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The Council of Ministers finds agreement a minima

The European Parliament and the Council of Agriculture Ministers have just defined the architecture and the main lines of CAP reform that they intend to see implemented from 2023 and that they will defend during the negotiations which will start from November in the presence of the Commission (trilogues).

Faced with a Commission proposal breaking up the CAP into 27 national policies, posing a major risk of distortion of competition, severing the relationship between Europe and the final beneficiaries of this policy and placing most of the responsibilities on the Member States, the European Parliament has chosen by a very strong majority (more than 2/3) a policy bearing common agricultural, environmental and social ambitions for all the territories of the European Union, making the synthesis between economy and environment; a transparent policy in its management of European funds and able to demonstrate its effectiveness and measure the results it generates.

MEPs propose a rebalancing of the priorities and tools of both the 1st and the 2nd pillar around a search for dual economic and environmental performance. Thus, aid from the 1st pillar of the CAP will have to be structured between 60% to be devoted to income aid for farmers and 30% to new environmental aid which should also be beneficial to the economic performance of farms. As such, carbon sequestration measures, reduction of the use of inputs as well as precision and digital agriculture are listed. The second pillar must find a balance between environmental measures responding to local challenges which will mobilize at least 35% of rural development funds and investment aid – especially innovation – and risk management measures (insurance, mutual funds) which will get at least 30% of the 2nd pillar budget.

The German Presidency of the Council, for its part, succeeded in bringing together a majority of Member States on light platform, largely leaving the choices to be made to national decisions and reducing the common scope of the CAP. If the voted position provides for 20% of the 1st pillar to be devoted to eco-schemes, on the one hand it opens up the possibility of recycling part of it on other measures in the first years and on the other leaves it to MS of integral freedom define its content and ambition, taking the risk of giving rise to distortions of treatment (and therefore economic distortions) from one country to another in the absence of a clearly defined common ambition.

On how the CAP should be implemented, the position adopted by the European Parliament departs from the commission’s proposals, whereas the Council does not say anything and the President in charge recognized this night that the work remained to be done to really ensure simplification and efficiency in the implementation of the CAP.

The European Parliament intends to ensure the proper management of CAP funds and to seek simplification for farmers and Member States (where the Commission proposed a system that is simpler to manage for it but more bureaucratic for farmers and payment).

Monitoring of the effectiveness of the CAP (performance) is planned on the basis of a limited number of indicators analyzing every 2 years the results achieved in relation to the objectives validated within the framework of the national strategic plans.

With this position, diametrically opposed to the ideas of renationalizing the CAP proposed by the commission in 2018, the European Parliament strongly reaffirms that the common European dimension of the CAP cannot be called into question. It brings meaning and realism so that the first European policy can regain its raison d’être: a policy through which the European Union invests in its future through its agriculture and its rural areas. And by doing so, it sends a clear message to the Council as well as to the Commission.


