It is difficult for me not to draw a parallel to our farm sector. 2009 has been a dark and difficult year for many famers but now on the verge of a new year, we can see signs of improvement. One example is the milk sector: prices have now reached good levels and are rather stabile and I am very hopeful that the positive development will continue.

2010 will certainly also bring great changes for me but I will tell you more about this next time. For now, I will simply wish you and your family Merry Christmas and a prosperous New Year.

That is why I am happy to tell you that we are one step closer to having the final logo. Three logos have been selected by an expert committee, they’ve been checked for copyright issues and they are now ready for public scrutiny at this online vote, which runs till the end of January.

We want this logo to reflect what Europeans think about organic farming. So this is not just a logo for the organic producers or the supermarkets and distributors. This is a logo for all Europeans interested in organic farming and sustainable food choices. So I really hope that they will let their voices be heard.

100 logos were shortlisted and reviewed by the experts. Those who made it through to that stage will have received a letter by now. If you weren’t among the lucky ones, I would still like to thank you for your efforts. The competition has been a huge success with 3400 logos submitted. The interest which people have taken in the logo has been beyond any expectations and I am confident that the sector will be able to thrive on this strong interest.

Good luck to the remaining three designers. Now let’s go vote and show that we care about organic farming!!

Year after year, we have improved our record. Last year we came so close that we could almost hear the Champagne corks pop but today marks a milestone. For the first time ever, the EU’s financial watchdog has given spending on Agriculture and Natural Resources a green light. In other words: our books are in order.

This success comes mainly thanks to recent reforms of the CAP, which have greatly simplified things for farmers and administrators. Error rates are also decreasing for rural development policy. There is still room for improvement, in particular in the area of agri-environmental schemes where the commitments farmers have to respect are very detailed and complex. This does not mean that the policy is bad or that the projects failed. It merely means that they are difficult and expensive to check and that makes it difficult to reduce errors.

We should also be very proud of achieving these major improvements at the time of the biggest enlargement in the EU’s history. It is a clear pat on the shoulder for the New Member States, which have made great efforts to successfully introduce the necessary agricultural controls in a very short space of time.

Last year we threw open the curtains on the CAP so people can now go online to see who gets what from the agricultural budget.  But taxpayers also have the right to know that their money is spent correctly and that it reaches the right recipients. We have now got the Court of Auditors’ word that it does and that is, quite frankly, extremely satisfactory!

They get the car and the kids back from the weekly food shopping, and turn on the TV to see images of demonstrating farmers. Their own wallets just got a lot lighter in the supermarket – more so than a couple of years ago – but the farmers’ wallets are apparently not getting any heavier. So where did the money go?

There’s been a lot of talk in recent months about the food supply chain – the line of people stretching from the farmer in his field to the consumer buying a product in the supermarket.

If prices paid to farmers are low while food prices in the shops are high, we potentially have a problem. Because although farmers get substantial help of various kinds from the EU, they basically make their money by selling what they produce.

And we’ve seen problems in recent months. Following the now-famous spike of 2007, farmgate prices began to fall sharply as early as the second quarter of 2008. On the other hand, prices in the shops started to come down only recently.

A Communication published this week by the European Commission sets out steps to help solve this problem and others in the food supply chain.

I strongly encourage readers to have a look at the Communication for themselves, and I don’t want to go into all the detail here. But I’ll make a few points.

First, if we want to spot unfairness and do something about it, we need good information.

That’s why we’re launching a European Food Prices Monitoring Tool. This will help us to see what a kilogramme of pork costs in one country compared with the country next-door. It will also show us how the price of that pork develops as the meat moves along the supply chain – from the farm, to the slaughterhouse, to the processor, and finally to the customer’s shopping basket.

Secondly, we must do what we can to boost farmers’ bargaining power in the supply chain.

This is a complex issue, because different parts of the agri-food sector work in different ways. For example, in some cases farmers use contracts, and in some cases they don’t.

Regular readers of this blog will already know that a High-Level Expert Group is already looking at related issues in the case of the dairy sector.

This week’s Communication has some more general suggestions. Among other things, we need to step up our efforts at EU level to ban unfair contractual practices: for example, powerful businesses should not feel that at the drop of a hat they can just rewrite contracts which they have already signed.

But thirdly, the issue of bargaining power – whether in the situation of signing a contract, or otherwise – leads me to a wider point: farmers need to work together.

This is not hot news. Many European farmers have been successfully co-operating for decades. But I’m saying it again because I see such different approaches across the EU.

For example, in the fruit and vegetable sector, in some countries farmers club together into producer organisations. These give farmers more muscle in negotiations with processors and the retail sector, and they also help farmers to organise their work in other ways. In other countries, most fruit and vegetable farmers choose to go it alone – and they suffer as a result. This is why, in the reform of this sector agreed in 2007, we took steps to boost membership of producer organisations.

