Commission Report (2002): Czech Republic

• Progress since the last Regular Report
  • Horizontal issues
  • Veterinary and phytosanitary issues, including food safety
  
  
• Overall assessment
• Conclusion

Chapter 7: Agriculture

Progress since the last Regular Report

Since last year`s Regular Report, the Czech Republic has taken further steps as regards its agricultural policy, in particular as regards preparing the administrative structures necessary to implement the Common Agricultural Policy and transposition in the phytosanitary field.

Agriculture in the Czech Republic accounted for 4.2% of gross value added in 2001, compared to 4.3% in 2000. Employment in agriculture accounts for 4.6% of total employment.

In 2001, overall agricultural trade between the Czech Republic and the EC increased largely, clearly due to the `` double-zero-agreement '' to liberalise trade in agriculture. EC imports of agricultural products originating in the Czech Republic increased by 11 % to EUR 548 million. EC exports to the Czech Republic increased by 12 % to EUR 1,215 million. The trade balance in favour of the Community amounted to EUR 667 million compared to EUR 589 million in 2000. EC imports were dominated by wines and vinegar, oilseeds, dairy products and residues from food industries. Residues from food industries, fruit and nuts and preparations of fruit and vegetables were the main export goods from the EC.

According to the Act on the State Budget for 2002, the state agricultural budget will amount to approximately EUR 0.42 billion, which constitutes 1.8% of the state budget. The support schemes in agriculture account for EUR 0.22 billion, while the support to forestry amounts to EUR 25 million. Support to water management amounts to EUR 14 million. The implementation of the National Programme accounts for EUR 23 million. Moreover, an amount of EUR 94.5 million has been allocated to the State Agricultural Intervention Fund, 93% of this amount is aimed for market regulation.

By the end of 2001, it was estimated by the Ministry of Agriculture that 97.9% of restituable agricultural land had been restituted.

Horizontal issues

With regard to preparations for the European Agricultural Guidance and Guarantee Fund (EAGGF), a decision was taken in May 2002 to divide the responsibility for administration of the CAP between two paying agencies, i.e. the State Agriculture Intervention Fund (SAIF) and the body currently performing the role of SAPARD Agency. According to the decision, the SAIF will be responsible for intervention, export refunds, import and export licences, administration of production quotas, and the collection of sugar production levies. The SAPARD Agency will be responsible for certain structural programmes and direct payments. The decision changes the previous plan to have one Paying Agency for all CAP purposes.

The SAPARD Agency received the conferral of management of aid and started accepting projects from applicants on 15 April 2002. The SAIF staff has been increased by 20 persons. The Agency is based on a fully electronic platform.

In July 2002, the Independent Market Information System (IMIS), currently managed by the Research Institute for Agricultural Economics, was put under responsibility of the State Agriculture Intervention Fund (SAIF).

In the past year, preparations have continued to establish the Integrated Administration and Control System (IACS). The identification of cattle has been obligatory since 2001 and provisions relating to identification and registration of pigs, sheep and goats, entered into force in April 2002. Preparations to have a fully operational IACS are well advanced. Recent aerial photographs (1998 -- 2001) covering the whole territory are available. The Czech Republic has opted for the methodology of physical blocks to build its land parcel identification system, i.e. blocks of parcels delimited by permanent boundaries such as roads, rivers, forests, etc. The digitalisation of these blocks has been completed. A register of special cultures was finalised in June 2002. The IACS unit in the Ministry of Agriculture has been reinforced by five employees in the past year.

With regard to trade mechanisms, a task force has been established to deal with the preparation of the relevant schemes after accession, i.e. the licence system, export refunds, securities and control mechanisms for trade with third countries.

In the field of quality policy, the Act on the protection of designations of origin and geographical indications entered into force in April 2002, aiming to set up the necessary control structures in this area by authorising the Czech Agricultural and Foodstuff Inspection (CAFI) to carry out necessary controls.

