CAP reform: Achieving more with less funding?

The future funding of agricultural and rural areas is the subject of heated debate. [shutterstock/Rena Schild]

This article is part of our special report CAP: New delivery model, climate and spending.

EU funding for agriculture is expected to become tighter after 2021. At the same time, the Common Agricultural Policy (CAP) has an increasing number of objectives. So, how can more be achieved with less funding? EURACTIV Germany reports.

Currently, the CAP accounts for more than a third of EU spending. During the 2014-2020 period, €400 billion will have been paid out in the form of direct support for farmers and rural development. However, through the financial crisis, Brexit and new costly tasks in fields such as defence and border management, the agriculture budget has come under pressure.

According to the European Commission’s proposal on the Multiannual Financial Framework (MFF), agricultural expenditure is supposed to fall by around 5% – in other words, €20 billion less for Europe’s farmers.

At the same time, there has been no decrease in objectives pursued by the EU with the CAP. These include income support, competitiveness, a more even distribution of power in the food chain, fighting climate change, supporting sustainability, biodiversity and the generational change on farms and creating jobs and higher levels of food quality.

But how is this supposed to work? The Commission is relying on greater flexibility. The member states are supposed to gain greater freedom when using the funds assigned to them so that they can draw up “tailor-made programmes.”

Preference should be given to small and medium-sized enterprises and young farmers. Moreover, the direct payments should be more strongly linked to sustainable and climate-friendly methods of production. Another approach is intended to make technological methods more accessible for agriculture.

Criticism of CAP reform plans

The European Court of Auditors (ECA) recently voiced clear criticism of the Commission’s reform approach.

The auditors said the proposals did not provide for sufficiently clear and measurable rules or monitoring mechanisms which could ensure that the regulations were being implemented. They therefore doubt whether the reform is suitable for making progress towards the EU’s self-imposed objectives.

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Moreover, neither are German interest groups satisfied with the Commission’s approach. For instance, the German working group for rural agriculture (AbL) criticised the fact that the proposal envisages cuts to Pillar 2 of the CAP, which is funding for rural areas.

“This weakens precisely the areas of actions of the EU agricultural policy which are, to a large extent, focused on specific objectives, such as environmental, nature and animal protection,” said the managing director of the AbL, Ulrich Jasper.

Joachim Rukwied, president of the German Farmers’ Association (DBV), was also worried about “painful cuts” for agriculture.

“The reduction in the agriculture budget will hit farmers hard and lead to rural areas being weakened – throughout Europe. These cuts will reduce the scope for additional services to society, such as climate and environmental protection,” Rukwied said.

Interest groups’ proposals

There are some proposals on the table as to how the reform could be improved. For instance, BÖLW, a federation for an ecological food industry, supports more strongly attaching conditions to the allocation of funding.

“There needs to be a clear commitment to rewarding farmers for major achievements in environmental, climate and animal protection. At least 70% of the planned payments of billions have to be used for this purpose. Only targeted investments in general interest services by agriculture will ensure that the funding is not passed on to landowners, but strengthens active farmers,” argued Peter Röhrig, the managing director at BÖLW.

However, the DBV rejects attaching such conditions and instead proposes prioritising future investments. “In particular, measures to support sustainable competitiveness should be funded from the agriculture budget, especially to promote investment, diversification, innovation, education and consultation,” a statement by the DBV said.

European Court of Auditors criticise plans to reform CAP

The EU auditors have expressed clear criticism of the plans to reform the CAP. They said that the Commission’s proposals did not meet the demand for a “more environmentally-friendly and more strongly preformance-based” approach. EURACTIV Germany reports.

Meanwhile, the Nature And Biodiversity Conservation Union (NABU) pointed out that the EU was committed to the United Nations’ Sustainable Development Goals (SDGs).

“This simply means that agriculture can no longer cause damage to biodiversity and the climate – and that businesses operating in a sustainable manner have to be given a future,” NABU stated.

The organisation consequently called for the current CAP to be replaced by a “new food and land use policy”. This would include, among other areas, establishing sustainable food production, rewarding concrete efforts at nature conservation and the greater involvement of the relevant actors.

Connection with future EU budget debate

There is obviously no lack of ideas about how the CAP could be made more effective. However, the various actors have very different priorities, meaning that there is still much to be clarified.

It remains to be seen precisely how the allocation of CAP funding will operate, who will be given priority, which conditions will be linked to the funding and how bureaucratic the processes will be.

A particular difficulty is in relation to the general budget debate. EU institutions, the European Parliament and member states are passionately debating how big the overall budget should be and where the priorities should lie.

It is uncertain if an agreement can be reached before the May 2019 European elections. Furthermore, it will be difficult to plan how exactly the funds should be used before the CAP’s future size has been clarified.

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