What’s right for one part of the farm sector may not be right for another. But in any case, in the years ahead we need to think carefully about how to help farmers stand up strong together.

In the meantime, this week’s Communication should make a strong contribution to ironing out problems in the supply chain. And there will be a follow-up report in November 2010 to make sure that we’re really delivering solutions.

Magicians who make people’s money vanish with a wave of the magic wand don’t normally last long in their profession. Shoppers who pay good money at the check-out till want to know that they’re paying a fair price and that everyone is getting a fair share of it. The steps announced by the Commission will help to achieve that.

One the one hand, we had yet another deadlock in the vote on the approval of three varieties of genetically modified organisms (GMOs) for import, which have already been cleared by scientific risk assessments from the European Food Safety Authority (EFSA). One of these was the GM maize Mon88017, which has effectively shut down the crucial soy imports from the US, leading to higher feed prices for the EU livestock sector. As expected, the Council didn’t manage to reach either a positive or a negative verdict because some ministers decided to hide their true colours and abstain from voting. This means that the decision on authorisation is being sent back to the Commission, which will eventually adopt the proposals in November.

On the other hand, we discussed the situation on the dairy market, where the Commission put another € 280 million on the table from the CAP budget for dairy farmers, who in some parts of the EU are having trouble covering production costs when selling their milk. This step, which was requested by 21 ministers and the European Parliament, has now left us with no margin in the 2010 budget. Bad news if a crisis should strike elsewhere in the agricultural sector.

So to put it a bit bluntly, we are currently using one hand to shoot ourselves in the foot by unnecessarily increasing production costs whilst the other hand is trying to stop the bleeding with cool cash. As I pointed out at a recent conference at the European Policy Centre, it sometimes seems as if I were part of a television comedy, except for the fact that there is absolutely nothing to laugh about.

I mentioned before that some ministers have chosen to abstain from voting. This means that they don’t vote in favour of importing the GMO but they don’t vote against either. They simply choose to have no opinion on this very important matter.

Without getting too philosophical, it is clear that by not choosing they are still making a choice and that it will also have consequences. If a minister abstains from voting on the import of GMOs, it is de facto the same as voting against. Such policy choices do not stop the approval of the GMOs, but they certainly delay the decision. The question is just how much money and competitiveness our farmers will lose whilst we are playing slow-motion political ping pong?

As I have said before, this is not a call to allow unknown GMOs into Europe. I am merely asking why we insist on expensive solutions instead of tackling the problem at its root and in a cost-efficient way. We have to include input costs in any serious discussion about the future of European agriculture.

Such traits, however, are not enough to guarantee success in farming.  It is common knowledge amongst people who enjoy outdoor activities that the gods simply can’t be trusted to deliver perfect conditions. Growing crops and raising animals are not mechanical processes. Weather and animal diseases can easily interfere with the business of even the best farmer. So it is no wonder that risk has always featured heavily in farmers’ lives. It’s one thing is to say, “Nothing ventured, nothing gained”, but we should not forget that the best strategy is to hope for the best and prepare for the worst. This is where risk management comes into the picture.

Risk management is definitely not a topic that steals the limelight. But in its own quiet way, it is an essential tool for farmers. Most farmers already apply risk management. They use different tools such as particular farming practices, insurance, financial markets, cooperation with other farmers, and participation in the supply chain in order to protect themselves against unforeseen negative occurrences. But I still think we can do more, especially in terms of training and the use of farm advisory services.

European farming is extremely diverse, so the risks that farmers face are equally diverse. A recent report by the JRC on the use of agricultural insurance gives a very good illustration not only of risks in agriculture, but also of how different the situation is throughout Europe and the specific role insurance plays in helping farmers to deal with risks.

The world is constantly changing, markets have become more turbulent and the weather less predictable. So we need to constantly be on the look-out for new ways of managing risks in farming. We already have good risk management tools in the CAP, like direct payments, market mechanisms and certain schemes under rural development policy such as support for climate-related projects. But as I said before, we can certainly do more and do it better. That is why we have already begun reflecting on future policy tools and techniques that can help farmers create robust risk management strategies. I don’t expect to read about this work on the front pages tomorrow but for anyone interested in the future of farming, I believe it is worth investing some time looking into it.

I say “steps” deliberately. These are not dramatic, blind leaps – because a huge amount of support is already on offer to help the sector through the current crisis, and because the action taken is bearing fruit.

Let me first repeat what’s already being done – because in some of the louder comments that come my way about the dairy sector, the silence on this point is deafening.