In the field of organic farming, the Ministry of Agriculture has prepared and communicated widely the Code of Good Farming Practice.

Concerning the farm accountancy data network (FADN), the current system, which is partly in line with the acquis, has been extended in the past year to cover more farms.

Two new sub-departments were established within the Ministry of Agriculture as of January 2002, one responsible for the agro-foodstuffs sector with regard to environmental matters and one dealing with all matters concerning the wine sector.

Common Market Organisations The SAIF has continued expanding its operations in the area of arable crops.

Concerning sugar, several decrees and government orders have been introduced to the previously existing sugar quota regime.

As regards specialised crops, steps have been taken to align Czech legislation with the acquis in the area of hops, through the pilot registration of hops' sales contracts. The Czech Republic has continued the harmonisation of its fruit and vegetable standards with those prevalent in the EU. A new Act on the State Agricultural and Food Inspection (CAFI) was adopted in April 2002, aiming to transpose the acquis with regard to quality control in this field. In the wine sector, a new Act on Viticulture and Wine Making entered into force in March 2002, aiming to align Czech legislation with the Community oenological practices.

In relation to animal products, the Classification Agency for slaughter animals was established in January 2002 to perform the classification of carcasses based on the common classification of carcasses system (SEUROP).

Rural development and forestry Work on the Horizontal Rural Development Programme (HRDP) has continued over the past year, covering inter alia agri-environmental measures. In April 2002, the strategic environmental assessment and ex-ante assessments of the HRDP started. The accreditation of the SAPARD Agency, which will be responsible for certain structural programmes after accession, was achieved in April 2002 (see Section A.b. -- Relations between the European Union and the Czech Republic).

Veterinary and phytosanitary issues, including food safety

In general, little legislative progress has been noted in the veterinary field over the past year with regard to common measures, animal welfare, veterinary control, control of animal diseases and animal health and animal waste treatment. However, further progress was made in establishing the system of animal identification, as secondary legislation relating to identification and registration of pigs, sheep and goats entered into force in April 2002. The Czech authorities are participating in the computerised network linking veterinary authorities ANIMO on a voluntary basis as of July 2002 in order to prepare for full application by accession. As regards public health protection, some of the plants processing products of animal origin which did not meet Community requirements on public health were closed in 2001.

In the field of control of animal diseases and animal health, the Czech Republic has joined the animal disease notification system (ADNS) after completing preparations for participation in May 2002.

In the phytosanitary field, good legislative progress has continued over the past year. In the field of plant health (harmful organisms and pesticides), a second amendment to the Act on Phytosanitary Care entered into force in January 2002. It aims to enhance alignment with the acquis on the registration of producers, growers and importers of plants and plant products, protected zones and import and export protection. Based on this legislation, plant passports were introduced in March 2002 and provisions concerning the registration and use of pesticides will enter into force in October 2002. The new Act on the Czech Agricultural and Food Inspection (CAFI) authorises CAFI to carry out monitoring of maximum residue levels.

As regards administrative capacity in the phytosanitary field, the Czech Republic further prepared for incorporation into the EUROPHYT system, upgraded the equipment of diagnostic laboratories and strengthened the central regulatory capacity of plant protection product registration. An amendment to the Act on the Central Institute on Supervision and Testing in Agriculture was approved in March 2002, laying down inter alia rules for performing specialised testing.

As regards food safety (see also Chapter 1 -- Free movement of goods), the Act on State Agricultural and Foodstuffs Inspection was adopted in March 2002, aiming to align the control of foodstuffs with the EC requirements. The Act will enter into force in January 2003. The Czech government approved a food safety strategy in December 2001. In accordance with this strategy, a special unit for food safety within the Ministry of Agriculture and a co-ordination group for food safety have been established with the aim of ensuring co-ordination between control bodies for foodstuffs and to set up scientific committees. Scientific committees were set up in July 2002 for veterinary issues, animal nutrition, plant protection in relation to the environment and foodstuffs.

