Opinion of the Committee of the Regions on 'A policy for upland agriculture in Europe` (97/C 379/12)

THE COMMITTEE OF THE REGIONS,

having regard to its decision taken on 15 January 1997, under the terms of the fourth paragraph of Article 198c of the EC Treaty, to deliver an opinion on a policy for upland agriculture in Europe and to entrust Commission 2 (Spatial Planning, Agriculture, Hunting, Fisheries, Forestry, Marine Environment and Upland Areas) with the task of preparing the opinion;

having regard to the draft opinion (CdR 178/97 rev.) adopted by Commission 2 on 25 June 1997 (rapporteur: Mr Durnwalder);

whereas upland areas in the European Union are highly important for the entire population, both as a living environment and as a source of recreation;

whereas upland agriculture is of fundamental importance because of the distinctive, high-quality foodstuffs produced there;

whereas upland agriculture also makes an essential and irreplaceable contribution to the preservation and development of upland areas;

whereas the disappearance of upland farms has a far-reaching effect on the entire socio-economic structure of upland areas;

whereas the globalization of agricultural and food markets will pose a particular threat to small upland farms if special measures are not taken to help this type of enterprise;

whereas a specific agricultural policy for upland areas is therefore needed, and whereas such a policy would include derogations from the rules on competition as allowed under the Maastricht Treaty;

whereas the aim of this specific policy should be the introduction of a comprehensive, long-term action programme for upland agriculture and upland areas;

whereas the Council of Europe has drawn up a European Charter on mountain areas and the Committee of the Regions delivered an opinion thereon on 21 April 1995 ();

whereas the resolution adopted by the European Parliament ten years ago on 27 May 1987 and the subsequent opinion adopted by the Economic and Social Committee on 28 April 1988 both confirmed the EP's and ESC's support for a comprehensive approach to the problems of upland areas;

whereas the Common Agriculture Policy is coming under renewed scrutiny, partly because of the new WTO negotiations;

whereas the EU's structural policy is set to develop in a new direction when the structural reform scheduled for 1999 is carried out;

whereas there is a danger that the individuality and distinctive features of upland areas will then disappear or be completely neglected,

adopted the following opinion at its 19th plenary session on 17 and 18 September 1997 (meeting of 18 September).

1. Objectives of an upland agricultural policy

1.1. The second paragraph of Article 130a of the EC Treaty sets out the following objective:

'In particular, the Community shall aim at reducing disparities between the levels of development of the various regions and the backwardness of the least-favoured regions, including rural areas.`

1.2. Article 39(2a) of the Treaty also states:

'In working out the Common Agricultural Policy ..., account shall be taken of the particular nature of agricultural activity, which results from the social structure of agriculture and from structural and natural disparities between the various agricultural regions.`

1.3. The aim of the new policy on upland agriculture is to develop and adapt mountain and hill-farming Directive 75/268/EEC (), bringing it into line with the new general economic situation.

1.4. This entails offsetting the natural disadvantages of upland agriculture and enabling it to fulfil its role of preserving and shaping upland areas as a living environment; agricultural production in particular should be supported since it is the most important factor in achieving this goal.

1.5. In this connection it needs to be made perfectly clear that measures to protect and preserve upland areas as a living environment and natural habitat have a positive and direct effect on the safety of population centres not only in upland areas themselves but also in the surrounding hills and valleys, (protection against erosion, lessening of flood danger, etc.).

1.6. To achieve all of this it is proposed:

- to support the manifold functions of upland agriculture by means of a coordinated package of measures,

- to pursue a long-term agricultural policy in upland areas,

- to invoke the principle of subsidiarity in giving the regions themselves as much freedom as possible regarding resource utilization and the procedures needed to cope with the wide variety of situations encountered in individual upland areas,

- to promote and support synergies and cooperation between different economic and cultural sectors,

- to facilitate and promote the convergence of Community and national policies on upland agriculture,

- to guarantee the long-term funding of measures to support and develop upland agriculture.

