During the consultation process, representatives of the Ministry of Agriculture and Food presented to ESC the position in the Bulgarian government on the CAP reform proposed by the EC. They expressed their satisfaction that ESC's resolution overlaps to a great extent with the proposals of the government.

ESC calls for a unified national position on the CAP which could be jointly defended by all Bulgarian representatives in the European institutions and the government. This will be of great benefit to Bulgaria in the negotiations for an equitable allocation of CAP resources among Member States for the next programming period 2014-2020.

In its Resolution ESC notes with concern the findings of the recently published Report by the European Parliament that the share of CAP gradually decreased from 75% of the total EU budget in 1985 to 39.3% in 2013, representing 0.45% of EU GDP.

Moreover, the ESC notes with concern that after the accession to the EU of 12 new Member States, the amount of Community support for each farmer individually has decreased. The average income from farming in EU-27 is 50% lower than the average income in other economic sectors, while production costs for fertilizers, fuel and electricity reached their highest levels for the past 15 years which significantly impedes agricultural production.

ESC also notes with concern that over the past 10 years, real agricultural income per capita decreased by 12.2% in EU-27 and reached 1995 levels. The Council also found that the reduction of the budgetary costs associated with market measures is even more significant - 74% of the total cost of the CAP in 1992 to less than 10% at present. The purpose of CAP expenditure has gradually shifted from providing marketing support and providing export subsidies to direct payments dissociated from production and rural development aid.

ESC pays serious attention to the main challenges facing the future Common Agricultural Policy which it identifies in following way:

-   inequality between old and new EU Member States and the tension arising from the unfair competition between  them;

-   climate change;

-   financial and economic crisis;

-   prerequisites for dumping prices generated by the application of CAP;

-   unstable markets with huge fluctuations;

-   lack of transparency of the actual costs of the CAP.

ESC identified as particularly challenging the shortage of agricultural workers, owing to the demographic situation in rural areas, and the fact that only 7% of European farmers are under the age of 35, but expectations are that 4.5 million of them aged over 65 will retire by 2020. According to this trend, if the number of farmers continues to decline, the future of farming may be placed at risk.

ESC puts the main emphasis of the Resolution on the challenges and opportunities for Bulgaria in the context of future CAP for the period 2014 - 2020 г. ESC considers that the future CAP should take into account the structural differences and modernisation needs in the enlarged EU in order to achieve the same levels of cohesion and balanced development on the whole territory of the Union.

ESC calls for fair distribution of CAP payments during the period 2014-2020 with respect to farmers in new and old Member States. However, it needs to achieve an equitable distribution of resources and for the first and second pillar, both among Member States and among farmers within each country.

Furthermore, ESC calls for the achievement of parity in the balance of resources between the two pillars in old and new Member States.  The ratio between the first and second pillar in new Member States is 56.1%:43.9%, while in older Member States it is 87.2%:12.5%. It should be noted that in the first pillar funds are obtained through simplified procedures and some countries have benefited from this. Meanwhile, in new Member States where the funds under the second pillar are more, farmers receive them under more complex procedures. This leads to significant distortion in the actual utilisation of the provided funds and thus to unfair competition between farmers in old and new Member States.

ESC insists that social characteristics of individual Member States related to agriculture, such as employment and farmland, should be taken into consideration. It is evident that, both in terms of arable land and employment rate, the philosophy underlying CAP generates huge polarisation in payments between old and new Member States and unfair competition.

Differences between old and new Member States exist also in relation to the implementation of CAP payments per hectare of arable land. For example, for EU-15 states payments range between EUR 300 and EUR 400 per ha, in Greece and Malta EUR 822 and EUR 789 per ha, respectively, while in new Member States payments are approximately EUR200 per ha. For Bulgaria and Romania in 2009 these payments were below EUR 100 per ha, in Bulgaria the rate was EUR 82 per ha.

ESC recommends that in times of economic crisis action should be taken in support of Bulgarian farmers and the rate of subsidies for them should reach the amount determined for the country in the beginning of 2014 rather than in 2016. Bulgarian farmers now receive reduced subsidies amounting to 50% of the annual financial envelope of the country and reaching the full amount of the national ceilings for direct payments in 2014 will signal the equal position of Bulgarian farmers in the common European market.

ESC insists that direct aid under the first CAP pillar should continue to be fully financed from the EU budget, and rejects any attempts to convert them to national financing, which could undermine the fair competition within the EU single market. ESC recognises the need to take effective measures to ensure fair and equitable distribution of profits across the food chain.

The data for Bulgaria show that only 4% of farmers receive 78% of the subsidies provided for the whole country, and this gives strong competitive advantages to a very small number of farmers over the others, or to one sector over another. According to ESC, a matter of priority for Bulgaria is to achieve a balance between the sectors of crop and animal production in terms of targeting of EU funds to them. ESC proposes that CAP after 2013 should allow Member States (where necessary) to provide land to animal breeders which should not be considered state aid.

In conclusion, ESC proposes that a broad public discussion be held in order to define a clear strategy for the future development of the agricultural sector and creating an effective model for agricultural production in Bulgaria. This discussion should involve a wide range of representatives of the legislative and executive powers, social partners, experts, agricultural produces' associations, NGOs, and other stakeholders.