Now policymakers have launched the discussion about the post-2020 CAP.
From February to May 2017, the Commission held a public consultation, whose results were presented on 7 July. The consultation involved respondents from across the EU such as farmers, employees in agri-food businesses and civil society.
According to the results of this public consultation, the main obstacles to the sector were a lack of land (29%), low profit margins (23%) and administrative requirements (13%).
As far as income is concerned, an overwhelming majority replied that farmers receive a very small percentage of the price paid by consumers for the purchase of a product. Respondents also said that their income was much lower compared to other professions and that EU farmers face stricter rules than the non-Europeans.
With regard to environmental challenges, respondents highlighted the protection of biodiversity, the reduction of soil degradation, better use of fertilisers and pesticides, while the majority of respondents replied that the current CAP is not addressing these challenges.
In addition, all stakeholders agreed that the CAP should do more in three areas: boosting investment growth and employment; reducing and adapting to climate change; and strengthening the EU single market.
Agriculture Commissioner Phil Hogan admitted that the new CAP was “more complicated than it needs to be,” and announced new simplification measures, including:
- Increased flexibility in mapping requirements for Ecological Focus Areas (EFAs);
- An extension of the deadline for aid applications; and
- More flexibility on eligibility conditions for voluntary coupled support.
“For everybody's benefit, we need to make things simpler,” Hogan said. “This is one of my main objectives over the next few years — reducing administrative burdens while making sure that all interests are defended."
Hogan has stressed that the focus of policy management for EU farming should shift from compliance to results, in order to reduce and improve the controls and administrative burdens on all parties, but in particular for farmers.
The main changes so far have been to secondary legislation in the areas of direct payments, the Integrated Administration and Control System (IACS) for the management and control of payments to farmers made by the member states from the CAP budget, and the implementation of rural development policy and the rules governing the regulation of specific market sectors.
“Where appropriate, greater subsidiarity for member states would allow sufficient flexibility to manage the policy in the most appropriate manner, while the EU continues to set the objectives and targets to be met,” the Commissioner emphasised.
“I proposed a new, fairer system of penalties for errors, as well as a ‘yellow card’ system for first-time mistakes. This should hopefully end the stress and anxiety that many hard working farm families feel when filling out detailed forms,” Hogan said, adding that the opportunity for preliminary checks of aid applications to be made by authorities before the application is formally closed will see errors reduced as farmers are proactively helped to ensure that their applications are accurate.
On top of these changes, an EU spokesperson told EURACTIV that the Commission had also introduced a raft of measures designed to improve the greening requirements and administration, eased the requirements for beneficiaries of rural development funding to publically display information about the funding, given greater flexibility to allow national rural development programmes to be amended to respond to natural disasters and simplified the rules governing support for the apiculture sector.
“The next round of CAP simplification will see 200 existing EU regulations reduced to 40 or 50, cutting red tape for farmers, operators, and national administrations alike,” the Commissioner underlined.
In an interview with EURACTIV, Hogan stressed the extent to which the CAP was an ever-changing landscape.
“It has evolved considerably over the last 20 years. Indeed, many of the elements of the 2013 Reform are phased over several years – such as the fairer distribution of CAP Direct Payments within and between member states, or the greening requirements aimed at halting monoculture and soil sealing, which are only starting to have an impact now,” he noted.
As the CAP continues to evolve, issues for future scrutiny in the EU executive’s simplification drive include wine labelling, traditional terms and protected designations of origin/protected geographical indications (PDOs/PGIs) and new rules on the communication of data concerning sugar production following the end of the quota system.
“The recent public consultation on the modernisation and simplification of the CAP has yielded many more proposals, which will be considered in the context of the Commission's Communication, which is due to be adopted by the end of the year,” an EU spokesperson said.
Making the CAP “greener”
“Green” policies play a key role in the new Common Agricultural Policy (CAP). While €44.2bn was spent under the Environment Axis in 2007-2013, approximately €112.5bn is earmarked for 2014-2020.
Green funds accounted for at least 25% of the Rural Development Pillar in 2007-2013, while they represent at least 30% of all direct payments in the 2014-2020 CAP.
Farmers receive EU funds for environmentally beneficial activities including crop diversification, maintaining permanent grasslands and looking after ecological focus areas (EFAs) such as hedges, fallow land and field margins.
However, the new CAP may not be as “green” as the European Commission claims. A study by the European Environmental Bureau (EEB) and BirdLife Europe found a €1bn decline in the actual funding for “green” measures meant to bring environmental benefits on farmland.
