Present Danish situation and perspectives of the CAP reform after 2013

1. Present Danish situation and perspectives of the CAP reform after 2013 23 February 2012 Erik Kam

2. Background • DAFC established in June 2009 through a merger of: • The Danish Agricultural Council • The Danish Bacon & Meat Council • Danish Pig Production • Danish Agriculture (including Media Service) • The Danish Agricultural Advisory Service • The Danish Dairy Federation (part) Danske Slagterier

3. Danish Agriculture & Food Council • Denmark’s trade organisation for agriculture and food • Brings together and represents: • Farmers • Food and processing industry as well as farm supply, mainly cooperatively owned • Agribusiness • Key activities include • Lobbying – representation of the sector’s political interests • Gaining market access and export promotion • Providing advisory services for farmers • Supporting knowledge and innovation

4. Foreninger Virksomheder Brancher Our members include…

5. Knowledge Centre for Agriculture Kolkærgård Kolle Kolle AgroTech Kjellerup Axelborg Media Vejen Bruxelles London Tokyo Beijing Location of personnel(1,100)

6. Our roles Global market access and promotion Political advocacy Advice for farmers and industry members Knowledge and innovation

7. Lobbying • Copa – working group’s • EDA • CLITRAVI • UECBV • EU-Commission – advisory Committees • European Parliament • Danish Ministries • Danish Parliament

8. The Danish Agriculture and Food Industry (2009) • Approx. 40,000 farms • Approx. one third are full-time farmers • Average farm size is 80 ha • Average size of full-time farm is 160 ha • Denmark's largest industry grouping • 145,000 employed in agriculture and related industries • The industry's production accounts for 3% of GDP • Two-thirds of production are exported • The industry accounts for 12% of exports from Denmark • 20% if agribusiness is included

9. Farms and cooperatives - structural development

10. Structural development - companies • The two biggest coop’s is Arla (dairy), Danish Crown (pig meat) • Shareholding – open for external finance in the future • Huge activities outside Denmark • Their total yearly turnover is more than 14 billion Euro • More than half of their turnover is generated outside Denmark

11. Production Livestock products Source: Statistics Denmark

12. Production Crops Source: Statistics Denmark

13. Employees 2009

14. Exports2010 Denmark's total exports of goods: DKK 544 billion Agricultural exportsDKK 66.4 billion Agroindustrial exports DKK 43.5 billion Source: Statistics Denmark

15. Development of agricultural exports

16. Agricultural Exports 2010 By product category Total DKK 66.4 billion Others of animal origin covers also export of live pigs which in 2010 had a value of DKK 3.8 billion

17. Agricultural Exports 2010By country Total DKK 66.4 billion

18. Agricultural Exports 2009By continent Export DKK billion Europe 41.7 Americas Asia 2.3 15.6 0.8 Africa Oceania 1.2

19. Exports of agricultural goods, agribusiness products and services

20. Agriculture, CAP and the global challenge • The fact • Global population in 2050: 9 bn • The challenge • To increase agricultural production in a sustainable manner • The international focus • G20 – Final declaration, Cannes, Nov. 2011 • “Increasing agricultural production and productivity is essential to promote food security and foster sustainable economic growth. ...” • This must be reflected in a reformed CAP

21. Definition of competiveness Version 1: Protection of markets to keep competitors out. Version 2: Sales of products in direct competition with others – based on price and quality.

22. Future CAP • What is likely to happen with the CAP • Decreasing overall budgets for agriculture • Flat rate of direct payments • Greening component • Modulation (up to 10 % can be moved) • Producer organizations for all products • Safety-net (market management)

23. Multiannual financial framework 2014-20 • Overall budget increased by 2.3% • 1,025 bn € • Agriculture budget reduced by 11% • 383 bn € • Direct support budget nominally unchanged • Further 15.2 bn € complements the agricultural budget • 4.5 bn € research and innovation • 2.2 bn € food safety • 2.5 bn € support for most deprived • 3.5 bn € reserve for crisis in agricultural sector • 2.5 bn € European Globalisation Fund

24. Distribution of direct payments Pillar 1: DK loses approx. € 34 mio. or 5.7% (Uncertainty about modulated funds) • DAFC position: • We agree that is fair to establish a new distribution of the direct payments to benefit some new member states • However, present distribution reflects “objective criteria” • Proposal for new distribution discriminates against member states with many livestock

25. Challenge • How to compete in the future, with countries outside • the EU, who do not face the same restraints on • animal welfare , environment, appliance of new • technology etc. ? • WTO – reducing import protection in the future. • Agricultural budget is declining – overall less support • for the EU-farmer. • Supermarket chains are getting bigger and more • concentrated and powerful

26. Greening – general position • DAFC generally support a greener CAP – including pillar 1 • Subsidies should be linked to the delivery of public goods (e.g.: environment and climate change) • Concrete proposal should be • more flexible; • more targeted to challenges in different member states; • incentives for introducing general regulation; • less bureaucratic for the farmer

27. Conclusion: We need simplification! • More proportionality • The same sanction should have the same consequence for different farmers • Fewer, clearer and more targeted cross compliance requirements • Reduction in the number of controls, if control system is working well

28. Pillar 2 In conclusion • Greening of the CAP • recognising the frontrunners • Increasing share of RD-budget • to better reflect our challenges • Convergence between MS • distribution to reflect ag. production • Flat rate • internal distribution to be determined by MS