AGRYA Agricultural & Rural Youth Association

1. AGRYA Agricultural & Rural Youth Association The role of young farmers’ organisationin the CAP reform Miklos Weisz associate president

2. Topics 1. About the organisation 2. Young farmers’ status in Hungary 3. Needs for the CAP reform 4. Current activities

3. 1. AGRYA • generation based (<40 years old) • national • non-political • agricultural (and rural) association In connection with more than 3,000 Hungarian young farmers Since 1996

4. AGRYA Members • From the whole country • with different activities: • Crop production • Animal husbandry • Horticulture • Organic Farming • Alternative activities (rural tourism, bio energy, food processing,…), Innovative projects

5. Farming and selling • General problems: boom and bust, price volatility, financing,… • And special ones: Generation change, farm installation, structural problems,… Selling is rather done individually, but co-ops are forming

6. Aims of AGRYA • To protect and represent the interests of young farmers in Hungary, and in international organisations. • To organise vocational programs for its members helping their farming • To prepare & develop young farmers for the changes and challenges connected with the EU membership • To protect agricultural and cultural traditions, and to strengthen rural areas

7. Main Activities Conferences Young Farmers’ Annual Conference Young Farmer Club discussions

8. www.agrya.hu Call Center

9. Representative work • Participation in national boards (MARD - FVM) • Rural Development Programme – Planning • Rural Development Programme – Monitoring Committee • Hungarian National Rural Development Network

10. „Second Wave” Programme For new members From the younger generation (aged 18-25, mainly farmers’ children) - Vocational trainings - Study trips To strengthen their inherence with agriculture

11. International activities CEJA (2004-) RYE (2006-) Exchange programmes International Projects (Citizenship, Youth, Leonardo)

12. Central European Rural Youth Co-operation – CERYC • Sloven – Czech – Polish – Slovak – Romanian – Hungarian • Cooperation programme • Regional cooperation: • - Similar problems – similar solutions • common representation in international organizations • best practices, references • media appearance

13. „The most innovative young farmer in Europe – 2006” AGRYA delegate

14. Kamilla Kesjár - finalist „Most Innovative Young Farmer in Europe - 2008”

15. Strategy Build-up of a Community With Professional Work

16. Presidency Altogether 7 members+ National Office

17. 2. Young farmers’ status in Hungary, problems in the generation changing Generation change measures in the CAP and NHRDP

18. Participants in the Hungarian agriculture (2008) Companies, co-ops: ~ 14,000 Private producers: ~ 600,000 Who apply for subsidies: ~ 180,000

19. Generations in agriculture

20. Companies, co-ops Management: ~ 53%: aged 50-62 ~ 16-17 %: retired Generation change without new generations

21. Support measures for generation change • Installation aid for young farmers • Early retirement for old farmers • higher support for somerural development measures +10%

22. Installation aid (2007-2013) 1st round: 3rd December 2007 – 7th February 2008 2.514 applications, from which 1.467 won 2nd round: 15th September 2009 – 31st October 2009 6.145 applications, from which906 won

23. Installation aid Non-refundable subsidy, the amount depends on the planned size (in ESU) of the farm in the 4th year: 4 - 6,99 ESU: 20 000 euro 7 - 9,99 ESU: 30 000 euro above 10 ESU: 40 000 euro 90% of the subsidy: advanced payment 10%: after reaching the size

24. Criteria for eligibility aged between 18-40 first time farming (establishment of a new farm or take-over) agricultural education …

25. 10 ESU in hectares

26. Early retirement 1st round: - 3rd December 2007 – 15th January 2008 - Only 61 applications, from which 36 won - In the Rural Development Plan there is a target number: 4500 (In Germany: 17.000)

27. NHRDP 2007-2013 European Agricultural Fund for Rural Development Axis 1 Competitive- ness Axis 2 Environment + Land Managem. Axis 3 Economic divers. +Quality of life Axis 4 LEADER 48% 31% 12% 5%

28. Budget of the NHRDP Forrás: Vulcz (2009)

29. 3. Needs for the CAP reform

30. Foundation of the CAP 1957 Treaty of Rome agriculture a special concern: - low incomes and declining rural areas - high share of employment and of consumers expenditure - food security • strong political lobby

31. CAP Objectives Article 33 of the Treaty of Rome • increase agricultural productivity to ensure a fair standard of living for agricultural producers • stabilise markets • assure availability of supplies • ensure reasonable prices to consumers

