Identifier
Created
Classification
Origin
09PRAGUE29
2009-01-14 16:21:00
UNCLASSIFIED
Embassy Prague
Cable title:  

CZECH AND DUTCH AG MINISTERS MEET ON CAP AND DAIRY REFORM.

Tags:  EAGR ECON ETRD EZ EUN 
pdf how-to read a cable
VZCZCXRO6803
RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV RUEHSR
DE RUEHPG #0029/01 0141621
ZNR UUUUU ZZH
R 141621Z JAN 09
FM AMEMBASSY PRAGUE
TO RUEHC/SECSTATE WASHDC 1001
INFO RUEHRC/DEPT OF AGRICULTURE WASHDC
RUEHWR/AMEMBASSY WARSAW 3318
RUEHBS/USEU BRUSSELS
RUCNDT/USMISSION USUN NEW YORK 0259
RUCNMEM/EU MEMBER STATES COLLECTIVE
UNCLAS SECTION 01 OF 02 PRAGUE 000029 

USDA FAS FOR OCRA/SNENON, BBAYSINGER, OGA/PKIENDL
BRUSSELS FOR AG MINISTER COUNSELOR, AGATT STANGE, SPECIALIST POLET
USUN FOR ECOSOC
EU MEMBER STATES FOR AGR AND ECON

SIPDIS

E.O. 12958: N/A
TAGS: EAGR ECON ETRD EZ EUN
SUBJECT: CZECH AND DUTCH AG MINISTERS MEET ON CAP AND DAIRY REFORM.
FORMER EU AG COMMISSIONER FRANZ FISCHLER REAPPEARS IN PRAGUE

UNCLAS SECTION 01 OF 02 PRAGUE 000029

USDA FAS FOR OCRA/SNENON, BBAYSINGER, OGA/PKIENDL
BRUSSELS FOR AG MINISTER COUNSELOR, AGATT STANGE, SPECIALIST POLET
USUN FOR ECOSOC
EU MEMBER STATES FOR AGR AND ECON

SIPDIS

E.O. 12958: N/A
TAGS: EAGR ECON ETRD EZ EUN
SUBJECT: CZECH AND DUTCH AG MINISTERS MEET ON CAP AND DAIRY REFORM.
FORMER EU AG COMMISSIONER FRANZ FISCHLER REAPPEARS IN PRAGUE


1. Summary: On January 12, 2009, Gerritje Verburg, Dutch Minister
of Agriculture, Nature and Food Quality met in Prague with Czech
Minister of Agriculture, Petr Gandalovic. They discussed the agenda
of the U.N. Commission on Sustainable Development, priorities of the
Czech Presidency, and also the situation in the EU dairy sector.
Seperately, January 9, Gandalovic announced his pick for special
advisor during the Czech EU presidency, naming Franz Fischler former
EU ag commissioner. The text of Gandalovic's January 9 announcement
appointing Fischler is reproduced in paragraph 7. End Summary.

--------------
UN Sustainable Development Conference
--------------


2. The 17th session of the UN Commission on Sustainable Development
will take place May 4-15, 2009 in New York. According to a January
12 Agricultural Minister briefing and press statement, Czech
Agricultural Minister Gandalovic would like to take advantage of the
Czech EU Presidency to highlight several issues during this
conference. His main points are to emphasize food security with
regard to sustainable use of natural resources, establish credible
criteria for biofuels, and support second and third generation
biofuels that will not compete with food production. Gandalovic
also wishes to discuss creating jobs in rural areas and fighting
against soil erosion and degradation. If possible, Gandalovic hopes
to attend this meeting himself.

--------------
Ministers discuss Czech
Ag Priorities and Dairy
--------------


3. According to the Ministry's press briefing, The Czech and Dutch
ministers agreed in their meetings on several issues. First, they
wish to work on the quality of food and agricultural products.
According to their statements, quality should include broader issues
than just hygiene and labeling, such as animal welfare, ecological
aspects and sustainability. Another issue both ministers agree on
is the need to simplify and lower administrative and legislative
burdens of the CAP for all stakeholders. These two themes are

agricultural priorities for the Czech's during their EU presidency.



