Finland’s presidency has proposed a seven-year EU budget that leaves allocations for direct payments and market measures as they were set up in the Commission’s Common Agricultural Policy proposal, except with the addition of €10 billion of fresh money in the rural development funds.
In the Finnish long-term budget proposal, the money allocated under the heading ‘natural resources and environment’ amounts to €346.8 billion, including both Common Agricultural Policy (CAP) and its twin fund for fisheries, the European Maritime and Fisheries Fund (EMFF).
The CAP envelope is made up of three main sources: the direct payments to farmers and the market-related expenditures, which together form the so-called first pillar, plus the rural development support which is considered as the CAP’s second pillar.
In a draft text of the negotiating box obtained by EURACTIV, the budget allocation for the first pillar is €254.2 billion in constant 2018 prices, the same amount earmarked in the CAP proposal presented by the Commission in June 2018.
The allocation for the European Agricultural Fund for Rural Development (EAFRD) is set at €80.04 billion in the Finnish proposal, with an exact increase of €10 billion compared to Commission’s proposal.
This increase is expected to compensate for the huge loss of funds the second pillar faced in the Commission’s proposal, where rural development aid fell by 28% compared to the 2014-2020 CAP budget, whereas the first pillar only decreased by 11%.
The proposed increase of second pillar spending also means a rise in CAP’s share of the total Multiannual Financial Framework (MFF), which went from 28.5% of the Commission’s proposal to the 30.7% proposed by the Finns.
EU leaders will discuss the Finnish negotiating box in the European summit on 12-13 December.
The other new features proposed by the Finnish presidency concern compulsory capping of payments and external convergence.
Introduced by the 2013 CAP reform, the concept of external convergence aims to reduce differences in the average support per hectare after Eastern enlargement. This process is designed to gradually allow equal direct payments for all the member states.
The Finnish negotiating box has proposed to cap direct payments for large beneficiaries are capped at €100,000 per farm, a very similar figure to the one suggested in the original Commission proposal.
However, in addition to this compulsory cap, the Commission also wanted to reduce the share of direct payments received above €60,000.
Regarding external convergence, Finland’s presidency introduced a new criterion under the pressure of Eastern countries, binding the member states to guarantee a minimum level of aid per hectare of direct payments by 2027.
The amount of money for the aid per hectare is still undefined and will probably be a matter of heated debate in negotiations, but the inclusion of this is good news for Eastern countries.
During his hearing before the European Parliament, new Agriculture Commissioner Janusz Wojciechowski said that external convergence is on the table.
“We are on the way to harmonise everything but we need more ambition in politics and also radical decisions,” he said.
He also pointed out that, 15 years after the enlargement, the division between the old and a new Europe should no longer exist.
“A fair solution has to be found,” he concluded.
The president of the European Parliament’s Agriculture Committee (AGRI) Norbert Lins criticised the circulation of the negotiating box, saying that Council cannot decide alone on the EU farm policy reform.
“It is deeply worrying and utterly unacceptable that the Council tries to usurp the right to decide on its own on such core elements of the EU agricultural policy as capping of direct payments or transfers between the pillars,” he said.
Speaking at an event in the European Parliament, experienced socialist MEP Paolo De Castro said that MFF negotiating box drafted by the Finnish presidency is less ambitious on the overall ceiling compared to Commission’s proposal.
“It makes us think how difficult the negotiations will be,” he said.
Dacian Ciolos, former Agriculture Commissioner and now president of the liberal group in the European Parliament, said that direct payments have dominated the CAP debate in the past.
“But we should get out this defensive mindset,” he warned, adding that it is important that lawmakers’ efforts should not be directed not to reproduce solutions from the past but to pursue EU’s future goals.
He also said that the first thing to do is to listen to the rural, rather than the urban, world.
“We define our European way of life in terms of how smart the cities we live in are, but we often forget that rural areas are essential,” he said.
[Edited by Natasha Foote]