Middle scale arable farms in Central Europe The Role of private owners Warsaw, 6th March 2006 Dipl. Ing. Felix Montecuccoli
Program •Introduction •Where do we come from • Where do we stand now • Where will we go tomorrow
Introduction Dipl. Ing. Felix Montecuccoli •* 1964; •1991 University degree in Forstry, Vienna • „Neue Länder“ `91-`92 • since `96 Family Estate „Gut Mitterau“ •940 Hectare forest •180 Hectare arable land •private 3-farms-cooperation 270 hectare •3 1/2 Employees
• since 2000 Vicepresident Land & Forst Betriebe • since 2005 President Land & Forst Betriebe
Where do we come from • EU 10 • Strict market organisation •cereals/oilseeds/protein plants •milk / beef •sugar •wine •olive oil •rice •tobacco
1
Where do we come from •Export / Import License - tax - subsidies •Subsidies on production •arable crops •milk / beef •sugar / wine / olive oil etc. • closed internal market for agri-chemicals, fertilizers, machinery etc.
2
CAP Reforms • 1992: Price-Reduction + New Production Subs • 2000: Price-Reduction 60% Compensation as Production Subs marginal rural development program
• 2005: Price-Reduction -> World-Market-Prices 60% Compensation Decoupling of Subs -> Single Farm Payment „2nd Pillar“ Rural Development
Cereal market in the EU Mio. t
•300
Export in Mio. t
250
30
35
25
200
20
150
15
100
10
50
5
0
0 96/97
97/98
s = Schätzung Quelle: Coceral
98/99
99/00
00/01
01/02
02/03
verwendbare Production Erzeugung
03/04
04/05
05/06s
Verbrauch Consumption
Export
Current situation • EU 25 • Intervention on world market level • EBA (Everything But Arms from LDC´s) • 00-Agreements • Decreasing export subsidies • New global players - Black Sea
1
Price for wheat and mais in Hungary EUR/t
- Terminbörse Budapest, Termin März’06 -
110
Intervention price Interventionspreis
105 100
wheat Brotweizen
95 90
mais Mais
85 80 01.07. 2005 Quelle: BET
01.08.
01.09.
02.10.
02.11.
03.12.
03.01.
03.02. 2006
Current Situation • Decreasing production value • Decreasing number of farms • No farm-income without subsidies • „1st Pillar“: Single Farm/Area Payment historical base 2000-2002 decoupled fixed set aside Cross Compliance - „Good Conditions“
2
No Income without Subs 1800 1600 1400
€/ha
1200 1000 800 600 400 200 0 83/84 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05
Prod. Value Total Income
direct Payments Total Income
Total Costs
No chance even for the best 1400 1200
Total Income
€/ha
1000 800 600
Market Income
400 200 0
Best Materials
Poorest Poorist
Average
Labour+Machinery
Buildings
Rents
Other
Current Situation • „2nd Pillar“: Rural Development budget reduced by member states available only for active farmers up to 80% for extensive farming 10%-40% for non-agricultural projects „social“ approach
3
Outlook • EU 27 • End of export subsidies in 2013 • CAP mid-term-review + financial discipline • Sugar-reform -> Plus on cereals • Increasing imports • Competitive on the global market? • New market for bioenergy?
Market for Cereals in the EU - Prognosis by EU-Commission Mio. t
•
0
Argen- USA tine Canada
Isermeyer et al. EU-15 New Members
UA2250BT UA2250BT UA1730VI
PL1851NW PL1851NW
HU250GP HU50GP HU1100TD
Labour
CZ2200BO CZ2200BO CZ460BO CZ460BO
Machinery+Buildings
SE330LO SE230NY
DE260OW DE260OW DE260OW DE1200UM DE1200UM DE1200UM DE1100MV DE1100MV DE1100MV
UK260ES
Directcosts
FR150PG FR200BG FR200BG
CA3240SaBr CA3240SaBr CA4040SaBl CA1620SaBr CA1620SaBr CA2000SaBl
US880ND US1010ND
AR1000BA AR1800BA
US-$ / t Wheat
Wheat - costs of production 2004 Capital-costs Overheads
250
200
150
100
50
Ukraine
Wheat-yield, 1970 - 2004 90
dt/ha
80 70
Deutschland
60
USA
50
Kanada
40
Australien
30
Argentinien
20
Brasilien
10
Isermeyer et al.
20 04
20 00
19 95
19 90
19 85
19 80
19 75
19 70
0
Bioenergy becomes competitive 60
$ / Barrel
50 40 Treshold for Bioethanol (Brasilia)
30 20
Oilp
10 0 1960
1965
1970
1975
1980
1985
rice
1990
1995
2000
2005
What European Agriculture needs •Stability - No further CAP-Reform until 2013 • Loyality and firmness in the WTO-negotiations •Help the poorest countries •Help European farmers •Development in farm structures without social desaster •Private driven initiatives in rural development and business