Background

European Parliament’s position on the CAP adopted on October 20th, 2020

  • Bringing the 1st and 2nd pillars of the CAP into line with each other through a quest for double performance 
    • The European Parliament confirms the principle of national strategic plans to be presented by each Member State. These plans, which must ultimately be approved by the Commission, will define the ways and means that each Member State will mobilize in order to meet the objectives defined by the CAP.
    • Within this framework, each of the two pillars should contribute to the ecological transition and the economic performance of European agriculture.
  • 1st PILLAR
    • Any beneficiary of CAP aid will have to respect common EU cross-compliance rules in addition to the current cross-compliance and greening rules. As such, 5% of arable land will have to be devoted to EFAs and crop rotation will have to be carried out. The definition of this rotation remains an open question, as does the coherence between the inclusion of leguminous in the EP’s position and the agronomic reality of these crops.
    • 60% of the funds of the 1st pillar of the CAP will have to be allocated, in each Member State, to the financing of basic income support, redistributive aid (with a minimum of 6%), coupled aid and operational programmes,
    • 30% of the 1st pillar will have to be allocated over the period to the new green measures of the 1st pillar (eco-schemes). These will have to meet ecological transition objectives while at the same time aiming to improve the economic situation of farms. The measures that will be defined by the Member States in this framework of eco-schemes will have to fit into proposed areas of action, among which carbon sequestration, reduction of the use of inputs, agro-ecology or precision agriculture have been retained by the EP. Delegated acts to be proposed by the Commission would specify the criteria to be met by measures to be eligible for the eco-scheme system,
    • Member States will be able to mobilize 10% of the first pillar for coupled aid (+ 2% for programmes in favor of plant protein production) and 3% for measures in operational programmes outside the traditional sectors (wine, fruit and vegetables, olives, etc.), MS would have as well the possibility to use unused coupled support to finance more operational programmes
    • The sectorial programmes for the wine, fruit and vegetables and olive sectors are kept, and wine planting authorizations are proposed to be extended to 2050,
    • The ceiling for direct aid is set at €100 000 per farm (excluding eco-scheme aid, young farmers aid and wage costs). If 12% of the first pillar is allocated to redistributive aid, a Member State may decide not to apply this ceiling,
    • Possible transfers from the 1st pillar to the 2nd pillar are limited to 12% of the 1st pillar and should be allocated to environmental actions in the 2nd pillar. A transfer from the 2nd to the 1st pillar would be possible for a maximum of 5% (limit raised to 15% for countries with national average direct aids below the European average),
  • 2nd PILLAR:
    • 35% of the funds of the 2nd pillar should be devoted to environmental measures (40% of the ICHN aid could be counted in this framework) and 30% of this same pillar would be dedicated to measures financing investments and risk management tools,
    • improvement of risk management tools that can be triggered from 20% of losses and benefit from 70% CAP co-financing,
    • reinstatement of the current minimum and maximum amounts of aid per hectare paid under the 2nd pillar of the CAP.
  • Reinforced crisis management: the voted position provides for a multiannual crisis reserve of at least 400 millions which can increase other the period to €1.5 billion to finance exceptional measures and to take over risk management tools, mutual funds and SRIs.
  • At the same time, within the market management tools (single CMO), the proposals defined in the 2019 spring are adopted, with a view to better organization of the sectors, a rebalancing of the weight of farmers within the food chain, market transparency, and, in times of crisis, the ability to rapidly implement incentive plans to reduce production.
  • A balance between the need for transparency in the use of public funds, simplification and measurement of the environmental and economic results achieved

The position adopted by the European Parliament departs from the Commission’s proposals regarding the way the CAP is managed in order to ensure the sound management of CAP funds and to seek simplification for farmers and Member States (where the Commission proposed a system that was simpler to manage for itself but more bureaucratic for farmers and payment agencies). The eligibility of final beneficiaries of CAP aid will have to continue to be checked, as well as compliance with the rules defined at EU level and in the national strategic plans for the different types of measures. 

On the other hand, the Commission will have to rely on the work of the national certification agencies and will have to limit strictly any double checks on farmers, unless the certification agencies show malfunctions. 

Monitoring the effectiveness of the CAP is planned on the basis of a limited number of indicators analysing every 2 years the results achieved in relation to the objectives validated in the framework of the national strategic plans. The   proposals of the European commission on Annual Controls and Sanctions of the Member States on the basis of administrative performance indicators (number of hectares under the different CAP measures) are refuted, as is the idea of having as many control and sanction policies as there are Member States. 

With this position, which is diametrically opposed to the idea of renationalisation of the CAP proposed by the Commission in 2018, the European Parliament (led by the S&D and EPP groups) strongly reaffirms by a large majority opposing the rapporteur in charge of the dossier – that the common European dimension of the CAP cannot be called into question. It firmly rejects any temptation to renationalise and ultimately dismantle the CAP and thus sends a strong signal to the Council and the Commission.