Czech farming 6 months after accession into the EU

22-11-2004

The agriculture chapter was the most complicated part of the negotiations before the accession of the Czech Republic into the EU in May this year. The most criticism came down on Czech veterinary controls and the fragmentary legislation governing them. For their part farmers feared new competition, lower sales figures and even bankruptcy. Now, nearly 7 months down the line, farmers are in a position to compare the situation with what went before and evaluate how useful and fair the EU has been to the Czech farming sector.

The majority of Czech farmers were quite sceptical about EU membership. Their scepticism was reinforced by past experience, such as the trauma of forced collectivisation in the 1950s, which caused a lot of damage to farmers and brought dubious economic results. With EU enlargement Czechs most feared Poland and Hungary, which joined at the same time. There were fears that they would shower the local market with cheaper products. According to the Ministry of Agriculture their anxiety was needless. Czech consumers have remained faithful to local products and farmers maintained their position on the Czech market with an added opportunity to export some commodities - mainly into neighbouring Germany and Austria. But according to some farmers their position has been threatened and their businesses are going through rough times. Hugo Roldan, Head of External Communication at the Ministry of Agriculture says about the last seven months:

"It appears that our products are competitive enough concerning quality and prices. German processors have began to show a big interest in importing Czech milk because of its quality and price. They have offered better prices to Czech farmers than local processors. Some farmers export to Germany and Austria and some processors complain about it. But it is a part of the open market. It is up to them to come to an agreement in order to supply milk into the local market."

As only 5 per cent of milk has been exported so far, a lack of milk should not become a hot issue. Milk producers can easily replace the loss with cheap milk from Slovakia. Lower prices seem to play a big role especially for meat producers, who have started exporting more pork. On the other hand commodities such as cereals and vegetables continue to be sold only locally and farmers are struggling to fight Polish importers. Marketing has become more important than ever before.Mr.Roldan:

Photo: European CommissionPhoto: European Commission "Farmers have to think about their business in the long term. They have to think how to support the marketing of their goods and commodities. They have to invest more into their marketing. The problem is not to produce enough wheat, milk, meat but how to find a place on the market for these products. Farmers in Europe produce high quality products of a wide range."

Even before May 2004 the Czech Republic had created special programs to support new farmers as a part of the Common Agricultural Policy valid until 2013. 26 billion Czech crowns have been budgeted for agriculture this year, 2.6 billion less than in the coming year 2005. The state's agricultural concept also regulates the market and guarantees prices in case of natural disasters such as floods and droughts or sharp changes in prices.

Interest in agriculture has risen. Especially greenhorn farmers can count on support from both the state and the EU. However better employment possibilities in cities are tempting young people to abandon the countryside which is slowly emptying. Mr.Roldan:

"Our farmers are doing well in applying for EU support. Before the accession some farmers were worried if they are going to be able to meet all requirements in order to get sufficient EU funds. It appears that they are able to create high quality projects for development of countryside and agritourism. They create new sources of employment in agritourism and they are getting good support from the EU."

Conservative attitudes to farming are proving an obstacle. The volume of production is sometimes too much of a priority and a new approach is yet to be developed that will also put stress on quality.Hugo Roldan:

"They still think that the way to achieve success for a farmer is to produce sugar beet for the market because people and animals need it. The aim of the current agricultural policy is to change this way of thinking of the farmers by supporting them in order to reduce the production of traditional products and to increase support just for keeping grass in good condition and to encourage farmers to breed animals such as sheep, horses in the areas where is very expensive to cultivate other kinds of crops which are difficult to sell."

New EU hygienic requirements have caused a lot of worries to farmers who can't afford huge investments. In particular regional producers of local traditional foods such as sausages and cheese have no other option than to give up the prospect of exporting. Unless they are given special permission, which is conditioned by at least some improvement in food hygiene, their food is not allowed to be exported. Hugo Roldan:

"We can discuss if rules are too strict, we can discuss if they should be softer than they are but finally most food producers realise that it is necessary to meet this requirements in order to ensure food safety of consumers. Currently most of the Czech producers are meeting them and they are allowed to export. It has sense to make these regulations so strict in order to reduce food safety risks to a minimum."

