2.  Poland had undertaken enormous and costly efforts in order to establish administrative capacity to manage the Common Agricultural Policy. It would be desirable now to provide farmers with stable medium term rules. Except for the sugar CMO there is no imminent pressure to undertake significant CAP reform. Therefore we do not see the need for further CAP reform till the end of the next financial perspective.

  3.  Farmers in the old Member States are receiving much higher financial support from the EU budget than farmers from New Member States (NMS). This is because the direct payments for NMS are phased in over 10 years. Even if there is a reduction of the regional and structural aid for old Member States this difference would remain very high for years. It is reasonable to assume that the needs of NMS in terms of rural development are enormous. Therefore redistribution of those funds is unavoidable.

  5.  New direct payments in the sugar sector will not significantly increase Pillar 1 spending—as sugar reform will reduce the spending for export refunds for sugar.

  7.  Concessions on export refunds may have a significant impact, especially on the dairy market. Reform of the milk sector may be necessary in order to accommodate on the internal market those quantities of milk which are currently exported from the EU with refunds.

  9.  Level of expenditure in the new financial perspective should correspond to the scope of new tasks to be financed from the EU general budget. Levelling of developmental gaps in an enlarged EU is not possible without significant financial outlays. Moreover, if financing of new policies generating growth or pertaining to the areas of the CFSP and JHA is to be allowed for, expenditure from the EU general budget needs to be significantly raised up to the level of 1.24 per cent EU GNI. Such budget volume should guarantee adequate resources for financing of all actions under the framework of European policies. Any potential lowering of this ceiling cannot take place at the cost of structural actions in the less affluent Member States.

  A fundamental part of expenditure under the Common Agricultural Policy was set out during the European Council summit in Brussels in 2002. Poland accepts this agreement whilst stressing that a CAP reform needs to be effected in a manner that will not discriminate against New Member States—ie in the fields and in the scope of mechanisms that were not covered by transitional periods in the Accession Treaty, New Member States should be treated as stipulated by the provisions of EU treaties, on equal footing with present Member States. Importance of CAP's second pillar also needs to be emphasized in the context of rural areas' restructuring needs in New EU Member States.

  The respect of the agricultural ceiling set in Brussels in 2002 is of utmost importance for Poland. Any solution proposed should respect the agreement reached in Brussels in 2002. The expenditure for Bulgaria and Romania under CAP should be added to the ceiling of funding as set in Brussels.

  We think that improving structures in poorer areas would be central to achieving the aims of Lisbon and Gothenberg towards a more competitive and sustainable EU economy. With respect to allocations to rural development, we postulate, assuming the criteria is related to cohesion giving preference to less wealthy states, which have so far enjoyed little support in this area. The criteria should first of all take into account the rural development needs in New Member States. Those countries have enormous needs in the scope of improving farming and rural infrastructure.

7 February 2005