2. Proposals

In the light of the above, the Committee of the Regions would submit the following proposals:

2.1. General comments

2.1.1. The proposals for an all-embracing policy on upland areas should include both sectoral as well as general policies (i.e. cross-sector policies), the aim being to try to make sure that the two types of policy are coordinated. The first essential requirement here is to adequately define upland areas and then to apply the necessary measures within those delimited areas. The existing range of instruments have proved their worth and so should not be thrown overboard but improved. To be more precise, the overall future development of upland areas should be secured by four interrelated policies:

- a policy designed to safeguard the various activities pursued in upland areas;

- a policy on agricultural structures;

- an overall policy on regional structures;

- a policy on agricultural markets.

2.1.2. The particular emphasis given to each policy will vary according to the characteristics and socio-economic structures of the upland area in question.

2.1.3. This naturally presupposes that upland areas as a whole are recognized as a category eligible for aid and that it is the Member States or regions themselves who carry responsibility for laying down development priorities.

2.2. Fixing the boundaries of upland areas

2.2.1. In principle, the best way to approach this is to try to work out a definition based on natural features such as altitude, incline, remoteness from centres of economic activity, population density, etc. The 'European Charter of Mountain Regions` also proposes the following definition:

'Areas whose environmental characteristics such as altitude, sloping terrain and climate create specific living conditions `.

We would also refer to the recommendations of non-governmental organizations on the basis of Agenda 21 which draws attention to the far-reaching importance of upland regions as a natural resource in Europe's ecosystem.

2.2.2. The previous definition provided under EEC Directive 75/268/EEC was confined to the establishment of administrative units (local government districts and land-registry areas) and no attempt was made to differentiate between individual farms within these administrative units.

2.2.3. The difficulties and permanent natural handicaps confronting individual upland farms are a key factor in the necessary task of fixing differentiated rates of aid; the existing definition should therefore be accompanied by support for the completion of a record of permanent natural handicaps facing each individual farm (e.g. cadastral survey or land register of upland farms).

2.3. Proposals concerning the organization of agricultural markets

2.3.1. Upland agricultural production is central to the picture we currently have of the type of upland area we should like to see preserved. An upland policy without upland agriculture is inconceivable since agricultural and forestry production is, and will continue to constitute, the basic source of income for upland farming families. If we look at rural depopulation, it becomes more and more clear that landscape conservation measures over wide areas will only be viable if accompanied by a reasonable level of production. This, however, presupposes adequate support for upland production and marketing - which are particularly disadvantaged because of harvesting and transport problems and because the globalization of agricultural markets means that products from low-cost areas tend to fare better on world markets. Continuation of the Common Agricultural Policy beyond the next round of WTO negotiations will guarantee the conditions necessary to implement specific market organization measures in the upland agricultural sector. Support must therefore be tailored to the three essential elements of agricultural market organization and their interaction:

- rules governing the volume of production premiums and (quota rights);

- compensatory payments;

- quality guarantees.

2.3.2. Guaranteeing production possibilities

This must start with livestock farming since cattle and sheep raising on upland meadows is crucial to the preservation of upland areas. It is therefore of vital importance for these areas that the milk quota system which ends on 31 March 2000 be extended beyond that date. With this in mind, upland areas should be given priority treatment in respect of the allocation of production rights and milk quotas, based on the actual acreage farmed.

2.3.3. Compensatory payments

2.3.3.1. Livestock production costs in upland areas are up to 30 % higher than elsewhere whilst marketing costs are also substantially higher. In such areas cattle and particularly dairy farming constitutes the main source of agricultural income although revenue has been particularly hard hit by a fall in prices over the last few years.

Moreover, unlike large-scale crop production, beef farming or sheep-rearing, the rearing of dairy cattle on pasture land receives no compensatory payments.

2.3.3.2. Since a lasting improvement in incomes does not seem to be possible under conventional market and price policy instruments, it is essential to take immediate steps to introduce a supplementary incomes policy within the framework of the common milk and milk products' regime. In doing so, additional, environment-related compensatory payments should be made to adequately supervised organic farms.

