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"We are proud of our farming industry!"

Date:
26.06.14
Location:
Bad Dürkheim
Speaker:
Federal Minister Christian Schmidt

Speech by Christian Schmidt, Federal Minister of Food and Agriculture, at the German Farmers' Day in Bad Dürkheim on 26 June 2014

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Salutation,

This event is a first for me. The German Farmers' Day is regarded as German farming's biggest stage. And the setting does this reputation justice. You have chosen Bad Dürkheim as the venue - and no wonder, as this picturesque little town is surrounded by farmland and forests: bordered by vineyards which produce beautiful wine, and not far from the Palatinate Forest which, as the largest unbroken woodland area in Germany, guarantees superb air quality.

And, as the statisticians tell us, Bad Dürkheim often has the most hours of sun per year in the whole of Germany, resulting in it having a particularly mild climate.

I was happy to come to Bad Dürkheim. I was granted leave for today. In contrast to many of my colleagues from the German Bundestag, who are likewise wholeheartedly committed to agricultural policy, I was able to take time off from the obligations that a parliamentary week - and a budget week to boot - entails. I therefore ask you to pardon any of my colleagues who may not be here today!

My programme is based on what you, Germany's farmers, need in order to be able to have sustainable success:

that consists firstly in a stable political foundation provided by the Common Agricultural Policy, a foundation on which rural farmers can plan for the coming years.

Secondly, it consists of a sustainability concept which on the one hand accommodates social expectations, and on the other hand must be compatible with your economic success.

And thirdly it comprises a way in which market shares can be safeguarded and new markets - from weekly markets to the global market - can be tapped into!

We can already pride ourselves on being the fourth-largest exporting country in the world. I often find myself shaking my head in disbelief at the discussions I hear on whether this is legitimate or not. Just imagine that BMW, Mercedes or Volkswagen cars were only allowed to be sold and driven near where they were manufactured! No, exporting goods to markets with purchasing power is part of the production process in a world economy that is based on division of labour. I do not have a shadow of doubt about that!

I know how what valuable work farmers - and above all the many family farms - perform for us in the countryside, . The appointment of Gerd Sonnleitner as UN Special Ambassador in the year of Family Farming is a great honour for him personally, and at the same time a great honour for all German farming families.

And rural farming should be able to "live responsibility", as you have stated in the title of this Farmers' Day - without ideological hostility, but with active support from policymakers.

Let's be honest: farming is involved in areas of tension which are oversimplified in media reports. The strident tones of certain individuals are often suited to this kind of reporting - but less suited to constructive problem-solving. I hope you will forgive me but you will not be hearing any strident tones from me. But believe me: I am battle-hardened.

Those who have hit the headlines as Ministers of Agriculture in the past have not always achieved a great deal for the agricultural sector.

I am myself a child of the countryside. My parents had a shop selling agricultural goods; the bakery was part of our house. My grandparents had a farm. So I know what animal stalls look like from the inside. That makes a lasting impression: my biographical proximity to rural trade has endowed me with a certain unflappability. That is the effect of being close to the practical realities of rural life. Others may make a lot of noise - I want to provide tangible results. And I do this in dialogue with those involved.

1. Common Agricultural Policy Firm commitments for rural farming

Members of the farming community, how many farmers' days have you experienced over the years where you heard reports on Common Agricultural Policy negotiations?

That, ladies and gentlemen, is over and done with. The core reforms of the Common Agricul-tural Policy are now a done deal. The way is now clear for implementation at national level. Ilse Aigner, Hans-Peter Friedrich and I know that our farmers need firm commitments to provide them with prospects of success in farming. That is what we have committed ourselves to: each of us on his own, but all pulling in the same direction!

Firstly, the most important point: we have been able to ensure that the reform largely retains the direct payments. Approximately 4.8 billion Euros will now be available annually for the German agricultural sector up until 2020. This money is indispensable for maintaining the international competitiveness of the European agricultural sector!

The second point: rural farming should receive further support over and above the direct payments. We will pay a supplement to small and medium-sized farms on the first tranche of hectares in addition to the national basic premium that will be in place from 2019.

We will use another percent of the funds for a payment to young farmers. Consumers in Germany want rural farming, and this support - this needs to be made clear - meets their wish!