• In good times and bad, EU dairy farmers get valuable support from our system of direct payments. Worth about € 40 billion a year, this system includes € 5 billion paid out annually as compensation to dairy farmers for cuts to intervention prices, under the 2003 CAP reform. This year, 70 % of direct payments can be made as early as 16 October, instead of 1 December as usual.

• We’re really working our market instruments hard (public intervention, aid for private storage, export refunds) to help pull the market round. We expect to spend an extra € 600 million on these tools over 12 months to ease the crisis.

• Our rural development policy – now worth more than € 14 billion a year following the CAP Health Check and the Economic Recovery Package - offers a long list of measures which national governments can use to make the dairy sector more competitive and help it to restructure.

• We’re reinforcing the School Milk Scheme which Member States can use to distribute dairy products in schools.

• We’ve opened a new round for dairy product promotion programmes.

In view of all this, it defies belief that some people accuse the EU of “doing nothing” for the dairy sector. To say things like this is not just to be short-sighted: it’s to deliberately turn one’s back on facts which are staring everyone in the face.

And the market has started moving the right way. In one month, EU butter prices have risen by 10%. Prices for cheese and skimmed-milk powder are also moving upwards, as is the average EU milk price. And requests to sell products into temporary public storage for public money (through the intervention system) have practically come to a halt.
 
Of course, a burning issue in the debate is still the end of the milk quota system, scheduled for 2015. Some producers want to keep this system of centrally fixed production limits, but know that they can’t overturn the opposition of a large number of European producers and governments.

Let’s be clear: the quota system will go in 2015 because it is not the true friend that some people claim!

When the EU set it up in 1984, it was intended to be temporary. As it somehow escaped abolition year after year, it held back the dairy sector’s competitiveness. It kept an arm tied behind our backs so that New Zealand pushed us aside to become the leading global exporter of dairy products. It put up barriers to young farmers keen to enter the sector. And it didn’t prevent a loss of labour: since 1984, the first 10 countries to join the EU have lost 80 % of their dairy producers.

This is why EU heads of state and government confirmed the quota system’s future in June.

But I’m not saying that we’ve done enough. Further action is in the pipeline.

In the short term, on the basis of the Commission’s report of last July:

• we will allow Member States to offer farmers up to € 15 000 in state aid under the Temporary Crisis Framework;

• we will give the Commission new powers to take rapid temporary action against market disturbance in the dairy sector through a streamlined procedure; and

• we will temporarily change the rules on certain milk quota buy-up schemes to give them more influence on production and restructuring. 

At the same time, we need to put on our thinking-caps and look at some longer-term issues. So I want to put together a group of experts to discuss:

• a possible legal framework for contractual relations between milk farmers and the dairy industry;

• the possible usefulness of an EU dairy futures market;

• ideas for cutting production costs and spreading innovation; and

• the “balance of power” in the dairy sector supply chain (this discussion is already underway and a Commission report due by the end of this year will be the next step).

None of this guarantees an easy future. The current economic crisis has brutally hammered a number of sectors, and future tremors in the global economy will always affect agriculture, whatever we do.

But the EU is already doing a great deal to steady and strengthen the dairy sector, and we’re now taking the next firm steps out of the crisis.

It was not an easy decision. I’ve had fantastic 5 years. We have achieved much, continuing the reforms of the CAP, making our policy more market-orientated and geared towards new challenges such as climate change.

But it was the right decision. It’s a very demanding job and our farmers deserve that the person in charge will give 110% or not do it at all. One should never talk about a lady’s age but if I were ten years younger, I wouldn’t have hesitated to take five-more-years.

What I will miss most is the people I have met and the wonderful people I have worked with. I hope we will stay in touch when I turn a new page in my life. They say that retirement is your chance to do all the things you’ve been putting aside throughout your career. After more than 30 years in politics, my list has become quite long. First of all, I want to spend more time with my family and with my 7 grandchildren but I would also like to find time to work for some of the good causes which I feel very strongly about such as helping African women in farming .

Still for the next couple of months my job will be in Brussels. It is still not clear how long this Commission will be in office but I can guarantee you one thing: I will be working as hard as ever until the end of the term.

Danish version:

En svær beslutning

Jeg meddelte i søndags, at jeg ikke ønsker at forlænge mit mandat som Danmarks EU-kommissær.

Det var ikke nogen nem beslutning. Jeg har haft fem fantastiske år i Bruxelles. Vi har opnået utroligt meget, gennemført reformer af den fælles landbrugspolitik, gjort politikken mere markedsorienteret og gearet den til at tackle nye udfordringer som klimaforandringen.
 
Men det var den rette beslutning. Det er et krævende job. Vores landmænd fortjener, at den person, der er i spidsen for den fælles landbrugspolitik, giver sig 110%. Havde jeg været ti år yngre, ville jeg ikke have tøvet et øjeblik med at tage fem år til.