Specific requirements for EFAs and other greening measures are set by member state governments. But in its 2016 review of the greening policy, the Commission observed great variations across the EU.
The EEB study noted that over 80% of protected extensive grasslands in Natura 2000 sites were in an “unfavourable condition” but stressed that the original idea behind the reform of the post-2013 CAP was to ensure public money was being used to pay for public goods.
“This was translated into good agronomic practices linked with farmers’ direct payments and more ambitious measures for the environment in Rural Development,” the NGOs said. However, “this intention rapidly disappeared, leaving us with very weak basic regulations”, they claim.
The European Commission defended its “greening” policy, saying that for the first time, direct payments to farmers were linked to a prescribed list of environmental practices.
“Based on the notifications received so far, half of the EU’s farmers are now obliged to carry out environmental practices on 80% of their farmland,” an EU spokesperson told EURACTIV.
The official explained that it was now a legal requirement to spend at least 30% of the EU rural development budget on a number of environmental and climate measures.
“Looking across the 118 Rural Development programmes, we are actually spending almost half (49%) of the budget on these measures, so going beyond that legal requirement,” the spokesman said, adding that this includes around 16% earmarked for payments for Areas with Natural Constraints, which “help prevent land abandonment and thereby maintain biodiversity in the farmed landscapes.”
“Emissions stemming from agriculture have declined by 24% since 1990, while total output of agricultural production has been maintained thanks to land management using modern technologies, improved knowledge and specific practices to combat climate change,” the spokesperson said.
Agriculture is responsible for 10% the EU’s emissions of greenhouse gases, not including emissions from agricultural machinery and transport.
Another 2015 report by the European Court of Auditors (ECA) found “unreasonably high costs” related to EU-funded schemes to support environmentally-friendly agriculture in the UK, Italy, Denmark, and Portugal.
Only five of the 28 audited projects proved to be cost-effective, according to the report.
Asked by EURACTIV, the Commission’s agriculture spokesperson, Daniel Rosario, underlined that the weaknesses identified by EU auditors were mainly related to the management of projects at the national level.
The EU official also sought to put play down the scheme’s significance for the EU budget, saying the green farming projects “accounted for roughly 0.6% of the Common Agriculture Policy (CAP) budget for Rural Development” in the 2007-2013 period, or €614m.
Looking forward, Rosario said the EU executive had taken steps to offer better guidance to member states for the implementation of the 2014-2020 rural development programmes (RDPs).
However, he said that “a balance needs to be found” and warned of “the risk of excessive administrative burden” and “financial constraints” placed on the member states, who often balk at excessive red tape coming from Brussels.
Supporting young farmers
Another key objective of the EU’s rural development policy is to replace an ageing workforce on European farms. The overall number of EU farmers fell rapidly in the last decade, from 14.5 million in 2005 to 10.7 million in 2013. The number of young farmers also fell from 3.3 million to 2.3 million over the same period.
Farmers aged under 35 represented just 6% of all holding managers in 2013, according to a survey by Eurostat. 31.1% of farms were managed by people aged 65 or over, and a further 24.7% by managers aged 55 to 64.
This raises questions about the long-term viability of the sector. To try and address this, the Commission says the new CAP will provide nearly 180,000 young farmers with an installation grant.
“The recent CAP reform supported the Commission initiative to provide a 25% top-up to the direct payment amounts for young farmers under 40 for the first five years after they enter the sector,” Rosario told EURACTIV.
However, a report from the European Court of Auditors (ECA) published in June 2017, stressed that EU support for young farmers is too often poorly defined, with no results or impact specified.
Particularly, the auditors called for the support to be better targeted in order to foster effective generational renewal.
According to Janusz Wojciechowski, a member of the ECA and leading contributor to the report, “Effective support for young farmers is vital if farming is to be sustainable over the generations.”
“But we found little evidence about the outcome of these measures and whether they actually help young farmers, mainly because of insufficient targeting and low quality indicators,” he added.
For the direct payments pillar, the Court noted that the aid was not based on a sound needs assessment and did not reflect the general objective of encouraging generational renewal. Regarding the rural development pillar, the auditors stressed it is “generally based on a vague needs assessment”.
However its objectives do partially reflect the general objective of encouraging generational renewal.
Contacted by EURACTIV, a Commission spokesperson underlined that the executive was “strongly committed” to improving its performance framework.
