When the European Commission proposed overhauling the CAP in October 2011, it called for fundamental changes in the 2014-2020 framework. These included the reform of direct payments to farmers (Pillar 1) and changes to the rural development fund (Pillar 2); the end to quotas and other forms of market support; and a greater emphasis on environmental performance.
While the final document retained some of these goals, the parliamentary process and final negotiations led to a law that in most cases cut middle ground and gave the 28 member states more leeway, including over new environmental performance rules.
Under a separate agreement on the EU’s €960-billion budget for 2014-2020, spending for agriculture and rural development will be around €380 billion, with some €280 billion set aside for direct payments to farmers and around €80 billion for rural development. The rest mainly goes for export support.
Agriculture was spared from major cuts made elsewhere in the EU’s spending framework.
Besides supporting farmers, CAP supporters see the new rules as enhancing food security in a world facing climate shocks – such as crop-destroying droughts in the summer of 2012 and floods in Central Europe in June 2013 – but also helping farmers compete with cheaper imports from emerging markets in Latin America, Asia and Africa.
The post-2013 CAP addresses some of those concerns by prolonging production quotas in some sectors and establishing a risk-management fund under Pillar 2 to help insure Europe’s farmers against climate change and pest infestation.
"This agreement will lead to far-reaching changes: making direct payments fairer and greener, strengthening the position of farmers within the food production chain and making the CAP more efficient and more transparent,” Dacian Ciolo?, the commissioner for Agriculture and Rural Development, said on 26 June 2013 as the freshly minted deal was presented before the Parliament’s agricultural committee.
“These decisions represent the EU's strong response to the challenges of food safety, climate change, growth and jobs in rural areas. The CAP will play a key part in achieving the overall objective of promoting smart, sustainable and inclusive growth," Ciolo? said.
Despite its monolithic political and fiscal importance for the EU, agriculture is a small part of the economy: it accounts for 1.7% of GDP and 4.6% of employment, OECD figures show. Agri-food products were 6.5% of exports in 2009.
Money: Less for big farms, more for harmonisation
In Robin Hood fashion, the new CAP gradually reduces the Pillar 1 payments to farming corporations and large landowners receiving more than €150,000 per year although the deal left unresolved a cap on how much any farmer could receive.
The new rules stipulate that each farmer receive at least 60% of the average national or regional direct payment by 2019, a reshuffling that advocates say will help smaller landholders.
In 2013, 20% of farmers were to receive 80% of the direct payments under the CAP’s Pillar 1, leading to criticism that corporations and celebrities – including the British monarch – were among the big beneficiaries of farm subsidies.
The agreement also seeks to close the subsidy gap between farmers in the 15 older EU member states and the 13 joining after 2004, including the most recent entrant, Croatia. This became a rallying point for Baltic farmers, who received some of the lowest payments in the EU, typically one-third of their counterparts, or €100 per hectare compared to the more than €400 per hectare for farmers in the Netherlands, Belgium and Italy.
Member states will also be required to move towards paying farmers based on the hectares they cultivate, replacing the varying schemes administered by national governments that also varied between newer and older EU states.
The new “basic payment system” will require a uniform payment per hectare and obliges national governments to devote at least 70% of their Pillar 1 funds to these payments.
The CAP deal also sets in place the gradual harmonisation of payments between the older and newer countries, requiring that no single state receives less than 75% of the EU average by 2019.
Also under the new rules, outdoor sports and recreational facilities, airports and railways and water treatment facilities will no longer be classified as providing agricultural benefits. The agreement’s inclusion of a definition of “active farmer” was praised by reformers who saw the old rules as ripe for abuse.
Support: A boost for young, small farmers
The CAP is sprinkled with incentives for young people and smallholder growers to stay in farming, a recognition of the need to reshuffle the demographics of a trade where an estimated one-third of farmers are over 65.
Under the deal, farmers with a few hectares of land could qualify for an additional payment of up to €1,250 per year, while national governments could use up to 2% of their CAP Pillar 1 funds to encourage people under the age of 40 to become farmers.