Det, jeg kommer til at savne mest, er vel nok de mennesker, jeg har mødt og arbejdet sammen med. Jeg håber, at vi kan holde kontakten ved lige, når jeg nu vender et nyt blad i mit liv.
 
Jeg glæder mig til at få mere tid til de ting, jeg har skubbet foran mig i løbet af min karriere. Efter 30 år i politik er den liste efterhånden ret lang. Jeg vil først og fremmest være mere sammen med familien og særligt med mine syv børnebørn. Men jeg ser også frem til at få mere tid til at arbejde for de sager, jeg brænder for - f.eks. hjælp til afrikanske kvinder, der beskæftiger sig med landbrug.
 
Jeg har imidlertid stadig et arbejde at passe i Bruxelles i de kommende måneder. Det er endnu uvist, hvor længe denne Kommission kommer til at sidde. Men jeg kan garantere én ting: jeg har tænkt mig at give mig fuldt ud, så længe jeg er kommissær.

On several occasions over the summer, very small traces of one genetically modified (GM) maize variety, which is authorised in the US but not in the EU, were detected in US soy meal imports for feed - I have heard of at least 6 occurrences in feed consignments bound for Germany, Spain and Denmark.

As early as mid-July, 200 000 tonnes of US soy had been denied entry to the EU. Faced with the high-cost risk of having to relocate or possibly destroy shipments, traders now speak of halting soy imports from the US.

US soybeans are imported by the EU in particular during the months November to March, when imports from South America diminish. A complete loss of soy imports from the US over the coming months could cause a serious shortage. In any case it would increase soybean prices, even if it is possible to import more from Brazil and Argentina. If the EU has to pay a higher price for its animal feed, this could be a serious blow to the EU livestock sector which is already struggling with narrow profit margins.

It is not be the first time that we are confronted with such problems in shipments from the US. We already had to deal with the Herculex maize in 2007 and last year we managed to approve the Roundup Ready 2 soybean just in time before cultivation began in the US.

We managed to dodge two bullets but back then it was already clear that we would come under much heavier fire in the future if we did not get our authorisation process up to speed with approvals of GMOs in third countries.  This was the clear message from a 2007 study by the Commission’s Directorate-General for Agriculture and Rural Development , and it was recently confirmed by a report from the Joint Research Centre of the European Commission as well as by the UK Department for Environment, Food and Rural Affairs (DEFRA) .

Yet this summer’s events still mark a new chapter in the book of unintended consequences of asynchronous approvals. Previously we have detected traces of non-approved soy in soy and non-approved maize in maize. But this summer the cargo was either non-GM soy, or approved GM soy, which at some point in the production chain had been in contact with a very small amount of a GM maize that is currently not politically approved in the European Union.

I use the phrase “politically approved” because the fact is that the GM maize has already received a positive assessment from the European Food Safety Authority.

I therefore stressed to the ministers that we have a responsibility to efficiently apply our GMO legislation and acknowledge the safety assessments made by EFSA. The Commission has already presented a committee of representatives from the Member States with a proposition to approve the GM maize variety which was detected in US soy shipments and which led to a block on imports. However, the committee did not manage to reach a decision in favour or against the proposal.

Now the case is on the ministers’ desk. I was very pleased with the reaction from most of the European farm ministers yesterday, calling for an urgent solution to the problem. I am therefore very optimistic about the outcome of the next meeting in October where the approval of the particular GM Maize will be on the agenda.   

I also hope that we will be able to avoid such crises in the future by looking at the practical consequences of dragging our feet when it comes to GMO authorisation. The fundamental question here is not about liking or disliking GMOs, it’s about maintaining a competitive large-scale meat production in the EU or preferring to import our meat from third countries that do not have the same reluctance about GMOs. We simply do not have enough vegetal proteins to feed our livestock and we are dependent on imports from countries such as the US, Brazil and Argentina, who are more open than Europeans to GM technology.

To this extent, the issue of importing GM feed is very different from the issue of cultivating GMOs in the European Union. On this latter point, I can only agree with what President Barroso said very clearly last week: it should be possible to combine a Community authorisation system - based on science - with freedom for Member States to decide whether or not they wish to cultivate GM crops on their territory. But this is another story.

First thing on my agenda will be to meet with the European Parliament’s Committee on Agriculture and Rural Development tomorrow. This will be the first committee meeting after the recent European elections. Although there will be some familiar faces from the last term, there is also quite a few new MEPs who I of course look forward to getting to know.

I have always found it vital to maintain good working relations with the European Parliament. Even if we don’t agree on every single point, their opinions and reports have often provided us with real substantial input to our efforts to make the CAP an effective tool to help farmers face future challenges and opportunities. However, as a politician I must confess, that one of the things I appreciate the most is the frank and open minded exchange of views that are at the centre of any Parliamentary debate. This is where you really feel and see the power of a representative democracy that is alive and kicking.