“A sound assessment of the impact of the CAP in generational renewal should take into account the effect of several measures, not only the specific ones on setting up young farmers. […] This analysis will be done by the Commission in a specific evaluation on generational renewal which will be launched at the end of 2017,” the EU official said.
The Commission spokesperson added though that the Court audited a relatively small sample of the support provided and that young farmers benefit from other significant types of EU support, beyond the two specific measures that were audited.
The official also stated that some of the measures audited are managed by member states and the executive plays only an advisory role.
Eyeing new markets
Access to new markets is another area where the EU hopes to make a difference for struggling farmers.
However, this promise has so far failed to materialise. A Russian embargo on Western food products, combined with the lifting of EU milk quotas in March 2015, falling Chinese demand and changing dietary habits, has led to a drop in prices for beef, pork, and milk. The fruit and vegetable sector has also been severely hit.
The Commission had to take emergency action, unlocking €500 million in aid to farmers, as angry protesters took to the streets of Brussels.
So-called safety net measures for the fruit and vegetables sector were first introduced in 2014 in response to the Russian ban on EU imports and were extended for the third time on 1 July 2017, until the end of June 2018.
The extended scheme is worth up to €70 million to EU fruit producers that might otherwise not find a market for their products, the Commission said. And it will compensate farmers who give their produce to charity or use it for other purposes such as animal feed or compost.
“The global economic situation and worldwide economic growth is not the best, particularly the situation in China. 3% less economic growth in China means 1% less worldwide,” said Peter Pascher from the German Farmers’ Association. Pascher told EURACTIV it was time to reconsider EU sanctions against Moscow and find a solution to the conflict.
Japan overtook Russia as the EU’s fourth-largest export market for agricultural products in 2016. EU agri-food exports to the far-eastern country reached €5.84bn for the period February 2016 to January 2017, up 9.1% on the previous year. Exports to Russia also grew from February 2016 to January 2017, but at a much slower rate of 3.6%, reaching a value of €5.74bn.
In a speech delivered at the “CAP: have your say” conference on 7 July 2017, Commissioner Hogan stressed that the EU’s newly-signed free trade agreement with Japan would “eliminate altogether” trade tariffs on European wine, other alcoholic beverages, hard cheeses and processed pork, and slash the tariff rate for beef from 38.5% to 9%.
“The outcome means that 85 percent of EU agri-food products exported to Japan will be liberalised over time,” he said.
The Commission has described international trade as the "third pillar" of the CAP.
The EU executive believes that European agriculture should be market-orientated and competitive on the global stage. This is reflected in the CAP’s Rural Development pillar, which aims at supporting 360,000 farm modernisation projects and improving access to new markets for EU produce.
But Brussels has been heavily criticised for its negotiating stance with foreign countries.
In an interview with EURACTIV, Greek Minister of Agricultural Development Evangelos Apostolou said Europe should defend the interests of producers who face low-cost competition from third countries. “It is also important to develop a European export credit tool to encourage exports along with the use of financial instruments for granting soft loans,” he added.
The Commission retorted that it always carries out a careful impact assessment before sealing any new trade agreement.
“Bilateral trade agreements provide considerable opportunities for the EU agri-food sector as a whole,” Hogan told EURACTIV, adding that the EU’s increased global trade in agricultural products has helped the EU agri-food sector expand, thereby providing additional growth and jobs.
“In global terms, EU agricultural exports have performed much better than most other sectors in recent years and the EU has become a net exporter, especially for added-value products. This would indicate that commercial deals have not harmed European agriculture. Indeed, as people in Asia and Africa have more disposable income, we see they want to consume European food and drink, and our trade agreements open up these growing markets.”
But Pekka Pesonen, the secretary-general of Copa-Cogeca, the association of European farmers and agri-cooperatives, told EURACTIV in an interview that the Commission’s efforts to open niche markets to compensate for losses in trade with Russia have not translated into increased income for farmers, despite a growth in exports.
“We have to trade, we have to export and to continue exporting, but those larger export markets came at a price,” Pesonen said.
“In order to open these markets, we had to cut prices, and the pinch has of course been felt most acutely by farmers. That is why agricultural income fell in 2016 compared to 2015, which was already a difficult year,” the Copa-Cogeca secretary-general added.
The European Committee of the Regions recently adopted its recommendations regarding the future CAP, in which it focused on agricultural income.
“The overall aim is to maintain high-quality, sustainable and fairly-priced agriculture that provides adequately-paid jobs in all regions of the European Union, in line with the objective of territorial cohesion. The aim is also to align the CAP more closely with citizen's expectations and to give more legitimacy to its budget,” the CoR said, adding that the EU should exercise its weight internationally to change the existing rules on international agri-trade and ensure a level playing field in trade agreements with third countries.