Overall assessment

In the field of horizontal issues, continued attention should be paid to the further development of the two paying agencies, where the adequate structure, division of tasks and staff levels need to be ensured. The administrative structures needed to implement Community trade mechanisms are partly in place but need to be finalised. The same is true of organic farming. As regards quality policy, supervision mechanisms in line with Community requirements have been set up but need to be completed. As regards preparations for the Integrated Administration and Control System (IACS), the land register and the legal framework for animal identification and registration are largely in place but the establishment of an integrated system needs to be completed. The Czech Republic will have the possibility of testing the reliability of its system with its national schemes before accession, which should allow for adjustments if necessary. This will contribute to meeting the requirements of the acquis in this field. As regards the Farm Accountancy Data Network (FADN), the existing surveys are only partly in line with the acquis. There is a need to ensure collection of data and administrative capacity in conformity with Community requirements. co-operation on the exchange of data must also be ensured. The Ministry of Agriculture has been partly reorganised and generally functions well.

As regards the implementation of Common Market Organisations, the State Agriculture Intervention Fund (SAIF) has introduced a specific market regulation in order to prepare itself for taking up the function of an intervention agency. The SAIF is currently not fully equivalent to intervention agencies in the EU, and needs to be upgraded in order to cover all the specific instruments of Community market regulation. The independent market information system needs to be improved and integrated in order to comply with Community requirements on price data monitoring and reporting. Legislation establishing quality and marketing standards for arable crops needs to be completed. A system of production quotas for sugar has been established, which needs to be further aligned with the acquis. The Czech Republic also needs to complete market regulation for specialised crops. In the field of fruit and vegetables, quality standards have been aligned with those prevalent in the Community. However, control procedures and the recognition of producer organisations need to be further aligned. In the field of wine, an efficient connection between the cadastre and vineyard register needs to be completed. Furthermore, inspection practices in this field need to be aligned with Community practices. Further legal alignment is necessary to complete preparations for implementation of the CMO in this field. In relation to animal products, a system of production quotas for milk has been established, which is partly in line with the Community system but needs to be further aligned with the acquis. The (SEUROP) has been used for pigmeat since April 2001. Legislation establishing quality and marketing standards for animal products needs to be completed.

The Czech Republic is well advanced in the area of rural development and forestry, where the horizontal legislation and administrative structures for implementation have largely been put in place. A first draft of the Rural Development Plan has been prepared.

Concerning the veterinary field, an amended framework law remains to be adopted to ensure transposition of veterinary acquis, e.g. in the fields of animal welfare, rules concerning imports from third countries, animal identification and veterinary controls. As regards veterinary control in the internal market, the system of checks during transport and at destination needs to be aligned. The fee level for veterinary border checks is in line with Community requirements but the overall system of financing of veterinary controls needs to be further aligned with the acquis. The identification and registration of bovine animals, obligatory since 2001, is progressing well and development of the system for tracing bovines is in progress. Border inspection and import checks need to be reinforced and aligned with Community requirements. Considerable efforts are still needed for the border inspection post at Ruzyne airport Prague to be ready at accession. The post still needs to be completed and suitably equipped, and the staff should be trained with regard to border inspection procedures.

As regards plants processing products of animal origin, the Czech Republic still needs to revise upgrading plans, fully in line with the acquis. The State Veterinary Administration should also closely monitor the implementation of the plans.

In the field of control of animal diseases and animal health, the Czech Republic has joined the animal disease notification system (ADNS).

As regards animal waste treatment, most of the rendering plants for high-risk waste are operating according to Community requirements, but plants for low-risk waste remain to be aligned. In order to ensure alignment with Community rules on specified risk material, the Czech authorities still need to ensure the removal of vertebral column from the feed chain. Also, cadavers must be excluded from the feed chain.