2.3.3.3. In the short term this would have to take the form of a premium for female cattle as well as compensatory payments for the higher, geographically-related transport costs incurred in upland areas. In the long term, however, sustainable incomes will be secured more effectively by making direct agricultural income support payments and placing the relevant funds under the control of the Member States or, depending on the constitutional position of the state concerned, of the regions (see opinion of the Committee of the Regions of 17 January 1997 on the CAP and eastward enlargement ().

2.4. Labelling of typical upland products

2.4.1. Identifying and labelling typical upland products is the best way of developing regional marketing strategies. We would therefore propose that rules on the protection of trade marks be further refined and that special protection be given in the first place to typical upland products such as local cheeses which have been processed and packaged locally.

2.4.2. At a more general level we need to establish a Community legal framework for foodstuffs from upland areas and make the necessary provision for the introduction of labels protecting and guaranteeing the origin and quality of local products, the aim being to protect the concept of 'upland` and the geographical designations associated therewith. The best line of approach here would be to take on board the ideas contained in the Committee of the Regions' opinion of 18 September 1996 on promoting and protecting local products () - a trump-card for the regions.

2.4.3. In this connection, adequate support needs to be given to the establishment of a quality guarantee system (quality management) as the precondition for introducing a quality and origin labelling scheme.

2.5. Proposals for a policy on preserving activities in upland areas

2.5.1. Preservation of the manifold functions of upland agriculture undoubtedly depends on the continuing viability of upland farms. A number of different approaches have so far been adopted to safeguard their livelihood. Compensatory payments are intended to offset the natural disadvantages faced by agricultural products when competing on the markets, whilst flanking measures are designed to underpin the new CAP and at the same time take account of ecological requirements and the need to preserve the landscape. However, linking the various payments to farm acreage puts small farms - the predominant type of farm in upland areas - at a disadvantage. Hence the need for additional measures.

2.5.2. We would therefore propose that an independent pillar be created. Such a pillar, which would support the policy on maintaining activities in upland areas, would be based on the existing compensatory payment scheme as well as the CAP's flanking measures, but in some fields existing provisions would be revamped or extended. Administrative solutions with much less red tape should be sought. More particularly, the Committee of the Regions considers the following measures to be necessary.

2.5.3. Support for maintaining activities in upland areas

2.5.3.1. The acreage-related compensatory allowance should be accompanied in upland areas by the payment of a basic premium to individual farms, with provision also made for part-time farmers, for the purposes of maintaining activities of upland areas. This premium, which would be co-financed by the Community and Member States, would be set at a level that took account of the natural handicaps and socio-structural situations facing upland farms, other criteria applicable to the region in question, as well as the need to safeguard jobs on farms and so maintain the total labour force required in upland farming.

2.5.3.2. Payment of this basic premium would make it possible to finance all the various activities engaged in by upland farms in the interests of preserving upland areas and which are of benefit to society as a whole.

3. Community aid schemes for forestry measures in agriculture (Regulation (EEC) No 2080/92) ()

3.1. These aid schemes must contribute to the preservation of agricultural activities in rural areas and not indirectly lead to the depopulation of such areas. Regulation (EEC) No 2080/92 should therefore be further refined and concentrate more on the economic management and upkeep of upland forests and of woods planted for ecological protection purposes. The economic management and replacement of plantations designed to protect the landscape requires specific support in the form of a set of regulations comprising forestry measures compatible with the environment. Hence the need for a long-term aid programme which would offer the upland farmer appropriate rewards for the recognized upland activities he performs.

3.2. This means in particular giving more support to upland farmers in preserving the environmental role of woodlands (in countering erosion in water supply etc.) and in pursuing sustainable forestry; at the same time local conditions should be taken more into account by appropriate regional administration.