I know that some of you may think: yes but the Parliament still has no legislative power over the CAP. That is correct and it is something I deeply lament. This will hopefully change in the near future - provided of course that the Lisbon Treaty is ratified by all Member States. If one doubts that the Lisbon Treaty is a step in the right direction, the increased democratic legitimacy that follows from giving full co-decision powers over the CAP to a directly elected Parliament should prove that we are going down the right path. 

If everything goes well, the 42 members in the Committee will have a crucial role to play in helping to guide the future direction of agricultural policy. They represent a wide variety of political opinions, they come from countries with very differing farming structures and varied needs. Tomorrow will be a good occasion to get a feel for what they think about European farming and the CAP. What solutions they envisage to these issues, what opportunities do they see on the horizon? What role should the CAP play in all of this?

Rome was not built in a day, nor was the CAP. Tomorrow we will start out by discussing the work ahead of us, including the situation on the dairy market, climate change, our quality policy and LFAs.

I have been demoted or should I say promoted, to fetching and carrying this year, to the most important job on the farm keeping everyone fully fuelled with sandwiches and plenty of coffee. I do miss driving the tractors but it has also allowed me time to spend with my grandchildren, and I value that highly.

We are still not done with the wheat harvest as the weather has been trying its best to interrupt the process with frequent rain. I see that most of the Northern and Central part has been affected the same as we have by rain which makes it a stop start exercise in patience, with the early wheat harvest being impacted by the weather in terms of output and quality.

According to some market reports, the rape seed market seems to have been plunging rapidly down with a better than expected harvest. I also see that the barley yield and quality is very good this season with between a good increase in yield and an anticipated surplus for the harvest. It is always great to have a good harvest and see the grain sheds full but it does have an influence on the market.

The biggest drawback has been the sad news from our southern European Member States that are struggling with the ever recurrent problem of forest fires. Lives and livelihoods have been lost. The damages are heart-breaking and I would like to take the opportunity to send my thoughts of encouragement to those touched by the fires.

As I said earlier, it has been a very busy summer at the farm. I am sure that all farmers will agree with me that there is a certain satisfaction in seeing the result of months of hard labour. For those who are not spending their holidays harvesting, I would recommend that you take a detour into the countryside to watch the work in the fields. There is no thing like harvest in the year of a farmer. It’s is an extremely fascinating time - regardless of whether you get to drive the tractor or not!

As the market crisis continues, it’s real people who are feeling the pain - not just statistics on a spreadsheet. EU heads of state and government are very concerned, as am I. This is why the Commission has today published an analysis of problems and possible solutions in the dairy sector.

Do have a look at the paper: there’s a lot in it. But I want to draw out one or two key points here.

Very importantly: We can’t make quota expansion the scapegoat for low prices! We increased quotas for the 2008/09 marketing year, but production actually fell by 0.9 % - taking the total about 4.2 % under quota by 31 March.

The real sources of the crisis are the weakness of global demand and a powerful surge in output from major non-European producers.

So we can’t tackle our problems by trying to micro-manage production through tighter quotas. As European leaders agreed in June, we must still follow the course mapped out in the CAP Health Check of 2008 - moving towards a better-structured, more competitive, more market-oriented dairy sector, free from the constraints of quotas from April 2015.

This is the right kind of dairy sector for a world which will need more dairy products in the long term as the population grows.

However, phasing out quotas certainly doesn’t mean leaving the dairy sector “solely to the laws of the market”, as some claim. We’re already doing a great deal to steady the ship. For example:

• Public intervention, aid for private storage, export refunds: So far we’ve made or planned spending of about € 600 million on these traditional market tools in the current budget year. We’ve used them carefully – enough to stabilise the EU market, without weakening the global market or returning to the bad old days of the “butter mountains”. Intervention and aid for private storage will now be kept open beyond the usual August cut-off point.

• Decoupled direct payments: The EU’s system of decoupled direct payments to farmers doesn’t seem to get mentioned very often in the “dairy debate”, but in fact since the CAP reform of 2003 it’s been our main policy tool for supporting farmers’ incomes. And when we agreed in that reform to lower dairy intervention prices, as compensation we granted dairy farmers extra direct payments, now worth € 5 billion a year. As these are “decoupled” from production, farmers receive the money whatever the market situation, come rain or shine.

• Money for restructuring: The CAP Health Check and the Economic Recovery Package are bringing an extra € 4.2 billion on stream to address a small handful of “new challenges”, including restructuring the dairy sector.

There’s a lot more that Member States can do if they choose – for example, through rural development policy in general, and through state aid.

