Yes to decoupling, but with caution; larger farms to be encouraged
Irrespective of the revisions that might be made during the CAP review of Mediterranean products, the main outline has already been determined. Does decoupling subsidies from production mean abandonment, as far as Greece is concerned? We face two challenges here. The first is to conclude the review of Mediterranean products, which I imagine will occur in April. The second is to implement the new CAP in Greece. Important decisions on this will be made in May. The main characteristic of the CAP review is that we are moving from financial support for production to support for the producer. This involves important changes which everyone involved in the farming sector – the State, civil service, farmers, cooperatives, producer groups and unions – will have to realize. We cannot continue with the political and social culture of subsidies. These are and will continue to be an important parameter in farmers’ incomes, but not the sole one. Farming incomes are the result of three factors – subsidies, market prices and production costs. As for the latter, I refer to our campaign commitments for specific moves to reduce the price of electricity, fuel, a reduction in VAT from 18 to 8 percent and the interest payment subsidy. It is important that we promote our products not only to third countries or the rest of Europe but within Greece. Our goal in the farming sector is above all social, that is to keep people in the provinces. They need an income but also satisfactory living standards. That is why we have renamed the Agriculture Ministry the Ministry for Agricultural Development and Food. If you were the one to decide the degree of decoupling, what would you decide as best for Greek farming? I wouldn’t exclude Mediterranean products from the broader reform package, as occurred during the Greek presidency. This is where the problem started. What I want to achieve is more flexibility in the European Commission’s proposals, a flexibility that will allow us to have a serious discussion with everyone that has anything to do with the specific products on how to exploit them. There are some products where decoupling can be complete, whereas in other sectors it would be catastrophic. So I have some reservations regarding total decoupling of production from subsidies. The farming deficit in the first half of 2003 rose by 17.5 percent. How can this be turned around? We need a different policy for selling and promoting our products. We have said we will set up a department of the exports promotion organization. This will require a great amount of effort within the country to promote products that meet the high standards of quality, hygiene and safety that consumers expect nowadays. We have promised to promote organic farming. How will you achieve this? At the moment, organic farming accounts for only 0.9 percent of the farming GDP. In other countries, this percentage is as high as 9 percent. Our goal is to arrive at 3 percent within four years, through a policy of promoting organic products and establishing a climate of consumer trust. Agriculture departments often deter producers from getting into organic farming. I found that the relevant central department had no budget and I have ordered that the money be found to get started. So we are starting from zero. By fall, we will have announced specific measures in this direction and at the same time we will exhaust all possibilities provided by Greek and European Union legislation for appellation controllee products. We have some excellent products and we have a duty to promote them. Will you be working with the existing organizations and companies or will you be creating new ones? Right after the Olympic Games, we will be presenting our proposals for reorganization and restructuring the ministry’s central services and the organizations it supervises. However, producer groups and related organizations need to contribute to a healthy cooperative movement. How do you propose to create this «healthy cooperative movement»? (The producers) will have as much support as they need so they can operate within the framework of free competition, and without upsetting the rules of the free market. However, cooperative organizations have a social character, which we will also strengthen. There are regions where cooperative organizations are still the only means, along with the State, for implementing policy. We want the best possible result at the lowest possible cost for the State and producers. How will the farmers themselves implement the changes? The farming sector has many structural weaknesses… The number of farms has been reduced by 5.5 percent over the past three years. The percentage of people working in Greece’s farming sector is about 17 percent, the highest in the European Union, where the average is 4.3 percent. Only 20.3 percent of those working in primary production are under 45 years of age. We have about 800,000 farming units and I say «about» because there is no firm register of farmers or of farms – 73 percent of farms are less than 5 hectares. The vocational training of farmers that has been assigned to the «Dimitra» organization is not in line with the demands of the times, and the National Agricultural Research Foundation (ETHIAGE) has not managed to come up with results of applied research. If one adds the changes taking place in European and international farming, you realize the magnitude of the challenge a new government has to face. And the magnitude of the difficulties. Do you have any specific solutions? Things are not easy and we promise no miracles. However, we have a very clear goal as regards improvements to structures, such as specific measures for land policy. By introducing tax incentives and granting loans under favorable terms for buying and transferring ownership of agricultural land to professional farmers, we will encourage an increase in farm sizes. We will also speed up the procedure of land redistribution by securing the necessary funding, by creating land redistribution services in every prefecture and furthering flexible procedures. The AGROGI SA firm was set up for land policy. What are your plans for it? We planned to abolish it, as it was ineffective. When it was passed by Parliament, we said we did not see the reason for its existence. So won’t it be exploiting the land made available by the new forestry law? We will see, but for the moment I can’t see it. In September, I will be able to give a more specific reply. When the new forestry law was passed, you said that it did not solve problems and might be unconstitutional. Might a new bill be tabled? I believe that a new legislative framework is needed. The minister in charge, Evangelos Bassiakos, is considering an investigative circular and we are waiting to see what the courts have to say on important aspects of the law.