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 
 
¶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