The third point concerns the environmental services provided by the agricultural sector. Greening is a core element of this reform. With our decision to link 30 percent of the direct payments to a method of farming that is beneficial for the climate and the environment, sustainability has become even more important.

These are additional services provided by farmers, and we mustn't let anyone play them down!

We have also been able to ensure that farmers do not have the soil dug away from under their feet: we have successfully prevented an obligatory blanket set-aside of valuable arable land!

I think that we have managed to negotiate good compromises for the German agricultural sector in the tough negotiations in Berlin and Brussel, whether in respect of intercropping and the crediting of nitrogen-fixing plants with a factor of 0.7 as ecological focus area (EFA), or in respect of starter dressing and plant protection for legumes which, in line with good agricultural practice, remain permissible!

We have also achieved good compromises regarding the regular turning of earth in bird sanctuaries that are not at the same time FFH sites, and regarding the definition of the active farmer, where the negative list must not get out of hand, and it won't!

These developments in the CAP will provide us with a solid basis for rural farming in the coming years!

2. Sustainability: bringing together social expectations and commercial success

Animal welfare: with a sound scientific basis, and in cooperation with the farming profession

Ladies and Gentlemen, the CAP is an expression of social expectations. We take these seriously. And we take them seriously even when they relate to such highly controversial topics as animal husbandry.

But we must also ask questions of consumers. Because it is not acceptable for consumers to give priority to the price when buying goods and then at the same time to want standards even higher than those prescribed by law. Food must not be cheap; it must instead be worth what you pay for it.

I think it is important to call a spade a spade: meat is an integral part of most of our population's diet. Most of us rely daily on the high-quality products provided by our livestock farm-ers. And it must be part of an honest debate that people who want to eat meat must also allow meat to be produced. Without your work, Ladies and Gentlemen, this would not be possible; your work deserves our appreciation. For my part, my appreciation is expressed in a clear commitment to livestock husbandry in Germany!

Politics and the farming profession must work together to improve acceptance in the population. To improve acceptance, we must make adjustments when criticism is justified - and when criticism is not justified we must explain modern production methods objectively and dispassionately. The German Farmers' Association has recognised this and is acting accordingly. We should be able to make good progress together in this direction!

The social debate on animal welfare is also reflected in the coalition agreement. I warmly welcome this fact, as I consider animal welfare to be one of the key subjects in farming.

We want to work together with the farming profession, to work together via Best Practices and to work together with the scientific community to make progress in improving animal welfare: both in Germany and beyond.

As trade with products does not end at national borders. We cannot, therefore, develop higher standards in Germany while the neighbouring countries lag behind. It is therefore our aim to anchor harmonised, higher standards throughout the EU.

Last week, I met my counterpart in Denmark. As countries with strong agricultural and food industries, Denmark and Germany have similar interests. We therefore wish to intensify this exchange - and include the Netherlands in our talks.

Together we will be able to establish a kind of benchmark for animal welfare. Denmark has achieved considerable success in reducing the use of antibiotics in livestock husbandry. The Danish industry has also announced that it wishes to discontinue beak-trimming for laying hens on a voluntary basis. In Germany there are a number of other initiatives, for instance on voluntary animal-welfare labelling or the German industry's animal welfare initiative.

And it is clear, in Germany and abroad, that we must resolve issues such as the consequences of a ban on piglet castration without anaesthesia or of discontinuing the docking of piglet tails - and preferably resolve them EU-wide.

But a simple ban will not help. We need solutions that prove practicable. To this end we need support from the research community. And my ministry is ready to help provide this support.

Ladies and Gentlemen, we have just passed the 2014 budget for my ministry in the German Bundestag; intensive discussions about the 2015 budget are already underway. When the research funds are allocated, I will secure a share for the German agricultural sector as well. We have already decided to place greater emphasis on animal welfare: twenty-one million Euros for the model and demonstration projects in animal husbandry, 30 million Euros for innovation in sustainable livestock husbandry, and 12 million Euros for minimising the use of antibiotics in the food chain - with these decisions we have set ourselves some good milestones for the coming three years. And we will once again significantly increase funds for research in the fields of sustainable and animal welfare-oriented agriculture.
Ladies and Gentlemen, deciding on the direction to take is not down to gut feeling; this decision is reached in dialogue with the research community and the farming profession!

The Fertiliser Application Ordinance: Practicable and with a minimum of bureaucracy!

