 Thank you. Good morning, everybody. I would also like to thank Karen and Jamie for also spoiling me. This is my fourth time in the last eight years. The EU is a peculiar beast that has been moving over the time, so we'll see what New York will have to offer today. What I will try to do is focus on three things, the shifting environment of agricultural markets, its impact on existing trends, drivers and challenges, and the role of the common agricultural policy and all that. And I will start by focusing on the difference that two years make. I was here back in 2014, what we've seen since there is a generalized GDP slowdown, especially in emerging economies, an oversupply that leads to a generalized decline in commodity prices, not led, still leading. And that includes also prices in all major agricultural markets. This is a graph I presented to you two years ago. It is the real commodity prices of the World Bank index. With green, we have agricultural prices. The World Bank does not include livestock. FAO does, but it doesn't change the overall trend. And you've seen that despite the fact that the trend has been downward, it started sloping upward after 2000. We also have in red energy prices. The dotted purple line is fertilizers and in blue, the metals and minerals. And the point I was making two years ago is the dramatic change in the manner by which prices evolved after 2000, especially after 2005, with three parallel trends, moral utility, the movement of all these prices, and a higher price level. Now, one thing you would notice in 2014 is the fact that all prices have started moving downwards, except for energy. Of course, if you look what has happened today, energy is the one that has actually come down to earth much faster than everything else. Now, these price developments generate a lot of uncertainty. Last week I was participating in a discussion in the Committee for Agriculture of the European Parliament. I heard some things that were not so much of a compliment, what I made the point that is not actually volatility. That is the biggest problem we see. But the movement and the uncertainty about the price level, that doesn't mean that volatility doesn't exist. But if you put volatility in perspective, this is the annual change in the real commodity prices you've seen in the previous graph. This is what has characterized agricultural since the 1960s. Obviously, we have had some increases in annual variation, but not as dramatic as we've seen in the past. Clearly, fertilizers have been much more volatile, and so has been energy. But what is the characteristic of all these developments is the fact that what we have had in the last four years is a textbook definition of a downward price trend. And this, to us, seems to be more worrying if you want on the volatile aspect. If you look at the monthly change in nominal commodity prices, this is nominal and more recent, starting in 2007, you see pretty much the same thing. This is what has been happening in agriculture. This is what has been happening in fertilizers, but the biggest difference this time around has been energy. And energy here is not just crude oil. It's also coal, and it's also natural gas that has broken in three different markets. Now, if you summarize all these developments, what you have is in the top line is the percentage, the cumulative percentage price change from the period 97 to 2008, or the last peak of agricultural prices up until the beginning of the financial crisis. Annual changes when prices went down, up and down again, up until 2015, what has happened 2015-2008, whatever thing dropped, and the bigger picture. But let's look at the 1997-2008, clearly upward trend in prices. Agriculture grew by close to 30%. The growth in fertilizers and energy was 10 times as much. If you take the period of declines and you see what has happened from 1997 up until today, these 18 years, the growth, the cumulative growth in agricultural prices in real terms is 10%, but it's still only one-tenth of what fertilizers and energy have done. So there is a clear deterioration of the terms of trade for agriculture. And in our view, this explains much more than anything else, the uncertainty and the anxiety that farmers seem to indicate. If you look at all the type of demonstrations that we have had in Europe, and you look at the economic situation of the farms, that doesn't necessarily explain why people are worried, but what explains why they're worried is the fact that they don't know what is coming afterwards. Are we going to go to an upward or a downward trend of prices or what again? Now, basically this conference is pretty similar to what, for the first time public, we did also last December in the EU. We have been doing it internally for quite a number of years and USDA also much longer than anybody else. It is about trying to figure out the food supply and demand interaction. We focus on the EU looking at the world markets. And we know that there are three broad drivers, microeconomic and trade environment, population diets and the food chain and climate, energy and natural resources. From this interaction, the point that is coming out to us clearly recently is the fact that price and income prospects have turned more uncertain in recent years than what we were discussing three or four years ago. And this is what I would like to focus a little bit more right now, some of the main uncertainties on the macroeconomic picture. There is a persistence of a sluggish GDP growth, which is now expanding to the emerging economies. And what is interesting, and this is something we presented