I propose to take Question Nos. 10 and 11 together.
I must first underline some fundamental points that we should bear in mind in this CAP reform. Now, more than ever, we need to focus on ensuring security of supply of safe, high quality and sustainably produced food — at reasonable prices for our consumers, and with reasonable returns to our farmers and processors. In order to achieve this we will require a strong and adequately resourced CAP. I agree with the communication that "the CAP should remain a strong common policy, structured around its two pillars". However, I would caution that, to be meaningful, this will require appropriate resources and this must be reflected in the new financial framework.
Although three options for CAP reform are outlined in the recent Commission communication, it is clear that the main option under consideration is the second option for a better targeted and effective policy. I had the opportunity to give my first reaction to the communication at last Monday's meeting of the EU Council of Agriculture Ministers. This was the first step in what will be a lengthy process of negotiations. Over the coming months, we will discuss the communication in greater detail with a view to agreeing conclusions on the general orientation of policy for the CAP after 2013, before the legislative proposals, due next July, are framed. I will be participating actively in that process and I will continue to build up alliances among my colleagues in other member states to secure support for my position.
The communication is short on detail so I would reserve our position on many of the substantive issues until such time as detailed proposals are presented. Having said that, I welcome the commitment of the Commission to a strong CAP in the future and I subscribe to the three strategic aims that have been identified of ensuring security of food supply, sustainable management of natural resources and maintenance of viable rural areas. I also welcome the commitment to the continuation of decoupled direct payments, the maintenance of the current rural development themes and the retention and enhancement of market management measures, although I would have preferred to see more specific proposals to address the increase in market volatility.
The communication makes brief reference to the distribution of funds between member states under pillar 1 and pillar 2. I believe that Ireland's current share of these funds is entirely justifiable, and I will be defending this strongly in the negotiations.
The issue of payment models, that is, the distribution of funds between farmers within each member state, is an entirely separate matter. I favour allowing member states considerable flexibility in this area, as is currently the case. The agro-ecological and social conditions of farming vary hugely within the European Union, as does public perception of the role of agriculture in the economy. We should not, therefore, impose a "one size fits all" payment model on all member states.
With regard to the proposed "greening" of the direct payment, I am particularly concerned that we should not underplay or undervalue the substantial environmental public good already being delivered through the current cross compliance requirements. I welcome the commitment in the communication to simplification, but we must bear that issue in mind when discussing any further "greening" of the single payment.
I welcome the continued emphasis on competitiveness and sustainability in rural development policy. I note the increased focus on the environment, climate change and innovation and the suggestion to link investments to both economic and environmental performance. This is acceptable provided it is complementary to the investment necessary for restructuring and modernisation. It is vital that we use rural development measures to improve the competitiveness, as well as the sustainability, of our family farms. In addition, Ireland has a strong preference for retaining LFA payments in pillar 2.
The communication mentions the importance of targeting support towards active farmers. I agree in principle with this approach but I would wish to see further details of what is envisaged before taking a definitive position. I am also prepared to examine the introduction of upper ceilings for large-scale farms and a simplified direct payment system for small farms but I would need to see in more detail what precisely is being proposed. I would have no major objection to the retention of limited coupled support for specific regions, provided it falls within clearly defined limits.
I am open to exploring the proposal to introduce a new risk management toolbox and await further details with interest. For us it would be important that such a toolbox would have optional application in member states and would respect the wide diversity of production systems and farming throughout the EU.
Finally, I would emphasise that the communication is merely a first step in the formal negotiating process. There is a long way to go before we arrive at a conclusion of these negotiations. The negotiations will not be easy but I am determined to fight for the best possible outcome for Irish agriculture. Agriculture is our largest indigenous industry and we have much to gain from a successful outcome.