Czech officials as well as farmers have strongly criticised a new EU sugar market reform. It is expected by the beginning of the year 2007 and it is not favourable to Czech producers who have a 200 year-old tradition of sugar production. With a new sugar quota system the Czech Republic, once a sugar exporter would become a sugar importer.Hugo Roldan:

"The intention of the reforms is to give those countries, the members of EU with a long tradition of sugar production, a chance to keep self sufficient and not to concentrate the production of sugar only into 4 or 5 countries. But it does not allow smaller countries to be self sufficient in production of sugar. This is discriminating that is why we don't agree, not with the reform itself, but with the level of the quotas proposed."

The Association of Private Farming of The Czech Republic is the organisation set up by private family farmers. Its task is to analyse the complexities of problems and propose solutions which best meet the needs and interests of farmers. Michal Pospisil, a member of the Association's board, is critical of rules exposed by the Czech officials who negotiated conditions for the Czech Republic:

"I think that Czech veterinarian board or Czech administration made much stricter rules than the EU rules. They didn't look at the profit of Czech entrepreneurs, food processors and farmers. They only wanted to be good pupils. They did not protect Czech farmers, especially small farmers. Many small units were closed which would never have exported their products to the EU anyway, but they were very good for the local, regional market."

While this year's good harvest of cabbage would have been a joy to farmers a year ago when this popular vegetable was profitable, this year most of it is going to be ploughed under. Very cheap Polish cabbage has already filled the Czech market and processors don't want to buy any cabbage produced by Czech farmers any longer. Since most of the contracts are based on trust and have never been signed, many farmers have a lesson to learn. Michal Pospisil:

"The impact for the Czech farmers is that they are going bankrupt. A lot of products are imported from Poland and they are imported directly to the supermarket chains. Farmers from the EU are much better in marketing of their products. They will be much more successful in it because they have a system. The system of the farm co-operatives which was interrupted by the communists has been running in Europe fluently. They have developed very well the system of marketing their products. It will be a weak point mainly for the Czech and Slovak farmers."

Jan Miller is a private family farmer. He owns and takes care of his 650 hectare farm with help only from his family members. The accession into the EU hasn't affected him a great deal so far but it might change if other farmers don't realise that they are businessmen and that neither the state nor the EU will help them forever. In more than ten years of farming he has become sceptical of any rules and regulations. He is sure that there is always someone who is helped a bit more than others.

"We are part of the EU and the rules should be the same for every country. Our government wanted to be a part of the EU at any price. I think that the Czech Republic and the other new members are not treated equally. I think West European countries are more favoured. The other downside is the veterinary regulations. Meat producers have to bear ridiculous controls from Czech officials. I think they go over the top. I think that as people were afraid of Moscow now they are scared because of Brussels."

Jaroslav Bacina is also a private farmer. He is an optimist, pointing to his own rich experience, his son's enthusiasm and the strengths of Czech farmers. Mr. Bucina:

"I think that the Czech Republic is best at productivity of labour. Not many of us have only 20-30 hectares as is common in Poland. We can do much more work with fewer people and machines than in other countries. On the other hand farming has to be done with love. If you just want to make profit you should not farm at all. What is missing here is generation farming, the tradition where sons inherit their father's farm. We just sell our land to foreigners."

The pros and cons of the EU membership seem to revolve around two key words: subsidies and regulations. The open market is praised by some and cursed by others, but one way or the other, Czech farmers will have to get used to the fact that there is competition to be beaten. For all the complications faced by farmers, Hugo Roland from the Ministry of Agriculture, concludes that the alternatives would be far worse:

"We would remain isolated from the rest of the unified Europe."

22-11-2004

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