4. Both ministers would like the Common Agricultural Policy (CAP)
after 2013 to be acceptable to tax payers and to be clearly defined.
They agreed that the EU member states must set forth clear
priorities for CAP policy and then discuss actual budgets. The CAP
should be, according to the ministers, strong, efficient and treat
all EU member the same. (Comment: To the Czechs this means that
the system of modulating payments needs to be adjusted so that
everyone who grows the same wheat gets the same subsidy payment.
End Comment). Gandalovic and Verburg also agreed that the Czech
Republic will support cutting the CAP budget in the future. Another
priority of the Czech EU presidency -- the codification of a new
definition of less favorable areas (LFA) and the assignment of
subsidies for these areas -- was not discussed. Substantial parts
of the Czech Republic's agricultural areas are classified as LFAs.


5. Both countries also face challenges in the dairy/milk production
sector. The Netherlands requested a higher milk quota to create a
softer landing for their dairy farmers at the end of the current
phase in of higher quotas. The Czech Republic has been considering
intervention purchases or export subsidies for milk. (Comment: An
unlikely outcome if the current handshake against subsidies holds
while there remains even a shadow of a possibility for a WTO Doha
Round conclusion. End Comment.) The Czech dairy sector needs to
increase its competitiveness. While in the western EU countries,
milk can be produced for the equivalent of 5.5 CZK per liter, Czechs
produce the same milk for 8 CZK. Czech dairy farmers are calling for
more government support.

--------------
Czechs turn to Franz Fishler for help
--------------


6. On January 9, Agriculture Minister Gandalovic met with former EU
Agriculture Commissioner Franz Fischler and invited him to advise
the Czech Republic during its presidency. Fischler will serve as an
unpaid advisor and meet monthly with the Minister. This cable
offers a translation of the Ministry press release announcing its
cooperation with Fischler.

Begin Unofficial Translation

PRAGUE 00000029 002 OF 002



On Friday, January 9, 2009, ex-Commissioner for Agriculture and
Rural Development Franz Fischler met Minister Gandalovic and the EU
Presidency team of the Ministry of Agriculture to discuss the
Presidency priorities, aims and strategies in Agriculture.

According to Fischler, the most significant impact of the current
economic crisis on agriculture is the difficulty to foresee the
development of prices and, obviously, more intense competition.
`Generally speaking, where there is less money among people, there
is clearly more competition among them for who gets what share',
commented Fischler.

Franz Fischler became European Commissioner after McSharry, who was
the first to introduce real reforms to the Common Agricultural
Policy (CAP) of the then EU-12. At that time, reform was needed
because of overproduction due to subsidies and regulated prices, and
the subsequent excessive increase of the costs of the CAP. Central
to McSharry's reform was the idea of bringing agricultural
production back into the market system, to decouple payments from
production, to reduce the regulated prices and to reach the price
level on the global market. Those who today discuss the rules for
the CAP after 2013 are faced with similar tasks. Fischler took up
the underlying ideas of the McSharry reform and, step by step,
carried out a fundamental reform of the CAP. A new system of
programs for rural development was devised to ensure the success of
the accession of Sweden, Finland and Austria. It was Fischler who
initiated the `Cork Conference' in 1996. Its final declaration
became the groundwork for Pillar 2 of the CAP. Fischler also put
emphasis on the shift from quantity to quality in the process of
production of foodstuffs, which is of fundamental importance for the
Czech Presidency's agriculture priorities.

During his term of office, Franz Fischler dealt with several crises
caused by animal diseases (the BSE crisis, foot-and-mouth-disease)
and through his food safety policy managed to restore customer
confidence in European production. 'As a European Commissioner,
Franz Fischler sought to simplify the Common Agricultural policy
mainly through transparent and accessible legislation - and
simplification is one of the priorities of the Czech Presidency in
the agricultural sector', said Czech Minister of Agriculture Petr
Gandalovic.

The term of office of Franz Fischler in the European Commission was
exceptional in many respects due to the reforms that were achieved,
Fischler's influence on the successful negotiations on market
liberalization, and also the unprecedented accession of 10 new
Member States, which was demanding in terms of negotiations on
accession conditions in the field of Agriculture. Today, Fischler
works as a consultant and he has taken an active part in the debate
on the 'Global Marshall Plan'. Together with European Landowners, he
has established the 'Forum for the Future of Agriculture' and he
chairs the discussion on the CAP after 2013 (the first Forum for the
Future of Agriculture was held in March 2008 and a second one is to
take place in March 2009).

End Translation


8. Comment. Gandalovic has successfully identified and moved to
resolve a key element that challenges the Czech EU presidency -
being able to influence commission activities as a smaller member
state. Choosing Fischler to help navigate the commission and EU
councils can assist in bringing to heel the EU's unwieldy
bureaucracy. Even large states grapple with this problem during
their presidencies. This message was cleared by USDA/FAS in Warsaw.
End comment.

Graber