‘Damn tough’ deal on CAP leaves little room for celebration


EU negotiators sealed a deal yesterday (26 June) on future farm policy after months of haggling over how ambitious the policy would be on ending quotas, overhauling direct payments to farmers and making agriculture more environmentally responsible.


In the end, negotiators representing national agriculture ministers, the European Parliament, and the Commission ended up with a deal that now heads to the full Parliament and national governments for final approval.

Simon Coveney, the Irish agricultural minister who has overseen the trilateral talks over the past three months, acknowledged the “interinstitutional frictions” in reaching an accord on the 2014-2020 policy before his country’s EU presidency ends on Sunday.

“I think we have found a balance that everyone can agree with,” said Coveney, a former MEP who noted that it was the first time the Parliament had more than a rubber-stamp role in crafting agriculture policy.

“This has been new for everybody. But we do have a responsibility to deliver what in my opinion is the most important sector in Europe, that being the agri and food industry.”

“This was damn tough,” Irish MEP Mairead McGuinness (European People's Party) said at a meeting of the Parliament’s agriculture committee where the trilateral agreement was unveiled. Turning towards Agricultural Commissioner Dacian Ciolo?, she said: “But we worked through it and the Commissioner is smiling now but he wasn’t always smiling.”

Despite the deal, the CAP still awaits a final agreement on the EU’s €960 billion budget for 2014-2020. As it stands, the budget for agriculture and rural development will be around €380 billion, with some €280 billion set aside for direct payments to farmers and around €80 billion for rural development.

The negotiators also left several unresolved finance-related issues for an ultimate decision by the EU Council representing the member states. These include the desire of national governments to be able to swap money between the CAP’s Pillar 1 and Pillar 2 financing pots, the former paid directly to farmers and the latter providing co-financing for rural preservation and development projects.

Environmentalists and other critics say this flexibility would take money away from conservation work and allow national authorities to pay farmers twice for the same environmental projects.

Less money for big farms

The CAP compromise sets in place cuts for Europe’s biggest food growers by requiring that each farmer receives 60% of the average national direct payment by 2019. Currently, 20% of farmers receive 80% of the direct payments under the CAP’s Pillar 1.

Farmers with a few hectares of land could qualify for an additional payment of up to €1,250 per year, while national governments could use up to 2% of their CAP funds to encourage people under the age of 40 to become farmers.

“We have positively discriminated in favour of young farmers to give them mandatory top-ups, which is good for the future of farming in Europe,” Coveney told the Parliament's agricultural committee.

More controversially, the deal upends market liberalisation efforts backed by the Commission by extending sugar quotas and vine planting rights that were to have expired by 2016.

French MEP Michel Dantin (EPP), who led efforts in the Parliament’s agriculture committee to extend sugar quotas and planting rights grape production, welcomed the compromise package.

“We have now reinstated the capacity for organisation and management,” Dantin told news conference on Wednesday. “Farmers now have the certainty that they will not be abandoned by their public authorities.”

Green campaigners disappointed

Environmental groups, meanwhile, saw little to celebrate in a deal that includes broad exemptions from mandatory greening measures first proposed by the Commission’s CAP reform in October 2011.

“This is a major blow to those who championed a more sustainable, forward-thinking policy – one which would deliver for people and the environment as well as protecting the long-term interests of farming,” said Trees Robijns, agricultural policy officer at BirdLife Europe.

Tony Long, who heads the Europe office the WWF conservation NGO, said both the ministers and Parliament had failed to shepherd a greener deal through the negotiations.

“Agriculture ministers have a lot to be responsible for. At every turn they have sought to water down the environmental credentials of the final Common Agricultural Policy deal and have stonewalled any of the limited drives by the European Commission and Parliament to make improvements. 

“The European Parliament has proven that it is not ready to handle its new full co-decision powers on the Common Agricultural Policy. At every turn the Agriculture Committee has tried to water down this reform.  It even managed to throw out the few improvements the Parliament plenary had requested of them.”

On greening measures, the compromise package:

  • Exempts farms of under 15 hectares from new requirements to create “ecological focus areas,” or EFAs, land that is to be set aside to promote biodiversity and help absorb farm runoff. Initially, the requirement will apply to 5% of farmland in 2015, re-writing the Commission’s original proposal to require a minimum 7%. Environmentalists, who wanted a 10% minimum, said the new standards mean little since the new CAP would exempt more than one-third of all farmland and 89% of farmers from the rules.
  • Frees farms under 10 hectares – or one-third of EU farms – from new crop diversification rules that are aimed to improve soil quality. Farmers with 10 to 30 hectares would have to plant two crops, while those over 30 hectares would be required to plant three.
  • Exempts farmers from some EU environmental and water pollution laws, defeating efforts by the Commission and some MEPs to bring agriculture in line with other industries. Agricultural runoff is a leading source of nitrate contamination of fresh water supplies, environmentalists say.
  • Takes a step back from Commission proposals for EU-wide environmental mandates by giving member states flexibility to apply standards, options that environmental groups say will lead to uneven enforcement.

Under pressure

Negotiators held more than 40 sessions over three months to work out a deal. They were under pressure to hammer out an agreement before the end of the Irish presidency and before the European Parliament breaks for its summer recess.

Farm organisations were pressing for a quick deal to end what they said was the guesswork farmers were facing over future policies.

“We clearly do not want a deal at any price but we do not believe that prolonging the talks beyond June will achieve anything,” Copa-Cogeca, which represent European farmers and cooperatives, said in a letter sent to MEPs ahead of the final negotiations held this week in Luxembourg.