4. Support for agricultural production compatible with protection of the environment and maintenance of the countryside (Regulation (EEC) No 2078/92) ()

4.1. Whilst the priority in favourable geographical locations will have to be given to measures backing up the policy on agricultural markets (reduction of surpluses), the emphasis in upland areas will have to be placed on protection of the natural environment, and particularly the long-term utilization of steep hillsides. Measures taken under this support mechanism should also include the preservation of cattle, horse, donkey, sheep and goat breeds which, if not exactly faced with extinction, have certainly declined sharply in number, as well as the genetic heritage of each one of these breeds found in sub-breeds, local varieties, etc. The payment of benefits and the provision of aid will likewise have to form part of a long-term programme where general premiums linked to farm size are replaced by the more logical idea of financing environmental measures as well as concrete measures for maintaining agricultural activities, as approved in the programme. Examples of this would be the maintenance of private and public lanes, the continuation of intensive farming practices and preservation of the landscape. This process should also be based on the principles of Agenda 21 and local Agenda 21.

4.2. All these premiums and compensatory allowances could be consolidated into one direct payment to be made to individual farms, on the basis of regional points systems for the life of the programme. Such a method would considerably reduce administrative costs.

4.3. The Committee of the Regions urges the Commission to set up pilot schemes to find out whether such regional points systems would work in practice.

5. Proposals concerning the policy on agricultural structures

5.1. At the outset, we would wish to make it clear that an integrated policy on rural and upland areas is not a substitute for the CAP but an essential adjunct thereto. Secondly, structural aid earmarked for individual farms (hitherto Objective 5a) must be combined with integrated structural concepts (hitherto Objective 5b) in order to put in place a long-term development strategy. The social fabric of upland areas also needs to be underpinned within the framework of horizontal aid measures. In particular, this means helping farmers faced with specific problems stemming from the size or structure of their farms, or from the deterioration of farming conditions. Specific aid programmes geared to workable structures therefore need to be developed since, in upland areas and particularly extremely difficult upland areas, there is little or no scope for structural adjustment through farm expansion.

5.2. As far as the overall aid programme is concerned, the formal solution of specific aid for targeted areas would seem to be the best although by no means an obligatory solution. The most important thing is to create an institutional framework (separate budget line) which would best meet the specific concerns of upland areas. This would also entail 'regionalizing` the complementary agricultural incomes policy, on the basis of the principle of subsidiarity, in order to be able to respond more readily to regional differences and needs within individual upland areas. What is needed in short is an overall package of measures aimed at holding on to seemingly irretrievable jobs in a high-quality environment. In protecting jobs of general interest, preservation of the environment must be tied in more naturally with an adequate level of business profitability.

5.3. The essential objective of such an overall structural concept would thus be to keep agriculture alive whilst at the same time preserving a living environment of great value to the whole of society.

5.4. With these requirements in mind, structural improvement plans for individual farms must be coordinated closely with integrated regional initiatives. There is no justification for the a priori withdrawal of EU co-financing for specific measures, such as happens with the current restrictions imposed under Objective 5a, since mountain areas pose distinct problems which cannot be subject to the rules on competition applicable in favourable areas.

5.5. Structural funds can only be used effectively in upland areas if they are not shackled by the rules on aid under the competition policy.

5.6. The same conditions should therefore apply to packages of measures for individual farms as to integrated structural programmes for whole upland regions.

5.7. Structural aid measures for individual farms

More particularly attention should be focused within the existing budget line on the following parts of the aid scheme for individual upland farms:

- premiums to offset permanent natural handicaps;

- aid for individual farm investment;

- special measures to help young farmers;

- aid for the processing and marketing sectors;

- promotion of product quality and protection of specific geographical designations;

- aid for public investment to improve meadows and high pasture land.

6. Premiums to offset permanent natural handicaps (compensatory allowances)

6.1. The compensatory allowance forms a direct link between compensation for market-related disadvantages and the payment for ensuring that upland farms continue to perform their many upland functions. Linking the premium with livestock farming makes it particularly clear that the survival of this branch of agriculture in upland areas also makes it possible to preserve all the different types of activities in upland areas. It would make sense in this respect to tailor the approach to the circumstances of individual areas.

6.2. As with the premium for environmentally-compatible measures in upland areas, so the ceiling for the compensatory allowance should limit only the level of EU co-financing and not the absolute level of aid. Member States after all should have the requisite freedom to put their own stamp on regional aid mechanisms.

