The EC was greatly encouraged to see the important progress made by Serbia in its preparations for IPARD and it is clear the country’s government played a crucial role in this process.
Serbia finally started using the IPARD programme this year. It is well known that you have collaborated intensively in previous years with the Serbian authorities on removing obstacles. With that in mind, how would you comment on this news?
– Cooperation between my officials in the Commission and their Serbian counterparts is very good and has enabled Serbia to finally begin to benefit from assistance in the agriculture sector in line with EU requirements. And it is clear that the Serbian authorities take this whole issue very seriously: the IPARD agency is housed in one of the most modern buildings in Belgrade and its staff is highly qualified and well-trained.
As a reminder, IPARD provides support to boost the competitiveness of the agri-food sector and helps farmers and agricultural businesses in EU candidate countries with their gradual adjustment to EU rules on food hygiene, food safety, veterinary and environmental standards. IPARD support can also be used to help diversify the rural economy in these countries.
In total, EU funding of €175million is available for agriculture and rural development in Serbia through IPARD
We have to date had one call for applications for support, focused on machinery and tractors, with almost 500 applications received, which is excellent and shows the strong interest of Serbian farmers in benefitting from this support. I hope to see a similar, if not higher, level of interest in the current open call, which is aimed at small and medium-sized Serbian food processing firms.
What are the leading European trends in agricultural production today?
– Food and farming remain a vital part of the EU economy, and of all our lives, but in many ways, it is under pressure more than ever before. The old ways of state aid, subsidies and intervention to support agricultural markets are long gone, and the CAP is now fully market-orientated, with all the potential advantages and risks that that entails. So, I think the challenge for farmers will continue to be how to make a fair and sufficient living from their business, while for policymakers the challenge is how to help farmers make that happen!
At the same time, farmers also face the need to adapt to an ever-changing world, where businesses and consumers expect them to play their part in tackling climate change and protecting biodiversity, or where new technologies are changing the way we think and act on an almost daily basis.
On the policy side, we will certainly continue to monitor European agriculture markets, as we do already through the various observatories and dashboards that we create for a variety of sectors. Understanding the market and where it is moving is vital not only for farmers and businesses to plan but also for us, as policymakers, to be able to head off potential issues or crises before they grow. The dairy sector was, in particular, trouble a few years ago, but we were able to react quickly with a package of measures to support dairy farmers in their time of need. However, while the situation has improved, the market remains difficult and we need to keep a close eye on this and other sectors too, to ensure that we can act quickly if and when needed.
You will find all these trends and challenges reflected widely in the proposals I will make soon on the future of the CAP after 2020.
What are the main weaknesses of Serbian agriculture compared to developed EU countries?
– Agriculture (and the wider food industry) is a very important pillar of Serbia’s economy, both in terms of its contribution to the country’s GDP (around 10%) and employment (20%). Trade between Serbia and the EU in agricultural products, both primary and processed, has more than doubled to over €2 billion since the 2008 conclusion of the Stabilisation and Association Agreement (SAA). Since the entry into force of the agreement, Serbia has consistently enjoyed a positive trade balance that has continued to improve in recent years.
This is all good news, but the sector still faces numerous challenges: for example, Serbia needs to place greater emphasis on developing a strong food processing sector; there is a need to tackle regional and structural imbalances as regards farm size distribution and efficiency; and land fragmentation and low average farm size pose a challenge to the sector’s competitiveness, to name but three challenges.
As far as preparation for rural development programmes is concerned, there are still some weaknesses at the administrative level that need to be addressed. For example, staff in key positions are changed too frequently, while many of the administrative procedures are still too onerous. We have also identified a lack of skills and training in certain areas, for example in advisory services.
Did you have similar problems in the new EU member states and countries of the region, such as Romania, Bulgaria, Croatia, or even Hungary; What can Serbia gain from the experience of these EU member states?
– The effects of the previous enlargements for the agricultural sector have been encouraging. In most of the ‘new’ member states, positive developments and new opportunities outweigh the challenges and costs of full integration into the single market. In general, the integration of the newer member states into the Common Agriculture Policy took place without any major difficulties.
That said, there is always prepared to be done and planning needed to ensure the success of the enlargement process. Reform should not be delayed, but it is clear that changes and adjustments cannot happen overnight – they need time and should be completed prior to accession. Two aspects of alignment with the CAP are particularly important: you need to build the institutions necessary for handling and controlling CAP payments, while support systems have to be aligned in time prior to accession.
As far as the rural development programmes are concerned, it is true that Serbia is not alone – and certainly not the first – in facing these challenges. Experience shows that as the implementation of programmes is delayed, it is vital to ensure that contracting and payments are accelerated to make sure the EU funds are not lost. Implementation has to be monitored closely and the authorities must be able to react quickly if obstacles arise.