Ladies and Gentlemen, the transposition of the EU Nitrates Directive via the Fertiliser Application Ordinance in Germany is currently a subject of much discussion. Under the stipulations of the EU Nitrates Directive, Germany is obliged to test the Fertiliser Application Ordinance for its effectiveness every four years. The Action Programme on transposing the directive that was accepted by the EU Commission finished at the end of 2013.

I am also grateful that the Länder are showing support in this regard and that we can expect a practicable proposal before the summer break.

To me, practicable means for instance that there must be no rigid, standard upper limits for the application of fertilisers!

I am therefore backing, against all the Commission's reservations, retaining the smoothly-running and technically-sound system of the site-adapted fertiliser requirement calculation and developing this system further in the interest of an ecologically sound and economically efficient agricultural sector.

Practicable also means that smaller agricultural holdings should be able to bear the adjust-ments. I will lend my particular support to this aspect in my further discussions with the Commission and the Länder. We will, however, also have to talk about longer seasonal restrictions for the application of fertiliser and greater storage capacities in certain cases. There is no way of getting around this!

Nitrate is good for plants. But nitrate is not good for groundwater. I am confident that we will succeed, together with the Commission, with you, the farming profession, with the Länder, with the water industry and with the environmental organisations, in finding a sensible path between clean water on the one hand and farmland management on the other.

I know that fertilisation and plant protection in line with good agricultural practice are part of the foundation of your businesses - and this foundation must not be taken away from you!

And let me also comment on the storage vessels for slurry, liquid manure and effluents from silage, or JGS storage vessels. You know that the Anlagenverordnung (Ordinance on installations handling water-polluting substances) is on the agenda. If I and my ministry had our way, we would, as a government, do without a regulation on JGS storage vessels - and that remains my position.

However, a majority of the Länder in the Upper House of Parliament were of a different opinion. They want to see the JGS storage vessels included in this ordinance; they are calling for experts to examine this - despite there being, in my view, a limited hazard potential. I also consider longer transitional periods to make sense.

I have great reservations about both points. And I have already communicated my concerns to the Federal Ministry for the Environment, which has lead responsibility in this matter. We will have to see to what extent it is possible for the Upper House of Parliament to reconsider its position and renegotiate the Ordinance on installations.

My view is that our farmers do not run chemicals factories. The vast majority of our farmers run family farms which we must keep as free as possible from overly restrictive regulations - particularly if these regulations result in substantial costs!

Renewable Energies Act (EEG): Protection of vested rights

For anyone who wishes to bring together social expectations and farming success, there is no getting around the need to reorganise the EEG. We all know that the correction is necessary as support cannot be unlimited. The energy sources are in competition with one another in this area. But none of the energy sources has been left unscathed.

In my opinion, biogas occupies a special position: it can be stored, and it can be used when the wind is not blowing and the sun is not shining. Without biomass, it will not be possible to achieve the energy turnaround: overall it makes up almost two-thirds of the renewable energy supply in Germany. You farmers consequently also make a contribution, as energy farmers, to value creation in rural areas. I therefore thought it was essential to protect these legitimate expectations in the Renewable Energies Act.

This involved tough negotiations in the Interministerial Steering Group. I managed to push through tangible improvements against the resistance of the other ministries.

It was clear to me that we needed to protect vested rights and legitimate expectations in the new Renewable Energies Act. We want to air quality management bonus for the existing plants. And we want to retain the current flexibility premium for the existing plants - it will no longer be necessary to have a partial shutdown if we want to make things more flexible.

I consider it particularly important to protect investments that have already been made. Anyone who has already expanded their plant and equipment must be able to use them as they envisaged. This possibility must not be restricted via an inappropriate "maximum rated output". We want to ensure that this is not the case in the Renewable Energies Act.

The expansion trajectory of 100 MegaWatts annually should also only include the addition of new plant and equipment - and not growth via flexibilisation.

This was my position, this was our position: a position which also takes account of the requirements of a price hike which must be stopped and of sustainability in the farming sector. And that means that biomass will continue to be a pillar of the energy turnaround. The fact is that the energy turnaround can only be successful if it is accepted by our citizens. But it must not put the economic livelihood of our farms at risk!

At the same time, the reorganisation of the Renewable Energies Act is also an answer to the increasing competition for land. The production of foodstuffs must in my opinion always have priority. The removal of agricultural land and forest areas for the grid expansion must therefore also be restricted to what is absolutely necessary!

