Can Europe help combat the dying out of farms?

An increasing number of traditional farms are being left abandoned. [shutterstock/dvande]

In the debate over the reform of the common agricultural policy (CAP), there is also the question of how funding allocation can be better adapted to the regions’ specific needs. If regions face very different challenges, spreading funding thinly will not help. EURACTIV Germany reports.

It is clear that Europe’s farmers are having problems. In just ten years, the number of farms in Germany has more than halved. Although the remaining undertakings are becoming bigger, fewer and fewer workers are required for the same output.

Traditional landscapes that were once highly valued are increasingly becoming barren areas, characterised by abandoned, crumbling farmhouses, unemployment and a lack of prospects.

However, the EU spends more money on agricultural policy than on anything else. Supporting rural areas in the form of the second column of the CAP is one of the main concerns. So, why are there an increasing number of problems?

A possible answer is that the funding is not used effectively enough. This is because a large part of it is distributed arbitrarily according to company size and insufficient consideration is given to the specific challenges of individual regions.

More flexibility in agricultural support

Ultimately, not every region faces the same problems. Half of the German population lives in the countryside. However, there are considerable differences between economic strength, land use and age distribution of different areas. While in some areas there is a shortage of young people wanting to take on the farms, others struggle with high unemployment or weak infrastructure.

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“In the current CAP, measures and implementation modalities are largely specified by detailed regulation. This results in a complex implementation that is not always sufficiently tailored to the national and regional conditions,” said Martin Scheele, who represented the European Commission at a EURACTIV Germany event in Berlin on the future of EU agricultural policy on Monday (3 December).

Therefore, the CAP is supposed to be made more flexible by the reform proposed by the European Commission. In the future, greater attention will be paid to results rather than to the compliance with rules. The member states would have greater freedom in how they use funding in order to take greater account of the different needs of regions.

“In the new implementation model, only the broad lines are determined at EU level. The member states and regions develop their CAP strategy plans with a high degree of flexibility with respect to designing assistance and appropriations. There are few rules about how this should be done,” Scheele explained.

Nevertheless, even after the reform, the greater part of the funding would still be allocated through the first pillar, in the form of direct payments to farmers. Above all, this should save funding in the second pillar.

“This weakens precisely the areas of action of the EU agricultural policy which are, to a large extent, focused on specific objectives, such as environmental, nature and animal protection. This includes agri-environmental measures, such as varied crop rotation, environmentally-sound pasture farming and ecological management,” criticised Ulrich Jasper, the managing director of the German working group for rural agriculture (AbL).

On the other hand, Scheele argued that taking better account of regional differences should also be made possible in the future. Regional specificities could be taken into account by using the possibilities to reallocate funds between the two pillars.

Scheele said this would make it possible to reallocate 15% of funds from the first pillar to “regionally differentiated interventions in the second pillar.” Moreover, he added that the regionally differentiated “green rules” should be funded from the first pillar.

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Jasper believed this was a step in the right direction, while, similarly to the European Court of Auditors (ECA), criticising the lack of obligations. He added that people should look less to the European Commission and more to the German Federal Ministry for Economic Affairs and Energy, where the Commission’s proposals are currently being pulled to pieces in the Council of the European Union.

Greater leeway for regions

Although the member states are certainly in a better position than the EU to bear regional specificities in mind, local farmers know best.

Andreas Eisen, for example, who spoke for the federation of cooperatives at EURACTIV Germany’s event argued that the local level should be strengthened. “For this purpose, it would be desirable if the individual German states could themselves determine how the first pillar is designed,” he said.

Moreover, there needed to be greater planning certainty for the local farmers, said Eisen. The weather, as well as successive political debates, created uncertainty, which complicated long-term investment decisions. Eisen therefore also criticised that the CAP reform was linked to the debate on the future EU budget.

“In particular, greater planning certainty would emerge if the discussion on the EU’s medium-term financial framework did not automatically lead to a debate on the CAP reform. Agriculture plans over the longer term and more sustainably than in a seven-year rhythm,” Eisen said.

CAP reform offers opportunities

There is also an awareness of this problem in Brussels. This is why every national plan to use CAP funds should include a risk management strategy in the future, according to the Commission’s reform proposals. Politically, greater calm could be restored if the reform and the financial framework are wrapped up from 2021.

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But is the reform adequate to more effectively combat the dying out of farms? “In both pillars, the CAP provides a broad spectrum of funding opportunities which can support smaller businesses in a targeted manner,” Scheele vaguely answered.

“Support for the ability to withstand crises, business development and the development of new sources of income, ranges from direct payments, start-up aid and investment support to consulting and training,” he continued.

However, these are just possibilities. The member states will have to increasingly answer for whether and how these possibilities are used. There is, therefore, an opportunity to use the CAP to respond more stronlgy to regionally specific challenges and the needs of smaller businesses. But whether this opportunity will be used is a different matter.

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