As regards public health protection, not all establishments processing products of animal origin yet meet Community hygiene and public health requirements. Classification of processing plants according to the level of compliance with Community rules has been carried out and modernisation plans have been established to reach Community requirements. It is important that the classification of its establishments is fully reliable and that the severity of deficiencies to be rectified is correctly estimated. Someestablishments evaluated as having little prospect of meeting the relevant acquis have been closed. Serious efforts are needed to ensure that a legal basis is put in place for the implementation of the acquis on hygiene, so that the upgrading plans for establishments can be adequately assessed and can take full account of all relevant provisions of the acquis concerned. Accordingly, a review of the upgrading plans will be required, and strong monitoring of the State Veterinary Administration will need to be ensured.

The State Veterinary Administration (SVA) as well as the State Agriculture and Food Inspectorate (CAFI) generally function well. The CAFI information network has improved but an on-line connection with the Customs Directorate needs to be established.

In the phytosanitary field, a certain level of legislative alignment has been achieved. In the field of plant health (harmful organisms), inspection and control structures appear adequate, and plant passports have been introduced.

In the field of quality of seeds and propagating material, appropriate inspection and control structures are largely in place. A new Act on Seeds and Plant Propagating Material remains to be adopted to complete alignment. As regards pesticides and residue levels, not all maximum residue levels are yet fully aligned with Community rules. Full alignment with the acquis in this field, including measures relating to registration of plant protection products, will be achieved by a new Act on Phytosanitary Care.

In the field of animal nutrition, the main parts of the acquis have been transposed. However, full alignment still needs to be ensured with regard to Transmissible Spongiform Encephalopathies (TSE)-related acquis in this area.

The State Phytosanitary Administration generally functions well, and the situation with regard to specialised equipment is improving.

With regard to food safety (see also Chapter 1 -- Free Movement of Goods), the institutions for implementation are in place, primarily divided between the Ministries of Health and Agriculture. The State Veterinary Administration is the main supervisory body for animal-origin foodstuffs. Its structures for control and inspection generally function well. The Czech Agricultural and Food Inspectorate (CAFI) supervises the safety and quality of food, and its laboratories are accredited according to international standards. The Hazard Analysis at Critical Control Points system (HACCP), which involves measures to identify and control hazards related to food processing and the monitoring of safety requirements, is obligatory for all food producers since January 2000. As regards BSE, the Czech Republic has introduced a comprehensive testing programme, which has progressively been aligned with the Community programme, and a proper rendering system has been ensured.

Conclusion

In its 1997 Opinion, the Commission concluded that further alignment to the acquis was still necessary, although significant progress had been made in adopting the measures mentioned in the Commission's White Paper. The Commission added that particular efforts were needed in relation to the implementation and enforcement of veterinary and phytosanitary requirements and upgrading of establishments to meet EC standards. Furthermore, the administrative structures needed to be strengthened to ensure the necessary capacity to implement and enforce the policy instruments of the CAP. Further restructuring of the agri-food sector was also needed to improve its competitive capacity. The Commission concluded that if such progress were accomplished, accession in the medium term should not be accompanied by significant problems in applying the common agricultural policy in an appropriate manner.

Since the Opinion, the Czech Republic has made steady progress, in particular as regards the strengthening of administrative capacity to implement the CAP and the transposition of phytosanitary legislation. The overall level of preparation in the agricultural sector is good, except as regards veterinary legislation.

Negotiations on this chapter continue, although all negotiation issues in the veterinary and phytosanitary fields have been clarified. In the veterinary field, the Czech Republic has been granted a transitional arrangement for public health for some establishments for animal products (until 31 December 2006) and for animal welfare, for some establishments, to fulfil certain cage height requirements in non-enriched cages for laying hens (until 31 December 2009). The Czech Republic is meeting the majority of the commitments it has made in the accession negotiations in this field. However, delays have occurred, compared to the original time schedule, on completing alignment in the veterinary field. This needs to be urgently addressed.

In order to complete preparations for membership, the Czech Republic`s efforts now need to focus on continued strengthening of administrative structures for the implementation of the Common Agricultural Policy and on ensuring the harmonisation of veterinary legislation (adoption of the framework law and technical legislation).

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