Fit for purpose, fair and sustainable: A new agricultural policy is possible

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40% of the EU's budget goes towards the CAP. [Shutterstock]

A new study by German environmental NGO NABU (BirdLife Germany) shows how current funding could be used more economically and ecologically. But this drastic change requires political will, warns Konstantin Kreiser.

Konstantin Kreiser is head of EU nature protection policy at NABU.

Sixty billion euros. That’s roughly how much of the EU’s annual budget is allocated to the Common Agricultural Policy (CAP). Almost 40% of the bloc’s coffers are spent on it.

In comparison, Erasmus + is run on €2 billion, LIFE (the EU’s only dedicated environmental funding instrument) has to make do with less than half a billion and HORIZON 2020 gets 7% of the EU budget, some €11 billion.

Agriculture’s special status dates back to the early days of the Union, when the priority was ensuring people were fed in post-war Europe. Beyond that, the justification for more and more subsidies have continued to be made.

As a result, farming income, consumer needs and the environment have been put in focus, either alternately or simultaneously. But after decades of work and rounds of reforms, it seems that none of these challenges have been satisfactorily resolved. Dissatisfaction reigns supreme with the CAP.

Many farming enterprises are in dire straits and much of food production is anything but sustainable. In these times of Brexit and euro crisis, finance ministers are rapidly losing patience with the CAP.

The latest data relating to agriculture’s role in species decline, groundwater pollution and climate change have added fuel to the argument that the sector should no longer be subsidised.

In times where austerity and pinching pennies is the name of the game the fact that 40% of the EU’s budget is being spent inefficiently, as well as burdening taxpayers of the future with huge costs is the opposite of responsible financial policy.

Sustainably operating farms deserve support from society, as they fulfil a number of important tasks. Without nature friendly land use, many species and habitats of EU importance are bound to disappear. But many farming enterprises that are important to conservation sites are facing significant economic hardship or have already quit because of it.

The willingness of farmers to implement conservation measures or to switch to organic farming is there, especially when food prices are so low, but the CAP does not provide the necessary tools to support this.

Instead, a large proportion of funding is earmarked for flat-rate area payments, often benefitting industrial companies that operate in favourable locations, better suited to the global market and not in real need of public support.

What’s at stake here is people’s acceptance of agriculture being funded and supported. A public image is developing of a sector controlled by powerful lobby groups, which have successfully defended its entitlement to funding at every round of reforms.

The European Commission’s attempt during the last reform to link subsidies to the environment was particularly evident. The proposed “greening” of flat-rate area payments was watered down in the negotiations between agriculture ministers and the European Parliament. As a result the CAP’s environmental balance is expected to be at least as problematic as before.

NABU has now released a report, using detailed figures, which shows that another form of agricultural policy is possible. The authors have come up with a model that replaces the current inefficient “sprinkler approach” with a sustainability premium and a set of attractive other targeted payments for the delivery of public goods.

Farmers can get the sustainability payment if they comply with certain criteria, such as a minimum amount of area that is ecologically high in value or respecting an upper limit on livestock numbers per area. On top, financially attractive incentives would be on offer e.g. to reward highly effective environmental measures such as conserving species rich grassland or grain fields.

Member states and their regions could also use EU money to develop and promote specific programmes adapted to the protection of most endangered species and habitats. Farmers who follow specific advisory schemes can get additional payments.

The study expects that under this new model, assuming the same CAP budget, three-quarters of German agricultural land would be managed under the sustainability payment conditions. At the same time farmers who participate in a certain amount of environmental payments would see their incomes increase compared to today.

This would also create important positive perspectives for businesses that are located in less profitable locations. Companies that only wish to comply with the minimum standards of environmental law are free to do so, but they will no longer be subsidised by the taxpayer.

Ultimately, this reform would link agricultural subsidies to the provision of public goods and services; the agricultural policy became more fair towards farmers and taxpayers.

In September, the German government, along with most other member states, agreed against running a Fitness Check of the CAP. Economic, environmental and social groups, as well as trade unions and other interest groups, however, all agreed that it should be carried out.

NABU’s new study shows that anyone who is serious about sustainable agriculture and the interests of current and future taxpayers has nothing to fear from real reform. However, anyone blocking a systematic evaluation of the efficiency and added-value of the current system is sending a fatal signal to EU citizens, at a time when faith in the EU is not exactly in rude health.