This commentary is excerpted from a research project on the public debate on CAP reform in 10 EU states carried out by the Institute for Rural Development Research in cooperation with the Chair for Economic Development and Integration at Goethe-University Frankfurt am Main and edited by Cordula Rutz, Rainer Klump, Jörg Schramek and Winfried von Urff.
There was hope that the changing nature of the CAP debate (now involving more and a far broader range of stakeholders than in former times) and the new institutional setting that gives more decisionmaking power to the European Parliament would lead to a CAP reform that sets the CAP on the right path to meet the current and coming challenges. Yet it seems that our hopes could be disappointed.
We see the need to develop a long-term strategy or vision for the CAP. If such a strategy is not developed, the outcome of any reform attempt is likely to be characterised by inconsistent compromises dominated by the specific interests of powerful member states or lobby groups.
In particular, it is necessary to reconsider the function of direct payments. Only if it is decided and clearly communicated what purpose direct payments should fulfil, consistent and justifiable decisions on the future of direct payments can be made. Are direct payments a compensation measure for a change in policy, as originally intended, a permanent income support measure or do they serve as remuneration for the provision of public goods? This concerns, inter alia, the question of who should be entitled to direct payments in the future and what distribution criteria, for example land size or employment numbers, are appropriate.
There is a strong demand for greater distributive justice which is seen to increase the social and political acceptance of the CAP. However, the measures proposed by the European Commission, like the capping of direct payments received per farm are, at least in their current form, inappropriate. The capping of direct payments is likely to have unintended consequences resulting from avoidance behaviour by affected farmers, for example the artificial splitting up of large holdings or pseudo-employment. Ways to minimise such behaviour would probably involve excessive administrative efforts.
In order to reduce the complexity of the policy and the resulting administrative burden, the CAP should move from an input- and measure-oriented policy to a target-oriented one. Changes in policy should be assessed on the basis of their cost-effectiveness.
The greening of direct payments, as a further stage after the decoupling of direct payments and the introduction of cross-compliance, offers the chance to systematically integrate environmental objectives into the first pillar of the CAP. The greening has the potential of reaching areas with intensive agricultural production and therefore achieving a broad effect across the whole of Europe. If the potentially positive environmental benefits of the greening obligations are not realised, as the measures are watered down in the political process, there is the risk that the public acceptance of direct payments to agriculture further diminishes.
Improvements that could make the greening obligations both better targeted as well as more acceptable to farmers (for instance, allowing local groups of farmers to allocate the ecological focus areas between them) should be considered.
The greening should establish a new, higher baseline for the agri-environmental measures of Pillar 2. In order to secure that more demanding agri-environmental measures remain attractive the introduction of an incentive component would be important.
The second pillar generally suffers from inconsistencies as it currently contains an extremely broad range of policy measures that sometimes pursue contradictory objectives (for example, in the case of investment support and agri-environmental programmes). This problem should be tackled, for example, by making sure that all investment support is in line with the environmental goals pursued by the policy.
Co-financing rates must reflect EU priorities and ensure that all member states and regions have an incentive to pursue those objectives that are regarded most important from an EU perspective.
The new architecture of the second pillar with greater flexibility for the member states and the multi-fund approach offers chances, but also poses risks. It will be necessary to carefully assess whether the hoped-for results are realised or whether the new structure leads to one-sided rural development programmes or standard programmes that have merely been relabelled to fit the new priorities.
Last, but not least, food security is not only about increasing production. It is necessary to ensure that the CAP supports the realisation of human rights, especially the right to food in all its dimensions.
The complete results of the research project – the Synthesis and assessment of the public debate on the reform of the CAP after 2013 – are available here.