7. Aid for individual farm investment in upland areas

7.1. The obligatory distinction between farmers pursuing activities as a principal occupation and those pursuing them as a secondary occupation needs to be removed and aid provided in a more flexible manner since upland farmers pursue overlapping activities in a given geographical area. This is why limits on working time spent on activities outside the upland farm should be interpreted more flexibly than would be the case in more favourably situated farming areas. On the other hand this naturally presupposes that a clear distinction is made between farmers and non-farmers (e.g. amateur gardeners) and that the deciding factors in determining farmers' eligibility for aid are permanent residence on the farm and all-the-year-round farming.

7.2. There are consequently no grounds for arguing that the granting of aid should be contingent on the existence of a farm improvement plan.

7.3. Specific aid should be available for the establishment and maintenance of facilities for various non-agricultural activities on the farm.

7.4. The rates of aid currently in force take only limited account of the higher costs involved in working in upland areas, e.g. the costs of transporting building materials or using very expensive machinery.

7.5. The Committee of the Regions therefore considers it necessary to introduce a system whereby in the short term the aid ceiling is raised and in the longer term the regions themselves are endowed with the relevant decision-making powers within the limits of their own sphere of competence.

8. Special measures for young farmers

8.1. Generally speaking, an active job-security policy for young farmers should be incorporated into multiannual programme planning and support frameworks (cf. the Committee of the Regions' opinion of 18 January 1996 on 'The regional consequences of the CAP reform`) ().

8.2. Multiple jobbing is often the only way of ensuring that young farmers do not abandon their farms. It is therefore totally unjustified to preclude young farmers from aid just because they engage in a secondary occupation.

8.3. Serious thought should be given to the possibility of raising the level of co-financed aid for young farmers setting up in farming. Young farmers who take over a debtridden farm clearly deserve special consideration.

9. Support for the improvement of structures for the processing and marketing of agricultural products

9.1. The Committee of the Regions calls upon the European Institutions to adjust Regulation (EEC) No 866/90 () to cover the needs of upland agriculture. Storage and marketing facilities in upland areas tend to be on the small side and based on local, high-quality products (cf. point 2.4) so that they fail to meet the EU Commission's criteria for the selection of investments to improve processing and marketing structures (Commission Decision of 22 March 1994). Upland areas need a specific aid scheme geared to small-scale marketing facilities whereby less stringent conditions can be imposed, first and foremost because of costs.

9.2. In smaller cooperative-type ventures in upland areas, internally generated funds are in great demand but are hard to come by because of the lack of available financial resources. The Committee of the Regions therefore feels that producer groups in upland areas should receive financial help through an operating fund co-financed by the EU or by the Member States or regions (see new COM for fruit and vegetables). The level of co-financing would depend on the economic viability of the regions in question. The operating fund co-financed from the public purse would be used specifically for investment, environmentally-friendly methods of production, marketing and eco-product lines.

9.3. Finally, the Committee considers that biomass should be used more extensively as a renewable energy source. Using wood as a natural source of energy in this way can also play a considerable role in the maintenance of upland agriculture. Regulation (EEC) No 867/90 () should thus be adapted accordingly.

10. Proposals for an integrated policy on regional structures in upland areas

10.1. Full use of the internal endogenous dynamics of upland areas is a 'sine qua non` for an integrated, long-term development strategy. Interacting Community policies (CAP, policy on product quality, structural policy) along with cross-sector solutions have a decisive role to play in this area. Thus, for example, initiatives designed to protect and promote local products are of particular help in supporting the common organization of the agricultural market, whilst at the same time offering the best possibilities for reinforcing cooperation between different economic sectors in rural areas. Naturally, the harmonization of various programmes such as the 5b programme, the Leader programme, pilot projects, etc. is also of great importance and could find concrete expression under a separate budget line within the framework of a single uniform upland areas programme.

10.2. By adopting an approach of this nature it becomes possible to coordinate structural programmes, Community initiatives and innovative measures within an overall programme. Furthermore, the merging of all three structural funds under a single budget line would lead to greater transparency and make for much simplified procedures.

