Proposal for a Young Farmers’ Package in the CAP post-2013
The Communication of the European Commission on the CAP post-2013 was officially released mid-November 2010. This Communication develops general guidelines upon which the CAP post-2013 will be developed. In that context, CEJA welcomes the explicit references to young farmers in the documents and calls for a strong ‘Young Farmers Package’.
Reference to Young Farmers in the Communication
1. Under the chapter ‘What are the challenges’, the document recognised that the ‘Vitality and potential of many rural areas remain closely linked to the presence of a competitive and dynamic farming sector, attractive to young farmers’.
2. Under the chapter ‘Reform orientation’ and under the heading ‘Rural Development’, the document states that “Addressing the specific needs of Young Farmers and new entrants will be a priority."
CEJA calls for an ambitious European policy on generational renewal in the agricultural sector. The demographic context of the agricultural sector demonstrates the urgency and need of an ambitious policy at EU level. Currently only 7% of agricultural holders are under 35 years old in the EU27 and in some Member States, the situation is even more critical. At present, one holder out of three is at least 65 years old in the EU-27 and many will be retiring in the coming years. This amounts to 4.5 million farmers over the age of 65.Access to land, access to credit, difficult predictability and low profitability are the major barriers to entry for new comers and young farmers. In that respect, installation policy needs to be designed and implemented at EU level, in parallel to an ambitious European employment policy in the agricultural sector.
CEJA therefore calls on decision-makers to introduce in the legislative framework for the CAP-post 2013 a combination of measures under Pillar I and Pillar II supporting renewal of generations in the agricultural sector. In particular:
• Under Pillar I, a top-up payment for young farmers should be added in addition to direct payments;
• Under Pillar II, measures for young farmers should be reinforced and re-balanced. The cofinanced budget should be composed of 20% coming from Member States and 80% from EU level. Preferential access to credit should be given for innovative projects and projects for young farmers and new entrants.
Young farmers in the new CAP: Combination of measures under Pillar I and Pillar II
CEJA welcomes the reference made to young farmers in the Commission Communication on the CAP-post 2013. CEJA also welcomes the recent declarations made by Commissioner for Agriculture and Rural Development Dacian Ciolos on the need to better target active farmers and to design better policies targeting young farmers and new entrants. CEJA calls for an ambitious European wide policy reinforcing the renewal of generations and supporting new entrants and young farmers in the sector. To achieve such objectives, a combinationof measures under Pillar I and Pillar II is needed.
Measures under Pillar I
CEJA notes the proposal of the Commission to re-organise the distribution of direct payments under Pillar I, that would combine a system of basic income payment and various payments linked to the situation of the farmer. Such re-organisation of Pillar I leaves the possibility to include another option, targeting generational renewal. A specific payment should be designed in Pillar I targeting young farmers, in the form of a top-up payment (based on the overall payment) for a limited period of time.This top-up payment would concretely demonstrate the commitment of decision-makers to support the renewal of the generations in the agricultural sector.CEJA also proposes under Pillar I that Member States be able to establish at national level reserve which guarantees to young farmers a ‘fair’ access to the future direct payments. The aim of the reserve is to facilitate setting up in agriculture.
Measures under Pillar II
In the Communication, installation policy remains part of Rural Development programmes and under Pillar II. CEJA would like to stress that in many Member States, installation policy is not implemented, due to lack of national budget or difference in national priorities. CEJA regrets that the renewal of generations and young farmers are not considered as a priority by many Member States and urges decision-makers to voice that installation policy is a priority at EU scale. In addition, it should be stressed that installation policy contributes to maintain and develop jobs.
Statistics show that one farmer can create up to eight jobs in the agro/environmental and technical areas.CEJA therefore requests that the current situation be revisited, to guarantee that installation aid is fully used across the EU and specific needs of new entrants and young farmers are taken into consideration. Member States should be bound to accept applications from young farmers for supportfor investment, provided that the business plan is accepted by local authorities. Should Member States refuse to support and provide installation aid, they should be bound to motivate their choice and report to the Commission and to Young Farmers’ organisations.
CEJA urges decision-makers to introduce a ‘Young Farmers package’ in the proposal. The Young Farmers package should be composed of different elements covering financial support, education and training, support to investment and innovation.
• A strong budget under a revisited co-financing system
A strong budget under the new CAP should be available for measures targeting renewal of generation and young farmers entering the sector. A revised ratio of co-financing should be accepted, so as to give a real opportunity to Member States to prioritise renewal of generation. A ration of 80% coming from EU level and 20% from national level should replace the current 50/50. The capping of installation aid should also cease. In some Member States, only part of the 70 000euros are made available to young farmers and the amount is capped; this situation is not acceptable and the amount of aid should be available to all, in the ‘old’ as in the ‘new’ Member States.
• Bound Member States to use existing programmes
Member States should be bound to use existing funds available under Rural Development programmes. In the latest programme covering the period 2009-2013, financial engineering funds have not been fully used. Concretely it means that some agricultural funds are lost and will not be used to support actions under the various axes of rural development funds. CEJA therefore calls to make mandatory the use of such funds, with a priority for young farmers. In addition, CEJA calls Member States to include installation policy as priority in their national rural development plans they submit tothe Commission. These plans should be available to national young farmers’ organisations which should have the possibility to question the validity and relevance of the national programmes.
• Strong support to investments for innovation, competitiveness and clusters
Installation aid should include a preferential access for young farmers to investment funds available under Rural Development. Subsidised loans should cover 80% of the investments made by young farmers or new entrants when linked to innovation, investment in production materials and methods aswell as 80% of investments associated with buying land (provided that there is a business plan). Subsidised loans should also be made available for young farmers and new entrants entering into cooperation, clusters or network to better market their products.
• Accompanying measures for young farmers over a certain period of time
The installation aid could be given when the young farmer starts his business. However, if he/she prefers to receive the aid gradually, over 5 years, this option should also be possible. This option will support the young farmer during the first years of his/ her business project.
• Education and training vouchers
Installation policy should be seen as far-reaching and comprehensive to support the renewal of generations in agriculture. It should therefore also include ‘knowledge vouchers’, to be used by young farmers, on their own demand and according to their own needs. These vouchers could be used for advisory services including training for new methods of production, diversification on the farms, phytosanitary training, direct selling and marketing training, etc. Advisory services should be implemented as soon as a certain quotas of requests from young farmers have been registered. The ‘Young Farmers’ package should also include a European training programme for young farmers, including the possibility to do a traineeship abroad. This could take the form of a specific ‘Erasmus forYoung Farmers’ programme available to young farmers before they take over a farm and enter the business.
• Faster and better access to information
Young farmers should have faster and better access to information regarding rural development funds. For example, in steering committees, Young farmers’ organisations should be systematically represented. In addition, applications sent to Member States from young farmers to receive support for investments should be examined as priority cases by the Member States, and young farmers shouldbe able to receive a clear answer in a short time.
• Early retirement scheme
The early retirement scheme, linked to installation of young farmer and/or new entrant should continue under the CAP post-2013 as it has proved critical to support farm takeover and transfer of land to young farmer(s).
The demographic situation of the agricultural sector in Europe should give great concerns to decision makers.While on the average, only 7% of farmers are under the age of 35 years old, the situation is more dramatic in some Member States. Without a strong ambitious European-wide policy supporting the renewal of generations, the EU runs the risk to confront itself with difficulties to achieve food security, territorial balance and improve the vitality of rural areas, as well as preserving the environment and mitigating climate change. CEJA therefore calls on decision-makers to introduce a combination of measures under Pillar I and Pillar II for young farmers and new entrants.
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