to fight wildfires, tourism, biodiversity reservoirs or reservoirs of drinking water, especially for large agglomerations; calls for the removal of Union and national legal and administrative barriers, in particular those of the CAP, that prevent access to public funds for the construction of those infrastructures; encourages the creation of public-private partnerships for the development of such infrastructure in the Union; stresses the strategic role of farmers and rural communities in areas characterised by high seismic and hydrogeological risk that need specific support from the CAP, as well as small islands; recalls that increasing water resilience and adaptive capacity and supporting measures is necessary to mitigate the threat of climate change to farming systems; calls for an adequately funded Union plan for water use, reuse, storage and smart sharing as well as to safeguard water quality;

8. Believes that additional efforts are needed to support Member States in the digitalisation of the public sector, especially for procedures that affect businesses and consumers, enabling them to conduct administrative procedures online;

20. Calls for appropriate investments to facilitate the transition to more sustainable farming practices through innovation and investment, without reducing Union agricultural production and while avoiding a situation where farmers from the Union face unfair competition from imports that do not meet Union standards; recalls that free trade agreements can represent a major challenge for farmers from the Union in that regard, should they not meet those standards and calls for the inclusion of concrete mirror clauses and financial provisions in the Union budget to provide necessary support to Union farmers facing expected loss of competitiveness from the potential future implementation of trade agreements; underlines the need to ensure a level playing field between Union and third-country producers;

9. Underlines the need to allocate resources to ensure the access to internet and digitisation for all EU citizens, especially the elderly and those living in rural areas; although much progress has been made, it is necessary to end the digital gap and ensure equality of conditions for all citizens;

21. Insists that any revenue to the Union budget deriving from any assigned revenues or repayments of irregularities from agriculture should remain under the agriculture component of Heading 3;

10. Recalls that the Single Market Programme aims at supporting actions to support the wider uptake of strategic public procurement, including improved access for SMEs and freelancers to public procurement; notes that the adoption of best practices in public procurement for projects funded by the EU could help to avoid frequent errors and ensure proper implementation of investments;

22. Asks the Commission that any environmental fund in the future shall not involve financial resources shifted from the CAP;

11. Highlights the need for EU-funding to help ensuring greater compliance of economic operators with rules set at EU-level when placing a product or a service on the market; calls in this regard for increased budget to finance development of EU capacities, such as Union testing facilities as well as action to support greater cooperation and synergy between EU-level and national market surveillance authorities to ensure that products sold both online and offline are safe, and that consumer trust is ensured, in particular for cross-border purchases and for those categories of products at risk; asks the Commission to ensure sufficient funding in that respect.

23. Calls on Member States to provide more support to the cooperative sector, especially by promoting and incentivising the establishment and development of agri-cooperatives;

24. Notes with concern that the production costs of agricultural goods are increasingly often higher than the selling price;

25. Stresses that enough funding should be made available to support Member States to efficiently tackle transmissible animal diseases such as the avian flu or the African swine fever;

26. Encourages Member States to develop agricultural credit guarantee instruments to enable farmers, agricultural associations and small and medium-sized enterprises to obtain easier access to secure, consistent and predictable working capital;

27. Stresses that food accessibility and farmers’ incomes are still major concerns and calls on the Commission to take them into account in the future;

28. Calls on the Commission and the Member States to focus on projects that promote and enhance the safeguarding of existing jobs in the agricultural sector and the creation of quality jobs with full rights, stable and fair pay and decent working conditions including health and safety at work, as well as effectively and decisively combating poverty and social exclusion in rural areas.

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