in our conference back in December, is that if you look at the IMF forecasts, which go five years down in the future, or the World Bank and other forecasts do not differ, every time that we try to see what will happen in the next four or five years, and then we compare three months or six months later what has happened, things turn out to be lower than expected. So there is more potential that is not exploited, and that has of course an impact on the demand of many commodities, including food. The exchange rate for volatility is a major uncertainty. In Europe we have the tendency to focus on the exchange rate between the euro and the US dollar, but exchange rate movements have been in very different directions. There are parts of the world where the decline in commodity prices is seen as an increase for producers. Brazil is a typical example lately, and of course there is a big question mark of the long-term price level of crude oil. Joe has been together with us in the workshop where we organize every year to assess our medium and longer-term outlook, and he has seen in recent years every time whatever we assumed for crude oil we had to change it downwards. There are two schools of thought right now. There are those that believe that prices will stay where they are pretty much today, a little bit higher, and those that believe that after some years this investment will lead to a greater increase. Whatever it is, this uncertainty has implications about our capacity to see and assess where prices are going to evolve. On the demand side picture there are population dynamics that are characterized by very significant asymmetries in trends, and not everywhere do we see the same pattern of demand growth, and I was looking at the at Mary's slides on beef. We have had a persistent downward trend in beef consumption in the European Union. I've seen you have also that but you expected to stabilize. We went through this debate some years ago, never materialized. There are dietary patterns that also reflect very different and sometimes counter-intuitive developments. We have the tendency to believe that what we eat in our regions is something that the other parts of the world will do it in the same way, and there are also diverging trends and cross-cutting effects within and between commodities, especially between livestock and feed grains. On the supply side picture there is a wider energy picture which is pretty uncertain, climatic events, and also diverging productivity patterns which do not only affect yields, they have to do with research and development, they have to do with innovation. They also have to do the fact that in the European Union most of the productivity growth has been driven by the outflow of labor from agriculture, and this is something that in the current context of the economic situation is not necessarily positive overall if it continues. Now the main conclusions of the bigger pictures about the commodity markets, we seem to be going more to a fundamental drivers in various commodities and not driven by what happens in crude oil or the overall boom of commodities. I put there that the super-cycle effect of China seems to be over. How much longer can you keep growing with 50% GDP investment? What does the shift towards increasing domestic demand mean? And the impact of oil price, the impact on price level seems to us to be more clear than the impact on movement or volatility. There is a new trade environment. We do expect of course a trade in food commodities will remain strong, that's a big difference and part of the reason has to do with the fact that where demand will grow more production, domestic production is not expected to grow as fast, but we're talking about agriculture and there is always a surprise around the corner and there is a new price environment which clearly indicates and that's a point we have kept at the terms of trade in for agriculture have deteriorated which generate more need for increases in productivity. Now we have tried to assess what is happening with a the green direct line is where we expect the outlook of the wheat price to be, but there is a wide range of assumptions we do more than 700 different simulations that are consistent among themselves with the different scenarios. The blue one, we call it a high price scenario because it arrives at a higher price, but as you see at the early stages it comes with a much lower price development. The low price is more consistently pretty low if you keep doing this you see a path that is within a range of the 10th and the 90th percentile, but this is a pretty wide range. Now somewhere in between I think in Mary's graphs also the same thing was happening, we seem to believe that prices will stabilize in between the highs and the lows of what we've seen in the last 10 years, but this is a pretty wide range and that has different implications. Now where does the cap fit in all this? I think you've seen also this graph or we'll go over it. On the left hand side you have the nominal in billion euros expenditure of the common agricultural policy budget. On the right hand side is the share of the cap as a percentage of the EU GDP. Why EU GDP? Because you hear the story that we spend and we do spend a lot of the EU budget, but the EU budget is a very small part of total public expenditure. It goes, most of it goes through the Member States. Now export subsidies are a thing of the past. It was only 2009 when I was here for the first time that we were using export subsidies for dairy. Market measures also are at pretty lower level and most of it also goes to producer organizations for wine and fruit and vegetables, so it's not a traditional type of intervention measures. We have introduced couple support, which as you have seen with the recent reform has gone up, it's still less than 10 percent, but gone up more than what we expected. We have introduced decoupled support, which continues to be decoupled, but it's broken in two different parts. 