Farming deal ‘too flexible’ but caps largest direct payments

Intensive farming.JPG

The EU’s freshly agreed agriculture policy reform caps direct payments to the largest farms, but a senior parliamentarian says that flexibility in its enforcement potentially weakens social and green commitments.

Ministers and a negotiating team from the European Parliament finalised a deal on the EU’s Common Agricultural Policy (CAP) for 2014 to 2020 on Tuesday evening (24 September).

The agreement, which now passes on to the entire Parliament for vote, caps the amount farmers can receive in direct payments of over 150,000. In practice, this reduces the amount the largest farms will receive by at least 5%, the Commission says.

“Member States may choose to cap payments fully at this amount. This is up to the countries themselves to decide”, said Mairead McGuinness, the Irish MEP dealing with direct payments for the European People’s Party group in the Parliament.

The CAP has often been slated for the size of payments it allocates to a small number of very large farms, particularly in Britain and in grain-producing northern France.

The cap on payments above 150,000 does not count for greening activities.

‘Changed at will’

José Bové, a French farmer and vice-president of the European Parliament’s agriculture committee, targeted the “flexibility” of enforcement the EU negotiating team injected into the deal.

The green MEP slated the agreement for taking the “common” out of CAP.

“The agreement reached confirms the end of the CAP. Not much that is common is left in this inventory of measures that can be adapted at will by each of the member states,” he said, referring to the lack of a common procedure governing the distribution of direct payments.

“Under the guise of subsidiarity, countries are going to throw themselves into productionist policies that are destructive for employment and the environment,” Bové said, adding that he would vote against the reform.

The political agreement that ministers and an EU negotiating team reached in June was hailed as a greener CAP that the previous one.

The new measures included targeting 30% of direct payments to green farming activities, such as maintaining permanent grassland, crop diversification and setting aside land for ecological purposes.

“This is a dramatic change,” the Commission’s head of unit for agriculture, Pierre Bascou, said at a conference in the Parliament on Tuesday.

The negotiating team has also attempted to safeguard rural employment by including the possibility to deduct salary costs from the direct payment calculations.

Parliamentarians had attempted to reduce one of the main outstanding points in the CAP negotiations, the transference of funds between the scheme’s two “pillars”, agriculture and rural development.

EU countries will be able to transfer up to 15% of their national envelope of direct payments (for farming) to their rural development budget. EU countries which receive less than 90% of the average of direct payments can shift up to 25%. MEPs had sought to reduce this “flexibility”, EURACTIV understands.

A spokesperson for Bové told EURACTIV in an email: “The flexibility of the envelopes between the 1st and the 2nd pillar is also an ‘a la carte’ system which weakens the financial capacity of the member states, in particular the new entrants, which will need to keep these financial means in the 2nd pillar but which will suffer pressure from those who would lower the level of their support from the 1st pillar as a windfall in the 2nd pillar.”

Instead, the Parliament demanded an increase in the rate of EU-funded support for rural development in less-developed regions, the outermost periphery of the Union and the smaller Islands in the Aegean. The level of co-funding stands at 85% for these regions.

Parliamentarians may make last-minute amendments to the text ahead of the vote but wholesale changes risk the need to open up the legislative process again, putting the transitional phase and final implementation of the CAP in jeopardy, the European Commission and Parliament negotiators say.

Therefore, the text is expected to remain mostly unchanged as it heads to vote. The Parliament’s negotiators expect a large majority in favour but opposition may come from the Greens and European Conservatives and Reformists.

Most main stakeholders greeted the CAP agreement, which the Commission says will give farmers certainty until it is implemented in 2014.

But British MEP Jim Nicholson, agriculture spokesperson for the European Conservatives and Reformists group, made a similar point to Bové: "As this agreement stands, the Common Agricultural Policy is common in name only to EU Member States. Farmers from different countries will compete in the same marketplace but with widely varying levels of support from the EU.”

"The agreement fails to address the disparity which exists between Member States and does not right the inequities and payment disadvantages suffered by the new Member States.”  

"We are very proud to have managed such a complex reform in such a short time, said agriculture committee chair and negotiating team leader Paolo De Castro (Socialists and Democrats, Italy).

"It was a huge dossier and the European Parliament was for the first time involved as co-legislator on the CAP reform under the co-decision procedure. We proved that Parliament could make the reform better and more democratic, whilst working swiftly enough to ensure that farmers will benefit on time from the new CAP", he added.

"The CAP is reformed to face the challenges of the present and the future. Thanks to the European Parliament's co-decision powers, this is the fairest reform of the agricultural policy in Europe to serve not only farmers but also citizens and taxpayers", said rapporteur on Rural Development and Direct Payments Luis Manuel Capoulas Santos (Socialists and Democrats, Portugal).

"Having found agreement on most of the CAP reform package in June, I am delighted that we have now been able to finalise the reform as a whole," EU Agriculture Commissioner Dacian Ciolo? said on Tuesday. "This is important for European farmers as it provides them greater certainty for the coming year."

Albert Jan Maat, the president of Copa, part of the the European farmers association Copa-Cogeca, said: “We have been pressing hard for a final agreement to be reached after a political deal was made last Summer. The overall reform package is a significant improvement on what was originally proposed, being more realistic and with more practical solutions for farmers on several points."

The European Council of Young Farmers (Cleja) said: "Agreement on all the outstanding CAP issues, left unopened and in square brackets due to their inclusion in the Multi-Annual Financial Framework (MFF) dossier agreed upon by heads of state, has now been found. The spirit of compromise shown by both institutions has been key to finalising the text of the CAP dossiers, and ensuring that the bulk of the agreement found last June, including the strong measures for young farmers, was not put at any risk."

Italian MEP Giovanni La Via, European Peoples' Party rapporteur on the financing, management and monitoring the CAP report, said: “Even if is not what we had aimed to achieve at the beginning, we are pleased with the result because we were able to modify the Commission’s proposal, which was not agreeable to us.”

"Our main aim was administrative simplification at all levels - from the farmers' penalties system that now provides an alert warning, to the concrete application of the greening measures, the impact of which will be decreased thanks to a reduction of the sanctions provided in case of their violation.”

The Common Agricultural Policy (CAP) is a system of EU agricultural subsidies and programmes, which according to the European Commission costs each EU citizen around 30 euro cents a day.

At around €53 billion a year, the CAP currently represents some 40% of the EU's long-term budget for 2007-2013, compared to nearly 71% in 1984. The figure is expected to fall to some 36% with the post 2013-reform.

The majority (over 70%) of CAP spending goes to direct payments for farmers, while some 20% of the CAP budget is spent on rural development measures. The rest is handed out as export subsidies to food companies.

The Commission's CAP proposals also place 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.

The new policy directions are now being debated between the European Parliament and the EU's 28 member states in view of an expected approval by end 2013. Challenges for agriculture in Europe include the need to double world food production by 2050 to cater for population growth and wealthier consumers eating more meat – in the face of climate change impacts (loss of biodiversity, deteriorating soil and water quality).

Subscribe to our newsletters