“Positions are known. All sides just have to compromise. If no agreement is reached now, it could be years before one is got, causing uncertainty for farmers and political instability. This is the last thing farmers or indeed Europe need.”

The European Starch Industry Association, AAF, said it was “relieved” that CAP negotiators agreed to end sugar and isoglucose quotas in 2017. Isoglucose is a sweetener derived from EU maize or wheat starch. Jamie Fortescue, AAF managing director, said: “This long-awaited decision to end quotas will unleash production, investments and growth in the European starch industry, a sector recognised for its innovative applications. This is also good for European farmers and for our customers”.

The European Sugar Users (CIUS) in the food and beverage industries, welcomed the compromise found between the EU institutions to end sugar quotas in 2017. “The end of sugar production quotas in 2017 will enable the supply chain to operate in a more market-oriented environment. This is an important step in achieving supply security, which is a prerequisite for economic growth. It will also allow the EU sugar sector to play an increasingly important role on the world market,” said Robert Guichard, president of CIUS whose members include the likes of Coca-Cola, Kraft Foods and the Kellogg company.

Faustine Defossez, agriculture campaigner for the European Environmental Bureau, an NGO, said the “negotiators have agreed to ask taxpayers to keep on spending hundreds of billions for the next seven years on a policy which will continue to damage our natural resources and threaten our long term food security.

“We are aware that some important details still have to be decided in the months to come, but at this stage no cosmetic change could hide this complete failure for people, farming and the environment.”

MEPs had differing views on the results.

"The political agreement we reached today is a victory both for EU farmers and consumers. This is the first time Parliament has been involved in the reform of EU farm policy as a full co-legislator and we proved that we are fully capable of doing the job. We managed to improve the proposals while defending Parliament's mandate," said Italian MEP Paolo De Castro (S&D), agriculture committee chair and head of Parliament's negotiating team.

British MEP Julie Girling, agriculture spokeswoman for the British Conservative party, said the agreement would hurt competitiveness.

"British farming is among the most efficient in Europe but there is really nothing here to reward that,” she said in a statement. "Instead, old-fashioned market intervention is back in a big way, potentially taking us back to the bad old days of butter mountains and wine lakes."

"The CAP of the future will be fundamentally different and the dependency culture of the past is now a thing of the past. We have managed to ensure better environmental protection and avoid double funding. The MFF-related issues are still open, as Council did not have a mandate to negotiate on them, but these will be finalised once the EU's new long-term budget is approved," said Portuguese MEP Luis Manuel Capoulas Santos (S&D), rapporteur for direct payments and rural development.

“This is an historic moment for young farmers,” said Joris Baecke, president of the European Council of Young Farmers. “The mandatory nature of the young farmer scheme in the direct payments dossier means that every single young farmer starting out in the EU agricultural sector will get additional support. This will prove crucial in addressing an age problem which is affecting every single one of the 27 – soon-to-be 28 – EU member states.”

Gerd Sonnleitner, president of the Copa famers organisation, said: “I am pleased to see that EU sugar production quotas will be extended slightly, but it is not for long enough. It will give producers a bit of time to adjust and ensure a stable sugar market as well as maintaining growth an employment in EU rural areas. The EU agri-food sector ensures 26 million jobs mostly in rural areas and it is a key driver for their economies, with knock-on effects in other sectors. This is crucial in the current economic climate.”

“But some elements of the deal run counter to the objectives of the CAP,” Sonnleitner said. “In particular,we oppose any transfers of funds from the first to the second pillar of the CAP. The first pillar of the CAP will be more important than ever if the EU is to ensure food security, stability and sustainability.”

Christian Pees, president of Cogeca, the farm cooperatives organisation, praised provisions in the CAP agreement to strengthen producers organisations. But he said that with farmers faced with support cuts of over 30% in some regions of the EU, “I seriously regret that the EU did not grasp the opportunity to strengthen farmers’ economic position so that they can meet future challenges. I am also disappointed that more was not done to ensure green growth: measures which benefit the environment at the same time as maintaining production capacity, resource efficiency and employment. Efficient measures to manage the market to reduce extreme volatility on agricultural markets are also needed. In addition, distortions of competition in the single market and the CAP must be avoided.”

The European federation of origin wines (EFOW) welcomed the deal.

Riccardo Ricci Curbastro, president of the organisation, said: "The agreement reached today on the future CAP is great news for the wine sector in Europe. It provides us with new development opportunities that will allow us to contribute even more to the economy of our regions and to the trade balance of the EU. We would like to sincerely thank all those involved in this difficult negotiation: members of the European Parliament who have supported us since the beginning of the discussion on planting rights, in particular Michel Dantin and Paolo De Castro, the ministers of the wine producing countries who have defended the regulation but also Commissioner [Dacian] Ciolo?, who was able to meet the wine sector’s demands by opening a constructive discussion which lead to this historic agreement. "

About 70% of CAP spending goes to direct payments for farmers, 20% of the budget is spent on rural development measures, and the remainder is handed out as export subsidies to food companies. France, Germany, Spain, Italy and Britain are the biggest beneficiaries.

In October 2011, the European Commission proposed overhauling the CAP, suggesting to shift a greater part of the funding to the EU's newer member states from Central Europe.

The Commission's CAP proposals also placed a greater emphasis on environmental measures, with up to 30% of the funding granted to farmers who diversify production, rotate their land or maintain permanent pastures. Twenty-one months after those proposals were unveiled, negotiators finally reached a deal on 26 June for the 2014-2020 CAP.

  • 2014-2020: Next phase of the CAP

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