32. CAP principles • Single market: free trade in agricultural products; • Community preference: a preference for products from the EU (by discouraging imports); • Financial solidarity: regarding the CAP, all members have to pay

33. CAP objectives and tools Tools • Direct Support • Intervention prices • Export subsidy • Consumer Incentives (for dairy) • Import levies Objectives • Increase Productivity • Standard of Living • Stabilize Markets • Guarantee Supply • Reasonable consumer price

34. Mechanisms to achieve these Objectives Isolate the EC Market from competing imported products World Market EC Market World Market

35. Set high target prices which the regulator hopes the farmer will receive TARGET PRICE

36. Set a Low Intervention Price at which the Regulator will always purchase TARGET PRICE INTERVENTION PRICE

37. Market Functions within the Ceiling and the Floor: actual prices vary according to supply and demand TARGET PRICE INTERVENTION PRICE

38. If there is too little supply and prices rise too much, then the border protection is changed to allow for supplies from outside TARGET PRICE Tariffs are lowered or supply is increased through TRQs INTERVENTION PRICE

39. If there is too much supply then the regulator intervenes to withdraw products from the market TARGET PRICE Subsidies for sales on the world market Tariffs are lowered or supply is increased through TRQs INTERVENTION PRICE 39

40. CAP impact • farmers responded by intensifying production in supported sectors • surpluses required increasingly heavy expenditure - grain and butter mountains, wine lakes, cost of export refunds etc • friction with other suppliers to the world market who were not so reliant on subsidy - EU accused of dumping subsidised products on LDC • in some cases intensification of agricultural production led to environmental damage

41. Benefits from the CAP • Self-sufficiency of food supplies in the Community - agricultural output increased greatly. • Food security was assured. • Agricultural markets were stabilised. • Farmers enjoyed a fair standard of living - although large farmers and farmers in the North of Europe benefited most from this situation.

42. What went wrong? • Guaranteed prices - overproduction; • Problem of surpluses began to emerge; • Big farmers produced more and thereby earned more money; small farmers needed assistance earned less; • In order to increase output - soil with excessive amount of fertilisers, herbicides: environmental problems

43. Quotas, levies, tariffs in agricultural trade - problem for exporters to the EC and to promote open trade and further liberalisation. • Dumping on world markets distorted prices and antagonised non-EU producers. • Consumers however lost out - high food prices

44. Productivity Competitiveness Sustainability The Crisis Years The Early Years The 1992 Reform CAP Reform2003 Agenda 2000 Deepening the reform process Competitiveness Rural Development Reducedsurpluses Environment Incomestabilisation Budgetstabilisation Food security Improvingproductivity Market-stabilisation Incomesupport Overproduction Explodingexpenditure Internationalfriction Structuralmeasures Market orientation ConsumerConcerns Ruraldevelopment Environment Historical development of the CAP

45. Milestones of the CAP 1957: Treaty of Rome 1968: Common Market Organizations 1984: Supply control (dairy quota, set aside) 1992: Mac Sharry reform: price reductions and compensatory payments (area; livestock) 2003: Single Payment Scheme, Cross Compliance; Rural Development Policy

46. Expenditures of the EU in 2000 Administration 4,62 % Monetary reserve 1,03 % External actions 6,76 % Common Policies 6,26 % CAP 45,23 % Structural Funds 36,10 %

47. EU Budget 2009

48. Reasons for CAP reforms EU net agricultural importer > net exporter Surpluses and increasing expenditure in 1970s & 80s Changing needs and wants of society Other roles of private and public sectors WTO-negotiations and EU-enlargements

49. Modulation CAP policy areas today CommonAgricultural Policy (CAP) • Pillar: • Market measures (sugar, wine, fruit & veg, etc.) • Direct payments (“decoupled“ from production) • Cross Compliance standards 2. Pillar: RuralDevelopmentPolicy Multifunctional agriculture Food Environmental function Rural function

50. Adjusted SPS Safety net ? Direct payments Markets Price support/ Quotas reform GAEC Axis 1 (structural adjustment) Axis 2 (environment) Rural development Axis 3 (territory and diversification) The policy issues in a nutshell... Phase-out ? Revenue insurance ? Income Phase-out ? Public goods Structural adjustment Future ?