New plant breeding techniques
New plant breeding techniques (NBTs) are seen as a promising new field for the agri-food sector and “are even necessary to meet the challenges of global changes such as population growth and climate change”, according to a report by the European Commission’s Joint Research Centre (JRC), the EU executive’s in-house scientific body meant to inform policymaking.
NBTs basically focus on developing new seed traits within a given species through genetic engineering. The question about these techniques is whether they should be considered as GMOs under European law.
Backers of the technology say NBTs should not be considered as GMOs because no foreign DNA is present in the resulting plants, which might have developed naturally. To opponents, they are just another attempt at selling GMOs to Europeans through the back door.
The European Commission has delayed a much-awaited legal analysis of whether new plant breeding techniques should be considered GMOs or not. The analysis was supposed to have been completed by the first quarter of 2016.
Following a request from Vytenis Andriukaitis, the European Commissioner for Health and Food Safety, the Scientific Advice Mechanism (SAM) published an explanatory note on new techniques in agricultural biotechnology on 28 April.
One of the main conclusions of the report is that these new techniques differ significantly from each other; thus, grouping them together would “not be optimal from a scientific and technical point of view”.
“This precision and control over changes made are greater than with the use of conventional breeding or established techniques of genetic modification. As a consequence, these new techniques result in fewer unintended effects,” the scientists emphasised.
Regarding the health and environmental assessment of the organisms resulting from these techniques, the report emphasised that a case-by-case approach should be adopted, taking into consideration a number of factors such as the environment in which the end product is used and the agricultural practice applied.
Contacted by EURACTIV, Commission sources stressed that the explanatory note did not take a position on legal matters or make policy recommendations.
However, the same sources noted, “Generally speaking, the Commission considers that a broad EU reflection on new breeding techniques and innovation in the seeds sector and beyond is needed.”
EU lawmakers have already started thinking about the future of EU farming after 2020.
Rising pressure to increase yields, combined with the need to protect the environment, has led farmers to explore “innovative” practices in order to produce more with lower inputs.
Smart or precision farming takes centre stage in the discussion, but the exact regime under which it will be included in the post-2020 CAP still divides stakeholders.
The main concept of precision farming is optimisation, meaning the precise application of inputs, such as fertilisers, pesticides and irrigation water, which brings positive environmental impacts.
The quality of products is improved as a result and energy consumption reduced significantly.
Whether producing more with less input could have a positive impact on food prices is not clear yet. However, Commission sources claim that precision farming could “potentially” drive food prices down.
They also believe that technology could enhance “transparent farming” and, as a result, better inform European consumers about the food they eat.
But the European farming sector is still faced with a number of challenges before it can enter the digital era. These range from the cost of technological equipment and the lack of broadband infrastructure in rural areas to the need for an inter-generational “e-transition” and, last but not least, the collection and management of big data.
Of the 300 million EU citizens living in rural areas, only 25% are covered by fast or ultra-fast broadband, compared to around 70% coverage in urban areas. The EU objective is to ensure that every company and household has broadband access at a speed of at least 30MB/s by 2020.
Italian Partito Democratico MEP Paolo de Castro (S&D group) told EURACTIV that the CAP legal framework should be simpler and more flexible, ensuring timely and effective decision-making.
“Aggressive investments in the further development of smart agricultural technologies and their widespread adoption in an integrated way that encompasses climate, energy, agricultural and digital policies would also be required,” he pointed out.
On the other hand, some environmental NGOs, as well as leftist EU lawmakers, claim that precision farming will further deteriorate an already difficult situation.
Lidia Senra, a Spanish Alternativa Galega (GUE/NGL group) lawmaker and coordinator in the AGRI Committee, recently told EURACTIV.com that innovation and technology could indeed bring added value to the fight against climate change and efforts to support the right to food and employment.
“However, they are being used to encourage further concentration of wealth and to make the vast majority of society more precarious and poorer,” she said, adding that smart agriculture used this same logic.
A big issue with which the decision-makers will also have to deal carefully is the use of data. Commission Hogan recently told EURACTIV in an interview, “It is all a matter of how we organise data ownership and access so that the position of farmers is improved and not weakened by the new technology.”
Another key element of precision farming is that, according to the Commission, it will potentially motivate and attract young people to return to farms and contribute to a wider rural transformation, with their enhanced e-skills.