10.3. However, as far as the actual definition of an upland area is concerned, geography is the determining factor. The existing geographically-based definition of an upland area can therefore serve as a basis for any new definition within the context of agriculturally less-favoured areas. To be eligible for aid under specifically targeted schemes, upland areas must therefore meet the geographical definition contained in Directive 268/75/EEC and fulfil at least two of the four criteria based on the European Charter on mountain areas. These criteria, which are listed below, would be weighted according to current applications and a future potential hitherto unexploited because of an inadequate labour force and poor funding.

a) A low population density with isolated farms and/or a pronounced trend towards engaging in agriculture as a secondary or additional activity.

b) A particularly fragile and endangered eco-system and the consequent need to protect natural resources (particularly water).

c) Considerable threats to the area as a living and economic environment (population centres, infrastructure, etc.), as a result of natural hazards, particularly in the form of fast-flowing mountain streams, avalanches and mudslides.

d) Particular importance of the area as a source of recreation and an ecological reserve for city dwellers.

10.4. Given the considerable disparities between regions, it is necessary to draft integrated plans for each individual area. These plans would take account of the distinctive features and endogenous development potential of the area in question. To this end the Member States and regions need to be given autonomous powers and instruments to be able to determine the form taken by aid measures and to be able to allocate structural fund appropriations on the basis of key thematic and geographical priorities. What is needed to help bring into existence an effective policy for upland areas is the coordinated management of financial channels, the use of synergistic effects and the assignment of the funds thereby released to a special permanent fund.

10.5. In addition to tackling problems under the existing Objective 5b approach, the following areas also deserve special mention:

- the creation and safeguarding of jobs for farmers engaged in secondary or additional occupations (particularly tertiary sector activities such as tourism, trading, the environment and culture);

- development and support for relief services;

- specific aid measures for female farmers;

- specific aid for farming in Alpine meadows and pastures;

- measures to promote forestry;

- measures to preserve and protect the natural environment (protection against natural dangers);

- the setting up and maintenance of vital community projects, including local authority schemes, particularly in the field of infrastructure;

- support for a comprehensive water supply and distribution policy in upland areas;

- measures to protect the cultural heritage, e.g. the use of farmhouses of historical and architectural importance, the creation of cultural centres and the development of agrarian tourism (meeting places, museums, etc.);

- measures to aid the development and use of information technology to support remote economies.

The Committee of the Regions attaches particular importance to subsidiarity, and hence the need to ensure that endogenous potential is developed in the areas best suited thereto, namely the upland areas themselves.

11. Conclusions

11.1. Following the reform of the Structural Funds in 1988 it became possible to link the Common Agricultural Policy to regional and environmental aid, whilst incorporating the social dimension. Upland areas - and particularly upland agriculture with all its many and varied functions - did not however receive any special treatment but tended to be lumped together with other structurally less-favoured areas. Because of this the distinctive features of upland agriculture have hitherto received only limited attention.

11.2. By contrast, our proposed policy for upland agriculture attempts an overall approach to problems relating specifically to upland agriculture and its future viability, the aim being to secure the long-term future of upland areas as a living environment for all sections of the population.

Brussels, 18 September 1997.

The Chairman of the Committee of the Regions

Pasqual MARAGALL i MIRA

() OJ C 100, 2. 4. 1995, p. 22.

() Replaced by, or incorporated into, Regulation (EC) No 950/97 of 20 May 1997 - OJ L 142, 2. 6. 1997, p. 1.

() OJ C 116, 14. 4. 1997, p. 39.

() OJ C 34, 3. 2. 1997, p. 8.

() OJ L 215, 30. 7. 1992, p. 96.

() OJ L 215, 30. 7. 1992, p. 85.

() OJ C 129, 2. 5. 1996, p. 15.

() OJ L 91, 6. 4. 1990, p. 1; OJ L 118, 9. 5. 1990, p. 46.

() OJ L 91, 6. 4. 1990, p. 7.