30 percent of total payments are given in the form of green measures, which is the obligation to respect some practices, permanent grassland or crop rotation that are considered to be necessary to reduce emissions or for soil erosion. We have agri-environmental measures, and also on top of that we have some rural development measures linked to investment. The path, the percentage of expenditure as percent of GDP is going down, and I want to point out three areas here that have already generated debate that will continue in the future of the cap. The first one is the relationship between decoupled and couple support. I know for some this seems to be little differences, they tend to split the hair. In our view, the couple support is very different than couple support because it allows farmers to adjust, and if they see that they shouldn't stay in a certain product, they have to move into another product, whether this is beef, whether this is a dairy cow, or whether it is processed tomatoes to bring an example that is more recent to some of you. This debate does not only have to do with what type of measures you consider more or less efficient. In our analysis, we clearly indicate that it's only the extensive livestock that we consider should receive couple support because in the absence of any support you will have land abandonment and negative environmental impacts. But the fact that member states chose to increase couple support more than we expected or wanted had to do with their concerns about keeping production on some of these products and some broader food security worries. Now, there is a big discussion about the potential overlap between targeted agri-environmental measures and green measures. Green measures cover roughly 80% of all agricultural land. The agri-environmental measures are much more targeted and cover 20% of land, but we expect a lot of debate in the future about what to do with them, especially because the system tended up to be more complex than we expected when you have 28 member states and more than 750 members of the European Parliament representing these 28 member states negotiating the final conclusion. It's only natural and part of the democratic process that simplicity will continue to remain a challenge. And finally, we will have once more a debate about how much we spend for the cap, despite the fact that the cap will be going down in the overall budget, and especially more and more focused about the performance. Do you meet your objectives? Do you deliver what you want? Now, this type of path reform has had an effect several, actually. The first one is the long-term trends in the EU and the world price gap in percentage terms. And you've seen that in cereals where we're reformed first, we have been for quite some time at world price levels. The same is the case for dairy, sugar and beef have some way to go, but they're also coming from much higher levels. Where is the most impressive impact of this reform path has been in our agri-food trade. We have had a slight trade deficit. We have a surplus right now. We export almost 130 billion euros and we import more than 113. So this is, we're both the largest exporter and important of agricultural products. And a significant part of what we export is value-added. And that shows why this has been a more resilient to the economic crisis and to exchange rate fluctuations. Now, it's not possible to talk here about, I wanted to talk about what it doesn't allow me to do. Now it does. Now, there is the area where we do have real challenges right now. The dotted blue line is the decline in our intervention price. We have intervention for butter and skim milk powder. This is the fresh milk price equivalent, more than 20%, drop over the years. The green line is the world market price and the blue is the domestic EU price. The period when we had the quota, seasonality was the only characteristic and a huge gap with the world market prices. Then there was a period after the drought in Oceania where prices went up and then collapsed. We started the process of moving towards what we call the soft landing, the gradual abolition of the quota and adjustment of our production. And we had the collapse of prices in recent years. There are many that say, okay, we told you so inside the EU, you abolished the quota, this is what was going to happen. It's not as simple as that. First of all, if you look at the cumulative change in milk production, not in the last couple of years, from 2007 to 2015, on the left-hand side, you have in million tons what has happened in the EU, US, New Zealand, very little in Australia, something in Argentina. Clearly because of the size of the EU, we have increased much more than others. But if you look in percentage terms on the right-hand axis, how much this represents in terms of increases were at roughly 10%, 12% for the US, more than 30% in New Zealand. It is clear that if you look at the short term on the demand side, from January to November 2015, world consumption reflected by imports has gone down by 1.1%. This is the first decline since 2008. If you look at what happened after July, you see some positive developments because it seems that demand has picked up again. On the supply side, all the main producing regions increased supply by 1.6%. We did more than that, 2.5%. As a result, there are multiple factors. I mean, there are the member states that are more competitive, that have put more. There has been an extremely good weather, also with grass-based dairy production that had an impact. When you're looking to trade, there is an expected future world import growth of roughly plus 2% annually. We still see that. Our exports went up by 5% from July to November. That is despite the Russian ban. What is the Russian ban for the European Union? It means that we lost our largest market. It means to give an example in butter, in cheese. 