The EU executive says payments to farmers under the reformed policy must be distributed more fairly to benefit the newer EU member states of Central and Eastern Europe that joined the bloc in 2004.
"The CAP has never been so close to a crisis of legitimacy as it is today," EU Agriculture Commissioner Dacian Cioloş told EU lawmakers in Brussels.
"This is an opportune moment to refocus [the CAP] in line with the expectations of society," he added, referring to challenges such as food security and climate change.
The central plank of the Commission's proposal is to overhaul the distribution criteria for payments to farmers in order to take account of the EU's eastern enlargement.
Current aid criteria are "inherited from the past," the Commission explained, saying that aid amounts were calculated based on the production volumes of the "old" EU member states in 2000-2002.
Payments between old and new member states currently vary from over €500 per hectare in Greece to less than €100 in Latvia. "We now need to turn these into a more objective and fairer mechanism for all farmers and member states," the EU executive explained in a briefing note.
The Commission ruled out an EU-wide flat-rate subsidy, but said farmers in all countries could receive a minimum percentage of the EU average rate – currently about 250 euros per hectare.
A ceiling on payments would also be introduced to avoid the funds being siphoned off by large industrial farms at the expense of smaller ones.
The proposals, unveiled yesterday (18 November), contain no details on the future size of the CAP budget, which consumes about €55 billion of the bloc's €130 billion annual budget.
The debate will start in July next year, when the Commission makes its proposal for the EU's long-term budget (2014-2020).
Supporting diversity in agriculture
The Commission's other big priority is to "do more to support the diversity of European agriculture" with a rural policy dimension that includes "a green component".
Agricultural practices which could be supported under the scheme could for example include maintaining green cover during the winter period to enrich the soil, rotating crop rotation, creating ecological fallows or permanent pastures, the Commission said. An impact assessment is currently underway to determine which ones will be eligible.
Subsidies must be based on environmental criteria, the Commission said, with support "targeted at active farmers who really need it".
The EU executive also underlines the importance of local markets and direct sales to support innovative farmers. "Small farms do not necessarily have to become bigger in order to be more efficient," said EU Agriculture Commissioner Dacian Cioloş. "They sometimes better respond to the demands of the market," he said.
A "risk management toolkit" would help in dealing with market uncertainties and income volatility by providing "a safety net for farmers," Cioloş said.
In its communication, the European Commission outlined three options for the future EU farm policy:
- A minimalist option involving a more equal distribution of funds to benefit newer EU member states while continuing with the reorientation of the policy to meet new challenges. However, there would be no changes to the current direct payment system.
- A reformist option that would also involve more equal distribution of funds to benefit newer EU member states. Compulsory additional aid would be linked to specific "green" goals while a new scheme would be introduced for small farms. Support would be more focused on meeting environmental and climate goals.
- A more radical option that would see a complete phase-out of direct payments in favour of environmental and climate change objectives.
A public consultation held earlier this year identified food security, environment production and rural diversity as the three main goals of the future policy.