We must, as far as is possible, avoid the agricultural and forestry sectors having to bear a two-fold burden comprising nature-conservation compensation measures that are necessary in addition to the building of the transmission lines. This means that we must uphold the protection of ownership and agree on a fair compensatory arrangement for our farmers. I am definitely on your side in this regard!

And, my dear Norbert Schindler, that is also the case with regard to biofuels: I have spoken our for a higher greenhouse-gas reduction quota. The 3.5 percent which has now been agreed upon will safeguard the domestic sale of rapeseed, both now and in the coming years!

Organic farming

We cannot accept all the proposals that come from Brussels. Take organic production for example. The EU Commission has presented a proposal revising the EU legislation governing organic production. It has the aim of promoting fair competition and increasing consumer confidence in organic products - and also in the authenticity of these products. I support these aims unreservedly. It is obvious that anyone producing organic products must stick to certain principles. But we mustn't flood the market with a vast number of regulations which no one can comply with. It cannot be our goal to have huge organic conglomerates. There is a large sales potential, but so far organic farming only accounts for about 6 percent of agricultural land in Germany.

We must not let bureaucratic shackles make organic farming a niche production method. And we definitely must not allow the whole farming industry to develop along the lines of a modular system developed in Brussels offices. Because then it will no longer be practicable!

3. Weekly markets and the global market: safeguarding market shares and gaining a foothold in new markets

Ladies and Gentlemen, the export of food is a sign of the efficiency and competitiveness of our agri-food sector - and not, for example, a necessary evil to compensate surpluses!

Dairy exports and the milk quota

Our products, and in particular our milk and dairy products, have long since become real export hits. Dairies are reporting a bright outlook - thanks to their exports. I believe that, with such good prospects, it does not make sense to burden the dairy farmers amongst you, ladies and gentlemen, with a full surplus levy in the last quota year.

We therefore acted as advocates of our dairy farmers and called for a soft landing in the phasing out the quota. We did not manage to get our views accepted in Brussels at the first at-tempt, as a number of Member States strongly rejected changing the fat correction coefficient. Rest assured that I will not stop fighting for the interests of an efficient and competitive dairy industry in Germany!

The Transatlantic Free Trade Agreement

As we all know, we are not just a large exporter of food. We are an even larger importer of food. Other than medical products, foodstuffs are perhaps the most sensitive elements that you can trade with. Trust is the basis in this field.

We in Germany and Europe have high food safety and consumer protection standards. Standards which consumers trust.

Currently, everyone is talking about the TTIP, the EU's free trade agreement with the USA. Large sections of the population are alarmed. Because they fear that the high EU consumer protection standards will be eroded. But to speak plainly: The high level of consumer protection in Europe is not open to negotiation.

We should all be slightly more relaxed in our reaction. Expansion of trade helps to create and safeguard value generation, prosperity and jobs. As an export nation, Germany has always profited from free trade. I do not believe that we can just ignore the prospect of economic growth and employment on both sides of the Atlantic.

Given that our standards are protected, an agri-food sector that is as strong and competitive as ours can only be a winner in free trade!

4. Conclusion

Members of the farming community, I am firmly convinced that the German farming profession can be very confident about the future. The market situation is good, your products are in demand, the global demand plays into the hands of a production site that is so well positioned.

We need this good outlook. And you can therefore be certain that, with regard to the restructuring of the farm transfer clause, we will bear in mind the interests of the young farmers as well as those of the generation stepping down. I wish in particular to speak with the generation that is inheriting farms - and not just with the elder generation.

At the same time, the Federal Constitutional Court is expected to issue a judgement on inheritance tax that could have an indirect impact on the transfer of farms. We will have to take account of this as well as of this Federal Government's political resolve not to burden property as simple business assets by imposing further non-earnings-related taxes.

As you, our highly skilled farmers, are the guarantors of success. We do not want to place any obstacles in your path.

The political sector flanks your work by having laid a solid foundation in the Common Agricultural Policy.

The political sector flanks your work when you bring together sustainable concepts, social expectations and farming success. We need a contract between the farming industry and our society. All parties should be interested in this.

And the political sector flanks your work when you wish to tap into new markets with your high-quality products.

You can be proud of your profession! It will be my duty and my pleasure to support you on your path. As you "live" responsibility!

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