But it is also important not to let this dent your ambition – don’t be afraid to focus on the more challenging issues, such as agri-environmental measures, rural infrastructure or producer groups, even if they take more time and are more complicated to implement. Experience shows that the investment will pay off later!
I think the challenge for farmers will continue to be how to make a fair and sufficient living from their business, while for policymakers the challenge is how to help farmers make that happen!
How do you assess the institutional and legislative harmonisation of the Republic of Serbia with EU regulations and norms in the accession process? What is the situation at present?
– Serbia already has some level of preparation in the area of agriculture and rural development but, as I said earlier, changes and adjustments cannot happen overnight – they need time. The acquis (the body of EU law) in the area of agriculture and rural development covers a large number of mandatory rules, many of which are directly applicable. Their proper application and effective enforcement by public administrations are essential for the functioning of the Common Agricultural Policy (CAP) – and as such need to be properly prepared and implemented in good time.
To benefit from the single market, products produced in Serbia need to comply with EU standards. Many Serbian products already do, since Serbia is a net exporter of agricultural products to the EU, but for others, there is a need to adapt. It takes time to upgrade farms and food establishments. It can be difficult to persuade farmers to accept costs and constraints linked to new policies and rules, but the EU can provide support in this regard, in particular with IPARD. Compliance with EU standards ensures that Serbian exporters can compete on the EU and other markets. The EU is providing substantial assistance to help Serbia in this alignment process.
As I mentioned before, we have seen with the preparation work on IPARD that Serbia is more than capable of rising to this challenge.
How do you assess progress in this domain, what else needs to be done? In your opinion, which of the negotiating chapters will be the most complex and difficult to negotiate?
– I can only speak for the area I know best, and for which I have the responsibility, namely agriculture and rural development – which is chapter 11. It is widely regarded as one of the most important chapters of the EU acquis. As I mentioned earlier, this body of law on agriculture and rural development covers a large number of binding rules, many of which are directly applicable. For the Serbian government, this means the creation and/or reinforcement of appropriate administrative structures to be able to apply EU legislation on direct support schemes and to implement the common market organisation for various agricultural products
Let me highlight the benefits of enlargement and Chapter 11: farmers will benefit from the CAP, a policy designed to develop agriculture in a sustainable and profitable way, at the same time bringing more stability for farmers. The EU’s rural development funds will also improve the quality of life in rural areas, increase the farm sector’s competitiveness and contribute to the diversification of incomes in rural areas. An enlarged EU market will bring many possibilities for farmers and agri-food businesses. Looking beyond the internal EU market, enlargement will also bring big opportunities in terms of access to international markets.
Trade between Serbia and the EU in agricultural products, both primary and processed, has more than doubled to over €2 billion since the 2008 conclusion of the Stabilisation and Association Agreement (SAA)
You recently announced that the new CAP is in its final stage. Can you provide us with some details? What is the idea behind this revision; and what are the expected goals and benefits
– Since I became the Commissioner for agriculture and rural development in 2014. I’ve spoken with many farmers, national authorities, associations and ministers about the common agricultural policy, and the one thing almost all of them tell me is that it is too complicated and complex -and that this means it does not deliver what we expect it to deliver.
This has been the starting point for our revision of the CAP, to make it simpler and more modern, making sure that the support is targeted where it is needed most, and where it can bring real results. Putting it simply, we think that while it is vital that the CAP remains a common European policy, with aims and objectives clearly defined and set at the EU level, meeting these aims in the most effective way is best achieved by giving member states greater flexibility to target support where it is most needed. As such, the policy will continue to be set at the European level, but implementation will be much more flexible and focused on the national level. We want to reduce the rules and go for performance and results rather than making sure everyone complies with the rules, as was the focus in the past
Let me be clear, though, that this is not about giving control or responsibility for the policy – and the money that comes with it – back to the member states: there will always be a C in the CAP! It’s rather about understanding that one size does not necessarily fit all and that each member state has different needs, different capacities and different objectives. If we want our policy to be more results-based, it must become more flexible, more targeted – and that means it has to become less centralised in some ways. This is why each member state will now have to produce a CAP Plan, setting out where there are particular needs in terms of support for farmers and for rural development, how they meet the overall objectives set at the EU level and how they propose to target the funding more effectively towards meeting these objectives
As for how the policy objectives will change at the EU level, let me focus on just one area – perhaps the most important of them all. We clearly need to make sure that our policy is sustainable, and that means a far greater level of ambition when it comes to the environment and climate-friendly measures. This is why we propose setting far more rigorous sustainability targets for farmers to meet in order to receive their direct payments, for example, along with greater flexibility, with more incentives for member states to establish their own eco-schemes to further encourage farmers to farm in a sustainable manner.
This new delivery model for the CAP is the most significant change I am proposing, but there are many others as well – not least a far greater focus on innovation and technology to help modernise and simplify the policy (for example, using free-to-use satellite data to monitor farm size or crop rotation, thus reducing the need for on-the-spot checks significantly).