The future of the Common Agricultural Policy (CAP) is a major source of tension between supporters like France and critics such as the UK and the Netherlands.
But a strong lobbying campaign led by Paris – the CAP's single biggest beneficiary – seems to have paid off.
Last week, the European Commission tabled proposals for the EU's 2014-2020 budget which largely leave current farm funding untouched.
"In the current context of economic and budgetary pressure, the European Commission is proposing to maintain CAP spending at 2013 levels," said EU Farm Commissioner Dacian Cioloş.
With member states jostling for different priorities in the EU's long-term spending, it appears that one of the key to the negotiation was the creation of an intermediate category in the regional budget – the second biggest beneficiary of EU spending.
Jean-Paul Denanot, president of the Limousin Regional Council, told EurActiv that according to his understanding, Germany agreed to keep the current CAP budget unchanged in exchange for the introduction of 'transition regions' in the bloc's cohesion policy.
The creation of this intermediate category allows support to continue for Germany's Eastern Länder, which would have otherwise ceased to fulfil the criteria for receiving EU money.
To be eligible for funding as an intermediate region, the GDP of beneficiaries should represent no more than 90% of the EU average - whereas the current 75% threshold would have easily been exceeded by the German Länder since poorer eastern countries joined the EU in 2004 and 2007.
Under the proposed new budget for 2014-2020, German regions will continue to receive financial aid equal to two thirds of the amount they receive currently. Overall, the Commission is proposing to increase the share of regional spending in the 2014-2020 budget from 35% currently to 36.7% (€376 billion).
Smaller share of budget for farmers
Regarding the EU's farm budget as such, things look broadly unchanged although adjustments will be introduced gradually.
While the Commission proposal maintains CAP spending at its 2013 level, overall, farm policy should have a slightly smaller share of the total EU budget.
The Commission proposes to allocate 36.2% (€371.72 billion) of the proposed EU budget to the CAP, compared with 39.4% in the current budget.
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. Over the years, these will gradually decrease – by €42.2 billion in 2014 and by €38 billion in 2020.
The rest of the CAP budget (€89.9 billion) is earmarked for rural development (Pillar 2) – a decrease from the current €96 billion. It is also proposed that annual Pillar 2 budget will fall in stages from €13.6 billion in 2014 to €12 billion in 2020.
30% of CAP payments linked to 'greening' measures
The publication of the Commission's long-term budget proposals last week also sheds some light on the EU's reformed farm policy after 2013.
The Commission proposes to make 30% of direct payments to farmers conditional on "greening" measures such as improving water efficiency and reducing pesticides use. Farmers will also be expected to deliver "public goods" such as biodiversity protection in order to receive their full payment.
"The compulsory greening of direct payments is a fundamental pillar of the reform," the Commission noted, adding that 30% direct payments for environmental measures went beyond mere "cross-compliance".
Environment Commissioner Janez Potočnik stressed that the 30% subsidy "needs to be justified by environmental measures".
More money for Eastern farmers, small holdings
The reformed CAP also includes a system of "convergence" to reduce income disparities between farmers in the "old" Western European countries and the newer ones from Central and Eastern Europe.
"All member states with direct payments below 90% of the EU-27 average will, over the period, close one third of the gap between their current level and 90% of the EU average direct payments," according to the EU executive.
The Commission also intends to cap direct income support for the largest agricultural holdings, which it said "receive a disproportionate share of direct income support from the CAP".
Outi Alapekkala