Finally, the Commission is still looking into price transmission along the food supply chain. I find it really striking that whereas farmers are getting less for their dairy products than before the price surge of 2007/08, prices on the supermarket shelf are still up 14 %! We have to tread carefully here, but surely there are questions to be answered.

Yes, the dairy sector is sailing through a storm - and getting buffeted on the way. But it’s on the right long-term course.

We must stick to that course, but also steady the ship as she goes. I’m 100 % committed to doing just that.

On board the jury we have highly esteemed graphic design experts - including the chairman, Rob Vermeulen, who is the former president of the Pan-European Brand Design Association. The graphic experts have teamed up with people from the organic sector, who of course should have a say on how their products are to be labelled. And as our wild card, we have the great privilege of having Miguel Indurain joining the jury. Mr Indurain is not only an extremely accomplished sportsman - having won the Tour de France cycling event five times in a row - but also a son of the countryside and a man who has always taken a special interest in the origin of his food!

I have also been told that a number of very enthusiastic people wanted to submit a logo but unfortunately did not fulfil the eligibility criteria because they were not students of art or graphic design. I would, however, still like to thank them for their interest and I hope they will participate when the final winner is selected by online voting later this year. You can keep yourself updated on the competition on this website - where there is also a wealth of information about organic farming and food in Europe.

But before I get too enthusiastic about the prospects for summer, I should stress that work is not yet over in Brussels. Next week we will have the first Agricultural Council meeting under the Swedish presidency, which took up its role on 1 July. I would like to take this opportunity to thank the Czechs for their first presidency, which I think went well. We did some good work on agricultural quality schemes and simplification, and I was also very impressed by the Informal Council meeting in Brno where we had an interesting debate on the future of direct payments.

Now the Swedes are at the helm of the EU. As a Dane, I am probably expected to make a lot of jokes about the Swedes. Trust me, after centuries of Scandinavian rivalry, there are plenty. Instead I would like to share my admiration of the strong Swedish emphasis on climate change, innovation, research and technological developments, which has secured the country a place at the top of the global innovation index. I think we could use a bit of that mindset when we look for solutions to the future challenges of European farming.

The overall vision of the Presidency is to create conditions that allow us to use without using up. I am glad to see that Sweden has put food and climate change right at the top of the agenda. That is where they belong! We need to find good pragmatic solutions to help farmers adapt to changing weather conditions whilst emitting less greenhouse gases. But let’s not fool ourselves: agricultural emissions are not a uniquely European issue. We need to come up with global solutions; we need to work with the rest of the world. When the leaders of the world gather at the United Nations Climate Change Conference in December in Copenhagen, they will be looking to the EU for leadership. This is a challenge we must not fail: we must get a result and I have a lot of faith that the Swedish presidency will do everything it can to secure that.

Visit the Presidency´s website

As I said to Mr Le Maire, I am very glad that it is a young and fit minister who will be joining us. In view of the current milk crisis, he will have to hit the ground running. The situation in the dairy sector is highly concerning and we both agree that if prices stay at this historical low, we are heading for disaster – especially the young farmers who have made huge investments for the future.

Much has been done already. We have activated all of our market instruments. We maintain our policy on export refunds, where we do not undercut world market prices, but still provide vital assistance to our exporters. And we will soon propose to extend the period for intervention and private storage aid.

We will also allow farmers’ payments to be paid earlier than usual. This means that 70 percent of the payments can be paid out already in October if checks have been carried out. There is also the possible option of governments offering loans to farmers – on market terms, naturally.

But more needs to be done. Ten days ago, EU leaders asked the Commission to provide an in-depth analysis of the market within two months – and that we will do. In fact, I will present it already on 22 July. This is not a time for stalling.

However, urgency should not make us lose sight of the ultimate goal which is to create a strong dairy sector. I was therefore also very pleased to hear Mr Le Maire agree that quotas are a thing of the past.

I know that some people blame the current crisis on the decision to phase out quotas. This claim is not only wrong: it’s also counterproductive. In the last quota year, production fell by 0.9 percent despite the increase in quotas. In the EU we are 4 percent below quota overall. If we make quotas the scapegoat instead of facing up to the real problems, how will we ever stand a chance of fixing them?

Some new ideas have already been mentioned:

With regard to the School Milk Scheme, we are looking at whether we can extend the range of products. Dairy products are included in the promotion programmes for which the overall 2009 budget is 56 million euros. And we are looking very carefully at calls to loosen state aid rules. Even small amounts of state aid can undermine the level playing field in the CAP – which must remain a common policy.

But we also have to take a step back and look at the entire food chain. Why have falling producer prices not translated into falling consumer prices? Why is milk being used as a loss leader, the product that is sold below cost to lure consumers into buying other overpriced products? It is not hard to see why it is a good promotion strategy for retailers. They keep the profits and the bill is passed on to the struggling dairy farmers.