30% of all our cheese exports were going to Russia. Now, if you put this in the broader perspective, there are multiple causes that lie behind the recent dairy crisis. We can agree or disagree about which one is more important, whether it is the slowdown in Chinese imports, the Russian embargo, the increase in the EU dairy herd or the exchange rates. What is important to keep in mind is what we have done, which is that we targeted income and cash flow of farmers, and we used existing measures and focused on the transparency and the improvement in the food chain with the agricultural markets task force. What we didn't do, despite enormous pressure internally, is we did not touch the intervention prices. We did not go back to any ideas of supply control because we think that the long-term competitiveness of the sector is very important, and we also kept arguing that similar price pressures exist also under very different policy regimes. I'm bringing here a graph because we have a lot of pressure internally right now by some quarters in the European Union. Why don't you do what the US is doing? First of all, the US has a very different structure of agriculture than the EU, but also because what we have seen is that the EU farm income has been more stable than the US farm income in the last 10 years. We have not had the dramatic increases in the farm income that the US has had. Neither had we had the dramatic declines of the last couple of years because we believe that the couple support by providing a fixed layer of income support to farmers allows them to make adjustment faster than what the counter cyclical type of support will do. Of course farmers tend to forget the money they get when the prices are high and remember to ask for more when the prices are low. These are farmers around the world, I think, and it's a normal thing to happen. But if you look at the overall impact of policies, you have a clear conclusion. And that's my last slide. The bottom line in terms of what we want to do, there are three different ways of seeing agriculture in the European Union and in my view elsewhere. The first is as a 2% sector, which becomes very easily the 0.2% sector. That's a share of your agricultural in the economy. And then if you start focusing only on the economic contribution of primary agriculture, very soon you have narrow product specific interests that drive responses that divide actually the broader policy objectives and always put the policy in the defensive. You have to justify the money that you receive instead of focusing on your objectives. Agricultural is also the 40% sector. This is its contribution in land and land management. And there land use and changes in its use addresses both environmental and climate change challenges. It provides a wider territorial policy scope and it addresses the supply chain functioning, which is also relevant for land use and for food waste. And agricultural is also the 100% sector, the sector where everybody is affected because everybody consumes food. And food demand driven policy concerns in our view unify better the policy focus. They look at the potentially broader upstream and downstream and horizontal linkages of agriculture and also make a better linkage with technology and innovation and could potentially determine the net employment and environmental effect. And I'm talking here about the net effect because agricultural is a job loser when it comes to the number of farmers. The real question mark is what type of additional jobs do you create in rural areas? Whether these are linked to the food chain, to services, to research, to innovation, to agro-tourism, which is a typical European case. In Europe, the agri-food sector is the largest industry in employment, larger than the automotive industry. So from a policy prospect, three things to keep in mind, and especially when we start pretty soon we'll start the debate about the future on the cap. It is extremely important to be able to anticipate future challenges and in our view with climate change and the commitments that the European Union has made, land use is going to be the new big policy driver. Second conclusion, try to do no harm in your policies and that's what we think we have been doing by shifting away from products to a broader policy that does not introduce trade distorting measures. And third, always keep in mind that any reform brings a broader increase in overall welfare, but you have to have mechanisms whereby the winners would compensate the losers and that implies territorial losses, losses in terms of potential environmental impacts and in terms of structural adjustment. So I think the cap is such a policy that it has a long history of being criticized. I think also it's about time for some recognition, because a lot of the nice things about what has happened in ACD bars have to do a lot with the path of our reform. And with that I thank you for your attention.