AGRI Committee welcomed Budget Commissioner Johannes Hahn for an exchange of views on the CAP budget in the new MFF and the recovery plan. Committee Chair Norbert Lins said members “welcome very much,” the extra money in the long-term financial perspectives & new recovery instrument, Next Generation EU. They would “continue to campaign against any cuts,” the German MEP said, insisting that “of course there should be proper account taken of inflation over recent years.” The farm sector had coped well with the pandemic, but even before COVID-19, it had already faced crises, notably the challenge of climate change, Lins said. It was important for farmers to be able to plan, which meant it was “very important for there to be enough money in the budget to be able to deliver on the Commission’s various ambitious plans,” he added. 

It should be noted that Comagri MEPs gave the impression that they welcomed the Commission’s proposal, with the 2% increase in current euros (including the recovery plan) relegating to second place the €34 billion decrease, expressed in constant 2018 euros, in the funds to be allocated to agriculture over the period 2021-2027 compared to the period 2014-2020.

Commissioner Hahn’s address

Hahn told the Committee that now was “a moment for Europe to prove its hour of solidarity.” “The EU budget is at the heart of this recovery,” he said, expressing his gratitude to farmers “for their fantastic work in the past & in particular during this crisis.”

The Commissioner reminded MEPs that the EC had activated measures to support the farm sector & explained the changes in the revised MFF, putting the total for 2021- 2027 at “more than €348 billion for the CAP at 2018 prices (constant prices).” The figure includes €258.3bn for the 1st pillar (direct payments & market expenditure) & €90bn for Rural Development. The Commission’s figure for the total is €348.26bn, on a 2018 basis compared with €391.44bn in ‘current prices’. 

The revised MFF will introduce two new elements, namely: 1) top up of € 4 billion for the 1st pillar; and 2) top up of € 5 billion for 2pillar. Additional € 15 billion for rural development will be allocated in the context of New Generation EU recovery entrustment. 

The extra money will “allow us to beef up our crisis management in agriculture, to have a true & well-functioning crisis reserve that we can use in times of need”“We want to build green, digital &, very important again, resilient farms & farming systems,” Hahn said. “As many farmers will tell you it’s very difficult to become green when the figures on the bottom line are red.” “When the economy around us is starting to catch fire this is not a time to sit down & haggle about who gets to hold the hose & how much water we may need”. 

On financing the repayment, he noted 2 alternatives: 1) higher national contributions at least in the next MFF after 2021-2027, or 2) introduce new own resources in this new MFF to allow for steady and reliable flow of income that can serve for repayments. If the own resources are supported, the estimated 30 years repayment period can be reduced, depending on the magnitude of new taxes.

Coordinators’ reactions

Herbert Dorfmann (EPP) drew attention to the significant difference in the crisis support to agricultural sector in the EU and the US (€80 million compared to $ 19 billion respectively). He said “we ought to be able to do more to support producers,” calling the Commission’s latest MFF blueprint “a positive proposal.” And he enquired clarifications on a number of aspects: the modalities for the connection of the New Generation EU fund to the MFF; whether dedicated money for rural development will be separate from the rural development fund; and if farming will be able to benefit from resilience programs in Member States.

Paolo De Castro (S&D) thanked the Commissioner “& the entire College for the ambitious budget proposals,” telling him that “you have taken account of the requests made by Parliament & we are grateful for that.” He pressed Hahn to make sure that job creation, rather than “historic benchmarks” would be used as the basis for the distribution of resources. 

Ulrike Müller (Renew Europe) said the Committee had wanted more money for the agriculture budget for “very good reasons.” She stressed the need to be able to deal with crises when they arise. “We need to be able to ensure food supply, for example,” she said, adding that the sector had a lot to contribute to the Biodiversity & Farm to Fork Strategies, but “this needs to be financed.” The euro-deputy also emphasised the necessity to help small agricultural businesses. “They need to be in a position where they can invest in the digital, for exampleThese are often things that can’t be afforded in small businesses.”

Ivan David (ID) told Hahn that Greece had “already been robbed,” & that payments from the Recovery Plan should not mean that the same awaits “Italy & other states.” He complained that “the Commission wants to make coal & gas & oil more expensive for citizens.” The Czech MEP wanted to know when the EU would make subsidies paid to farmers in his country equal to those received by their counterparts in other MS. 

Martin Häusling (Greens) described the EU response to the crisis as “really appropriate.” “As Greens we particularly welcome what’s going on in the 2nd Pillar,” he said. He wanted to know how funding would be distributed & wondered “why we are not using the crisis reserve?” “There needs to be a longer-term response,” he added. 

Zbigniew Kuźmiuk (ECR) welcomed the increase in funds in the MFF, over the Commission’s original proposal. The Polish MEP questioned whether it was enough, for a sector that had suffered from the crisis, while “EU consumers have not lacked food.”

Luke Ming Flanagan (GUE-NGL) stressed the need for value for money from the extra budget, or “the maximum bang for our buck.” He wanted to hear the Commission’s thoughts on convergence, given that farmers in some countries had been suffering more because they receive lower payments. 

Addressing MEPs who questioned why the crisis reserve had not been used, Mr Hahn said: “It is necessary to think about how to make the crisis reserve work as originally planned”.