But is it really what we want? I think consumers have a tendency to forget that fresh milk is not an industrial product from a tap that can be turned on and off. Once a dairy farmer goes out of business, it is likely to be for good. It takes years to build up a good herd from scratch. If we send our farmers into bankruptcy, who will deliver fresh milk to the Europeans in the future?

That’s why I fully share the concerns on the balance in the food chain which were raised by the French and reiterated by Mr Le Maire on Thursday. We have to look into the milk market and see where the money goes. Much of the solution for this will have to come from the big players themselves – especially processors and retailers. But this issue will also remain high on my agenda. I won’t let this issue drop off the radar screen.

The reason for my visit was the conference we had organised on agriculture and enlargement, where we were privileged enough to be able to welcome the Croatian Prime Minister Ivo Sanader, who joined me in opening the event.

Croatia may be more advanced in its negotiations than the other candidate countries, but a key task for me was to increase the pressure on the government to speed up their preparations.

Sure, the impasse with Slovenia over the border issue has not helped matters, but it’s vital that Croatia does not use this as a pretext to slow down their preparations. If anything, they should use this delay to reinforce their efforts and make it clear that they are more determined than ever to join the EU.

I spent a lot of time with the Croatian farm minister Božidar Prankretić, as we made some fascinating visits, and I was able to get a clear view of how their preparations are progressing. It’s clear that they are making progress, but it’s just as clear that more needs to be done, not least in preparing the paying agency and the IACS control system and in aligning their support system with the ‘decoupled’ payment model we have in the EU.

I was extremely impressed with Croatia and I’d like to see the country join the EU as soon as possible, so I urge them to continue their good work of preparing for membership.

I don’t know whether it was coincidence, but on the second day of my visit, dairy farmers demonstrated with their tractors outside the agriculture ministry to protest at the low prices for milk.

We know that well from Brussels.

However, when I visited a dairy farm on Thursday morning, I was rather surprised to hear that Croatian milk farmers are receiving roughly twice as much per litre of milk as some of their EU counterparts, if the market price and government payments are taken into account.

The dairy farm we visited was probably far from typical, but I was encouraged to see a young farmer who saw a future in dairy farming and who was preparing to increase his herd by around 30 animals. This made me hope that there is indeed light at the end of the tunnel for the dairy sector.

The other visits were just as rewarding.

I saw a fruit and vegetable packing factory, part-financed by EU pre-accession money (SAPARD). They had reached such a state of excellence that they were supplying local McDonalds restaurants.

We also visited a winery in magnificent surroundings whose owner had seen the tremendous possibilities of offering top quality food to go with his excellent wines. This was a good example of the sort of entrepreneurial spirit which has much to gain from our Rural Development policy.

And most extraordinary of all, I was able to see a minefield left over from the ‘Homeland War’, which is being cleared with the help of EU support.  To see such a thing in an EU candidate country in 2009 is hard to believe and reminded me once again of the enormous value of the European Union.

So a most rewarding trip, with superb hospitality.

But I will be staying in close touch with Božidar Prankretić to ensure he keeps up the momentum in preparing Croatia for accession to the CAP.

This is highly concerning. The European Parliament already plays a big role when we make laws in the EU. And the Parliament does not yet have any formal influence over the CAP, I still consider it to be a very important partner. Members of the European Parliament often have their ears to the ground, they know what is going on in their constituencies and on top of that, they are a great source of innovative ideas when we discuss our reform proposals.

If and when the Lisbon Treaty is ratified, the Parliament will become an equal partner and will be able to amend laws that relate to our farm policy. But it already has direct influence on a lot of matters that affect farming and rural areas.

The European Parliament is for instance fully involved in laws on soil quality, pesticides, nitrates, food safety, and hygiene issues – in fact if we look at the cross-compliance requirements, the vast majority are based on laws that the Parliament helps shape.

So in other words, the European Parliament does have a huge impact on the individual farmer as well as on people living in rural areas. And take it from someone who has worked with Parliament for the last five years: MEPs do not all agree. There is clearly a big difference between what parties and candidates want for our farming sector. Some want to dismantle the CAP; others seem ready to defend the CAP with their lives. Some want to use the CAP funds on rural development while others would rather see them spent on market measures such as intervention and export refunds. A lot of candidates have chosen a more moderate approach.  Whatever the difference of opinion, it is clear that every vote counts on the 4-7th of June.

As always, the country left me with strong impressions. One of these was that, when the Chinese decide to deal with a problem, they really tackle it head-on.

This was certainly true when the authorities put a member of my Cabinet straight into quarantine for a day because a fellow-passenger seated near him on the plane had a fever!

