The future of food and farming were at the heart of discussions across Europe during the month of June. Sustainable agriculture and funding are the fulcrum of the Common Agricultural Policy (CAP) and now that we are approaching the end of the European Programming period 2014-2020, the logical question to be posed is; what’s next?
The European Commission has published a proposal for the new CAP on the 1st of June and is minded to reach an agreement in the short-term. This proposal still needs to go through the filters of the European Parliament and Council, however it is anticipated that a political agreement may be reached by March 2019. It is still premature to determine what the impact of the new CAP will be on Malta, but there are indicators as to the new approach that the European Commission is proposing to implement.
Source: European Commission
I personally had the opportunity to attend a briefing session about the future of the CAP in Brussels on the 6th and 7th of June, the scope of which was to better understand the changes being put forward. The Q&A session held with Commissioner Phil Hogan was the highlight of this briefing.
What will change in terms of budget?
The political message is clear and as we all know, it all boils down to money. The CAP budget will continue to decrease over time, and will eventually shrink to a quarter of the total EU budget. The implementation is shifting “from a rules based approach to a performance based approach”, according to Commissioner Hogan.
The Commission proposal for the multiannual financial framework (MFF) 2021-2027 includes €365 billion for the CAP (in current prices). This corresponds to an average share of 28.5% of the overall EU budget. Out of this amount for the CAP, €265.2 billion is for direct payments, €20 billion for market support measures (EAGF) and €78.8 billion for rural development (EAFRD).
An additional €10 billion will be available through the EU’s Horizon Europe research programme to support specific research and innovation in food, agriculture, rural development and the bio-economy.
How will the distribution of direct payments become fairer?
The CAP has been criticised for treating farmers differently, depending on where they are located. Small farmers are very often not benefiting enough when compared to large scale farmers. The challenge to overcome is the elimination of the situation whereby two farmers in two different EU countries receive different amounts of payments.
Through the convergence principle, the CAP is made fairer. In practice, direct payments are reduced to equal shares bringing countries to a comparable level. Each country will also have to apply more stringent definitions in order to curtail abuse and ensure that only genuine farmers receive support.
As with small farms, the precise definition will be left up to each Member State to decide (subject to Commission approval in the CAP Strategic Plan), based on a number of factors.
How will the new CAP work in favour of the environment?
The Commission is defining this proposal to be an ambitious plan in favour of the environment. Various measures and funding mechanisms are being revised to provide more flexibility to Member States.
The CAP is deemed to be an economic policy with a strong environmental drive and efforts have been made over the past years to improve sustainability of agriculture by prioritising the environment. The European Commission has been criticised heavily for the greening policy by various stakeholders, so one can observe a felt change in the approach taken.
The major proposed change in this regard is that all Member States will now have to submit a plan detailing how they intend to achieve environmental targets. Three out of nine objectives of the new CAP tackle issues of climate change, natural resources, biodiversity, habitats and landscapes. Every country has its own specific environmental challenges, so improvements in their environment will need to come from their respective authorities. Member states now need to decide how to allocate their spending to safeguard the environment. This system offers more flexibility to countries but requires a great deal of political and institutional will from EU Member States.
How is the CAP committed towards Young Farmers
This is a priority issue for the Commissioner who opined that having low percentages of young farmers is unfavourable for the livelihood of rural areas. Member states will need to draw up a plan delineating how this percentage is envisaged to be increased. In order for financial packages to be approved, European countries will need to show effort and goodwill to attract young farmers into the sector.
According to Commissioner Hogan, SMEs and young farmers need to be given priority in every country to ensure long term sustainable agriculture. Some countries are already doing a lot but others need to show more commitment towards this cause. France, for instance, is implementing tax breaks, schemes in the security of loans, and is also providing leasing flexibility. These are some of the measures which other countries can emulate to attract young farmers.
Through the new CAP, the Commission is proposing a number of mandatory and voluntary measures for countries to take up. The maximum amount of aid for the installation of young farmers and rural business start-ups will be increased to €100,000. Rural development funding can be used to support schemes aimed at improving access to land and land transfer, traditionally a major barrier to young farmers joining the profession.
Such incentive-driven schemes could include; farm partnerships between generations of farmers; farm succession or transition planning services; brokerage for land acquisition; innovative national or regional organisations engaged in promoting and facilitating matching services between young and old farmers.
Young farmers will continue to benefit from investment support and knowledge transfer/training supported by rural development funds.
The CAP in Malta – Fact sheet published by the European Commission. March 2016
The EU Budget after 2020 – Fact sheet published by the European Commission. June 2018
Featured Image: North West Coast of Malta and Gozo | Photo by Tonio Lombardi