London and Warsaw have put themselves firmly on a collision course with France over the upcoming reform of the EU's farm policy, calling for a "modernisation of European agriculture" which they claim currently "protects outdated practices of the past."
The Common Agricultural Policy (CAP), which currently absorbs about 40% of the EU's €130 billion annual budget, should be radically overhauled to focus on competitiveness and protecting the environment, the two countries said in a statement.
The joint call by UK and Polish agriculture ministers Jim Paice and Marek Sawicki came during a meeting of farm ministers in Brussels Tuesday (20 September) and ahead of European Commission proposals to reform the CAP, due on 12 October.
The reform, they said, should prepare European agriculture for the "challenges and opportunities of 2050 and beyond […] rather than protecting practices whose time is past," calling for a reduction in direct income support to farmers.
Their joint calls run directly in opposition to France, which has asked to maintain direct subsidies broadly unchanged. Farmers need financial support to deal with sudden price swings on the market and keep an agricultural production base in Europe, the French argue.
Shifting the emphasis from Pillar 1 to Pillar 2
But Poland and the UK want a more fundamental policy shift, which places the emphasis on market liberalisation and green measures. "We will push for ambitious reform of the CAP that will enable the sector to respond to and earn improved returns from the global market," the two ministers write.
"We are seeking reform and simplification of the CAP that ensures that EU farm businesses can be viable and – once again – leaders in world markets."
More specifically, London and Warsaw are calling for downsizing the so-called "Pillar 1" of the CAP, which provides an income safety-net for farmers, and shift it to "Pillar 2" which deals with environmental protection measures.
"The UK wants farm production subsidies to be reduced in the new CAP to create a more competitive farming industry that is not reliant on any direct subsidies," said a statement from the British permanent representation to the EU in Brussels.
Rather than direct income support, farmers need incentives to modernise and receive rewards for being good environment shepherds, the two ministers write.
"We believe the positive environmental dimension of modernisation, enabling changes towards agricultural production technologies which are more environmentally friendly, should be emphasised." These include the provision of "environmental public goods" such as biodiversity protection and healthier soil or water.
Closing the East-West income gap
Rallying behind a long-standing demand from Warsaw, the two ministers call for "a convergence of direct payment rates" which have so far been allocated according to historic production levels, benefiting farmers in France, Germany and Britain to a large extent.
The move, already outlined by the Commission in November last year, would gradually reduce income disparities between farmers in the "old" Western European countries and the newer ones such as Poland.
Payments between old and new member states currently vary from over €500 per hectare in Greece to less than €100 in Latvia and the Commission has proposed closing part of this gap in gradual stages by 2020.
France, for its part, accepts that Eastern member states should gradually receive more money, meaning its own share of the pie will eventually get smaller. However, French diplomats in Brussels derided the UK-Polish statement saying the two countries in fact are "in disagreement".
"Behind the joint statement, there are in reality two rather divergent visions of agriculture," said the diplomat, explaining that Poland has long sought to increase direct payments to its farmers and would lose out from a reduction of funding under the first pillar.
"This is like a marriage of carp and rabbit," the diplomat chuckled, saying "CAP specialists will not be fooled."
At around €53 billion a year, the Common Agricultural Policy (CAP) currently represents some 40% of the EU's long-term budget for 2007-2013
In its proposal for the 2014-2020 budget period, tabled in June 2011, the European Commission proposed freezing farm spending at its 2013 level.
Of the €371.72 billion allocated to the CAP, €281.8 billion is earmarked for direct payments and market measures in support of farmers (Pillar 1) – down from €289 billion in the current budget. The rest of the CAP budget (€89.9 billion) is earmarked for rural development (Pillar 2) – a decrease from the current €96 billion.
- 12 Oct. 2011: European Commission to unveil legislative proposal on CAP reform.
- By end 2013: Target date for completing the CAP reform.