It’s reassuring that the Chinese are energetic about solving problems, because in the area of agriculture and the environment, they certainly have some challenges to face.

China’s average farm size is just 0.6 hectares – not a recipe for top efficiency. Also, because of a longstanding rural exodus, it’s mainly women and the elderly who are doing the farming.

Although rural incomes are rising, urban incomes are more than three times higher.

And China also has significant problems when it comes to pollution and water scarcity.

The Chinese government is working hard to get on top of these difficulties, with plans for reforming land use structure, stimulating general rural development, bringing pollution under control and using resources more efficiently (especially water).

In fact, on so many issues, China is now singing from the same hymn sheet as the EU, and I’m strongly convinced that we can work together.

The Chinese Minister of Agriculture was very interested in the EU’s rural development policy, and while in Beijing I had the pleasure of launching a joint EU-Chinese agri-environmental project.

We can also work together on trade. Like the EU, China is firmly committed to the Doha Round of world trade talks. Bilaterally, we clearly have scope to boost agri-food trade from its significant but modest base of € 5 billion a year. In fact, EU agri-food exports to China make up only € 1.5 billion of this total, so our exporters are very keen to get some growth – and indeed,  Chinese visitors to the SIAL food fair in Shanghai really enjoyed tucking into European food and drink at the EU stand. For its part, the Chinese government is very keen to develop its system of Geographical Indications, in co-operation with the EU.

Of course, on some issues the EU and China have their differences, and we’ll have to work at these patiently. But it’s reassuring that the Chinese are brimming with energy and determination to get problems solved and to make the most of opportunities. We can do business with them!

This was the case with my visit to Salzburg, Austria last week. I went there mainly to participate in a very interesting conference on Food security and Climate Change. However, the trip also gave me a welcome opportunity to visit an organic dairy farmer in Bergheim, outside Salzburg. The farmer gave me a very good account of the challenges that he is faced with - notably, dramatically low milk prices. 30 euro cents per litre of organic milk!  That does not even cover the production costs, he told me. 

This is a very good example of the pressure that European dairy farmers are facing at the moment. It is not sustainable in the long run and that is why I have not hesitated to re-activate aid for private storage, intervention for butter and milk powder and export refunds where it is possible. Hopefully this will take some of the pressure off prices here and now.

Next week, I’ll be travelling a little further from my front door than Salzburg when I take an agri-food trade delegation to China.

China is the hungry dragon of the 21st century! A population of 1.3 billion is a lot of mouths to feed – and over the last 24 years, that figure has increased by 250 million, which is half the population of the EU! Also, as more Chinese move to the cities and have more money in their pockets, appetites are growing for the kinds of high-value products that the EU excels at producing. European wine exports to China grew almost eightfold from 2004 to 2008. So there will be plenty of opportunities to discuss when I and the delegation visit the SIAL fair in Shanghai.

China also faces problems common to all of us. In the 21st century, as the global population grows but climate change poses an ever-greater threat to agricultural production, we all have to square the circle of producing more food, in more challenging conditions, and producing lower greenhouse gas emissions in the process. I hope to hear more about Chinese approaches to this problem in Beijing – and I’ll certainly have comments to make from a European perspective next week.

In a world where consumers are making up their minds in split seconds, instant brand recognition is crucial. Some people only look at the price tag, but more and more consumers look for organic produce and other kinds of quality food. Unfortunately this quest is sometimes made harder by the jungle of private, regional, national and European labels that are used to give our food identity and history.

I have always been in favour of empowering consumers to make informed choices rather than trying to politically steer demand from the top downwards. Creating a strong European organic logo, which sends a clear message about the benefits of organic production, is all about this: guiding consumers through the label jungle. The organic logo will be mandatory for all pre-packaged organic products from the EU. On top of that, all organic products from third countries can use the EU logo on a voluntary basis.

We need one logo and one identity in order to create one real and well-functioning European market for organic products. This way it is easier for an organic farmer from Sicily to sell his tomatoes to a supermarket in Stockholm and organic farmers throughout Europe will be able to benefit from a home market of almost half a billion people.

In order to get the best possible logo I have decided to give Europe’s up-and-coming design talents the chance to create our logo. The Commission has just launched a competition for all EU students of art or design. The best logos will be submitted to online voting and the winner will be awarded a cash prize of € 6,000.

But there is much more to winning than the cash prize. I can’t imagine a better way to kick off a design career than to be able to take credit for a logo that would be printed on millions of product packages, that will be seen and searched for by millions of Europeans on a daily basis and that is instantly associated with something positive.

As for the butterfly and the ladybird logos, which I mentioned earlier, those are French and Italian organic logos. And they, as well as other organic logos, can of course still be used together with the new EU logo.