“We have positively discriminated in favour of young farmers to give them mandatory top-ups, which is good for the future of farming in Europe,” Simon Coveney, the Irish farm minister who helped negotiate the final deal, told the Parliament's agricultural committee on 26 June.
Joris Baecke, president of the European Council of Young Farmers (CEJA), also welcomed the deal. “This is an historic moment for young farmers – the first reform to include a mention, let alone a mandatory measure for young farmers under Pillar 1.”
The agreement also opens the door to giving under-40 farmers extra financing under Pillar 2, which provides money for rural development and conservation projects. Through this programme, they would be eligible for business start-up grants (up to €70,000) while small farmers would qualify for start-up aid of up to €15,000.
Pillar 2 – which accounts for about 20% over overall CAP spending – proved to be a divisive issues during the negotiations. Farm ministers backed efforts to tear down the firewall the Commission proposed between the two pillars and to allow national governments the flexibility to shift Pillar 2 funds to Pillar 1 to provide extra income support to food producers. Critics argued this would open the door to farmers being paid twice for the same work.
However, environmental campaign groups welcomed the last-minute decision to require that 30% of Pillar 2 funds be set aside for conservation projects, reversing earlier efforts to reduce the minimum requirement.
Liberalisation: A U-turn on quotas
Members of Parliament exercised their power as co-equal negotiators to alter longstanding commitments to end remaining production quotas and market-support mechanisms. Parliament gained the new legislative authority over the CAP under the Lisbon Treaty of 2009.
MEPs used the power to upend market liberalisation efforts backed by the Commission, agreeing to extend sugar quotas and vine planting rights that were to have expired by 2016.
French MEP Michel Dantin (EPP), who led the efforts in the Parliament’s agriculture committee on the quotas and planting rights, welcomed the end agreement.
“We have now reinstated the capacity for organisation and management,” Dantin told journalists. “Farmers now have the certainty that they will not be abandoned by their public authorities.”
Sugar quotas will end in 2017, two years later than planned under a 2005 agreement. MEPs succeeded in introducing a new vine planting scheme after 2016 that will allow for a gradual growth – up to 1% per year – rather than the blanket end of protections for grape growers.
A new Crisis Reserve Fund is also to be created using Pillar 1 money, though funds that are unspent from one year would be refunded the following year.
These measures, along with other efforts to create a “safety net” to protect European farmers from cheaper foreign competitors, didn’t satisfy all MEPs.
Julie Girling, agriculture spokeswoman for the British Conservative party, said the agreement was a throwback to the CAP’s historical market protections.
"British farming is among the most efficient in Europe but there is really nothing here to reward that,” she said in a statement. "Instead, old-fashioned market intervention is back in a big way, potentially taking us back to the bad old days of butter mountains and wine lakes."
Greening: Big ambitions put on hold
When Ciolo?, the agricultural commissioner, unveiled his 2014-2020 CAP proposal on 12 October 2011, he called for “a new partnership between European citizens and its farmers to meet the challenges of food security, sustainable use of natural resources and growth.”
What followed was a high-pressure lobbying campaign over what would become known as a “greener” policy, incorporating new conservation rules for both farmers and member states. These included:
- Maintaining permanent pasture;
- Diversifying cultivation, with farmers obliged to grow at least three crops on their arable land, two of which must represent at least 5% of the land each and the third not more than 70%.
- Maintaining an "ecological focus area" of at least 7% of farmland - excluding permanent grassland - through field margins, hedges, trees, fallow land, landscape features, biotopes, buffer strips and forest.
National governments charged with administering the CAP quickly expressed concerns that the policies would be more burdensome, while farm groups feared being locked into standardised environmental rules despite the diverse landscape of European agriculture. Environmental groups, meanwhile, hailed the effort and called in some cases for going beyond what the Commission proposed.
In the end, the environmental proposals proved some of the most controversial, leading to battles in Parliament between the more green-focused environmental committee and its agricultural counterpart.
