Stakes high for farmers as EU risks CAP delay

EU Agricultural Commissioner Dacian Ciolo? [L]

Farmers could miss out on huge EU payments if ministers and parliamentarians fail to complete the last set of negotiations for Europe’s new agriculture policy today (24 September).

Ministers and a delegation from the European Parliament will attempt to smooth out legal issues during the last round of negotiations over the EU's reform of the Common Agricultural Policy (CAP).

While most of the CAP reform, including the shape of direct payments, was agreed during a June European Council, a number of outstanding issues remain such as the reduction of grants, flexibility of the rural development pillar and levels of co-funding.

The issues relate mostly to the CAP’s structure in the multi-annual financial framework, the EU’s long-term budget.

‘Very high losses’

European Agriculture Commissioner Dacian Ciolo? said yesterday that the negotiating team could not “responsibly allow” talks to break down at this stage in the process.

“We need to reach an agreement on the last items of the package that were not agreed in June. The losses for farmers are potentially very high if we are not able to reach an agreement,” Ciolo? said.

A breakdown in the talks would postpone a decision on the CAP reform indefinitely and further delay EU countries’ implementation of the new measures, which reform the quota system and push farmers towards greener practices.

Ciolo? said: “there would be a general hold out from the member states on the implementation of the CAP, with all the advantages that we think we’ve negotiated.”

A delay would also threaten payments to farmers, especially under the heading of rural development.

“So if we don’t have a legal package on the reform, it means that we won’t be able to adopt the legislative proposal for the transition period because if we don’t have the legislative package we don’t know what we’re transitioning towards. So if we don’t have the proposals on transition certain CAP payments will not be disbursed because there will be no legal base to justify that,” Ciolo? told reporters at the European Council.

The commissioner added: “in practical terms it becomes legally impossible to make certain categories of payment, for example in particular are under the heading of rural development, by the simple absence of transitional arrangements.”

Vigilijus Jukna, agriculture minister of Lithuania, which is tasked with overseeing the CAP negotiations during its tenure in the European Council’s rotating presidency, remained upbeat about an agreement despite the difficulty in reaching an agreement over the flexibility of payments. The CAP is the EU's most expensive programme, accounting for more than 40% of its yearly budget.

“Negotiations are not going to be easy. The optimism is still there but we should focus on results that are already reached than planned results. So we are still optimistic and we look forward to a good compromise,” he said.

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).

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