As Brussels returns from its summer break there is one piece of unfinished business before the Common Agricultural Policy (CAP) political saga for 2014-2020 can be put to rest. Negotiators from the European Parliament and the Council will lock horns in trilogue on two different ways to use the funds, one of which is more green than the other, writes Tony Long.
Tony Long is the director of the European Policy Office of the WWF, the global conservation organisation.
The negotiators will choose whether to allow the funds to pass through the direct payments system, which environmental NGOs regard as far from green, and the Rural Development Fund which improves the long term viability of the farming sector and directly supports environmental projects in the countryside.
If negotiators supporting blank cheques for harmful agriculture manage to syphon off even more money from the Rural Development Fund into the direct payments system, this will be the final blow to the most environmentally effective part of the CAP.
In the past, many countries like Sweden, Austria and the UK have voluntarily used their national share of CAP direct payments to bolster their Rural Development programmes. Not only do farmers tend to benefit more from this investment as it stimulates the local economy, businesses and jobs, it also provides vital services for those who live in the countryside. This can range from introducing environmental improvements at farm level to helping finance rural broadband networks.
Other member states who still favour outdated direct subsidy policies, like Poland and Spain, want the freedom to move as much of the overall national CAP allocation into direct payments as possible. This will have the effect of guaranteeing more cash into the hands of farmers with fewer conditions through direct payments. This also has the benefit of reducing the matching funding that national governments have to put into Rural Development programmes. Direct payments come straight from Brussels coffers, while Rural Development is a mix of national and European money.
When Commissioner Dacian Ciolo? originally promised a green CAP deal in 2011, many politicians verbally supported such an agreement. Farmers would receive a portion of their direct payments for undertaking environmental measures.
After nearly two years of negotiations and empty promises, the backward looking Council of Agriculture Ministers and European Parliament Committee for Agriculture and Rural Development have managed to scupper the best elements of the proposed CAP reform. Instead, a genuine greening of direct payments did not happen and, worse still, the only truly green part of the CAP risks being emasculated.
MEPs like Paolo De Castro (IT/ S&D), Jim Nicholson (GB/ECR), Mairead McGuinness (IE/EPP), George Lyon (UK/ALDE), and many others who sit on the Agriculture Committee bear a huge responsibility in this. Judging from the outcomes so far, they have failed to represent the wider electorate and only protected the interest of few.
The blunt fact is that many Parliamentarians see their job as bringing home the CAP bacon – in other words, ensuring that their national slice of the CAP budget is as big as possible, that their farmers receive as many direct payments as possible, while all the time making sure that the fewest possible environmental conditions stand in the way.
Efforts were made from an early stage in the negotiations to hobble the Rural Development Fund and transfer available money towards Direct Payments. Farm ministers knew that cuts were being sought from the overall Common Agricultural Policy pot during the general EU budget review. Cleverly they ensured that when the axe was swung proportionally more of funding would come out of Rural Development (11,7% reduction for Rural Development vs. a 9,7% cut for direct payments).
Secondly, costly farm insurance mechanisms were introduced into Rural Development. This is meant to compensate farmers if their incomes are significantly reduced by a natural catastrophe of some sort. It has been estimated that if demands on this would be too large, the solvency of the whole Rural Development Pillar could be put at risk.
And now finally, the Council and Parliament are looking to strike the final blow to Rural Development, both in their own way, through the flexibility mechanism between Pillars. The AGRI Committee negotiators are looking to discourage Member States from forking direct payments over to Rural Development by opposing a 100% EU financing of these funds, while the Council wants to allow member states to shift up to 15%, and for some even 25%, of their Rural Development budget to direct payments.
The combination of all these measures has the potential of leaving Rural Development a shadow of what it once was and unable to make any meaningful financial contribution to environmental work.
The Rural Development Fund creates vitality in the countryside which in turn creates jobs and wealth across many different parts of rural life. If farmers want the opportunity for their children to live and work in the countryside, rural development monies are the smart option. An over-reliance on direct payments to farmers from the European taxpayer is looking a perilous horse to back for the future health of the countryside when we enter the next reform in 2020.