Frustrated in advance of the vote in the European Parliament over the post-2013 farming policy, the agriculture committee’s chairman, Paolo De Castro, on 11 March 2013 publicly lashed out at environmental groups. He blamed their pressure campaigns for halting a time-saving legislative manoeuvre that would have allowed the committee to decide which of the hundreds of CAP amendments would go before the Parliament for a vote.
“I do not want our committee to be viewed as a committee that does not want the opportunity for a full debate in the plenary,” De Castro (Socialists & Democrats, Italy) said at the time, adding: “We’ve all received letters and e-mails from environmentalists, trade unions” and other pressure groups objecting to the special procedure.
In the end, environmental groups saw little to celebrate in a deal that includes broad exemptions from mandatory greening measures first proposed by the Commission.
Under the agreement, the EU’s 28 governments must make 30% of the direct payments contingent upon meeting certain environmental criteria, although member states have leeway to decide when to apply sanctions, a change from the Commission’s proposal that called for EU-wide performance standards.
In a step away from what the Commission first proposed, the CAP also:
- Exempts farms of under 15 hectares from new requirements to create “ecological focus areas,” or EFAs, land that is to be set aside to promote biodiversity and help absorb farm runoff. Initially, the requirement will apply to 5% of farmland in 2015 with a possible increase to 7% pending a review in 2017, re-writing the Commission’s original proposal to require a minimum 7%. Opponents say the new rules would exempt more than one-third of all farmland and 89% of farmers from the rules.
- Exempts farms of less than 10 hectares - or one-third of EU farms - from new crop diversification rules that are aimed at improving soil quality. Farmers with 10 to 30 hectares would have to plant two crops, while those over 30 hectares would be required to plant three. Up to 75% of land can be planted with a “main crop”.
- Exempts farmers from some EU environmental and water pollution laws, defeating efforts by the Commission and some MEPs to bring agriculture in line with other industries. Agricultural runoff is a leading source of nitrate contamination of fresh water supplies, environmentalists say.
“This is a major blow to those who championed a more sustainable, forward-thinking policy – one which would deliver for people and the environment as well as protecting the long-term interests of farming,” said Trees Robijns, agricultural policy officer at BirdLife Europe.
Tony Long, who heads the Europe office the WWF conservation NGO, said both the ministers and Parliament had failed to shepherd a greener deal through the negotiations.
“Agriculture ministers have a lot to be responsible for. At every turn they have sought to water down the environmental credentials of the final Common Agricultural Policy deal and have stonewalled any of the limited drives by the European Commission and Parliament to make improvements.
“The European Parliament has proven that it is not ready to handle its new full co-decision powers on the Common Agricultural Policy. At every turn the Agriculture Committee has tried to water down this reform. It even managed to throw out the few improvements the Parliament plenary had requested of them.”
The new CAP: Clinching a deal
Despite the criticism over greening, there was praise for the European Parliament’s inaugural role in the bargaining – a departure from the days when decisions were made by a handful of national leaders.
MEPs have exercised that authority, re-writing parts of the European Commission’s original farming proposal and working through 40 rounds of negotiations with national ministers and the Commission in the three months after lawmakers approved, on 13 March 2013, four packages of legislation that make up the new CAP.
“The inclusion of the European Parliament is good for food democracy,” said Samuel Féret, a French environmental campaigner who has been monitoring CAP negotiations since 1996. “It’s not perfect, but it is better than in the past.”
Coveney, the Irish agricultural minister, acknowledged the “interinstitutional frictions” in reaching an accord on the 2014-2020 policy before his country’s EU presidency ended on 30 June.
“I think we have found a balance that everyone can agree with,” said Coveney, a former MEP who noted that it was the first time the Parliament had more than a rubber-stamp role in crafting agriculture policy.
“This has been new for everybody. But we do have a responsibility to deliver what in my opinion is the most important sector in Europe, that being the agri and food industry.”