Improving governance of the future CAP

The proposed CAP legislation launched in 2018 made two important innovations in the governance of the CAP. First, it gave much greater flexibility to Member States in the way CAP interventions and CAP rules could be defined in individual countries. Second, it proposed to change the monitoring of Member State actions and the use made of the EU CAP budget from detailed compliance with very specific rules set out in legislation to a more performance-based approach.

The Commission’s motivation was clear. It expected that giving greater flexibility to Member States to design their own CAP interventions and rules would ensure better value for money because the interventions would be more effective.

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Farm and non-farm income comparisons

One of the objectives for EU agricultural  policy set out in the Treaty of Rome (now the Lisbon Treaty) is to ensure a fair standard of living for the agricultural community, in particular by increasing the individual earnings of persons engaged in agriculture.  In its Communication The Future of Food and Farming in November 2017 that launched the public consultation phase of the current CAP reform, the Commission included a graph comparing average farmer income with average gross wages and salaries in the total economy to make the point that farmers’ income is still lagging behind salaries in the whole economy.

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Issues at stake in the trilogues: II Public intervention

This is a second, long-delayed, post on the issues at stake in the trilogue negotiations between the Council, Parliament and Commission on the CAP reform dossier. The first was on relevant definitions, this time on the rules for public intervention.

I have previously discussed the history and described the rules for public intervention in the run-up to the 2013 CAP reform in this post. Anyone who wants a quick refresher might find it useful to re-read that post. The Commission also has a website explaining the market management measures under the current CAP.

The issues at stake in the current trilogues are like the debates in 2013.

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Level playing field provisions in the EU-UK TCA

My previous post discussed the general background to the EU-UK Trade and Cooperation Agreement (TCA) and specifically its provisions on tariffs and non-tariff barriers.  An innovative part of the Agreement concerns what are called ‘level playing field’ provisions in various areas including state aids, taxation, competition policy, labour standards, and environmental protection and climate change.

By demanding that the Agreement address these issues, the EU wanted to avoid a situation where the UK could use government subsidies, a more beneficial tax regime or more lenient regulatory standards to give its producers an advantage in competing with EU producers in the tariff-free free trade area which might be seen as unfair.

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The EU-UK Trade and Cooperation Agreement

Let us be clear at the outset. Brexit was always going to be a lose-lose situation for both the UK and the EU. Having said that, the Trade and Cooperation Agreement (TCA) agreed on Christmas Eve between the UK and the EU which provisionally entered into force on 1 January this year was a very significant achievement for the two negotiating teams.

It represents a significant improvement over the ‘no deal’ Brexit that had threatened in the previous weeks. Critically, it prevents the imposition of tariffs on UK-EU trade, although subject to rules of origin to determine eligibility for the zero-tariff preferences.

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Eco-schemes a work in progress

This post is written jointly with Dr. Norbert Röder of the Thünen Institute Federal Research Institute for Rural Areas, Forestry and Fisheries.

Eco-schemes (schemes for the environment and climate) are the main innovation in the green architecture of the CAP proposed by the Commission in its draft CAP Strategic Plan Regulation in June 2018. As mandatory instruments, they would oblige Member States to allocate a proportion of their Pillar 1 payments to schemes that would directly benefit the environment and climate. Participation would be limited to genuine farmers but would be voluntary for them.

Both the Council and Parliament have proposed amendments to the Commission’s original proposal.

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COVID-19 leaves limited traces in preliminary 2020 agricultural accounts

Eurostat has now published its preliminary estimates for the economic accounts for agriculture in the EU for 2020. This gives us the first authoritative overview of the impact of the COVID-19 pandemic on agricultural markets and farm incomes in what has been an extraordinary year. Until now, information on monthly trends in agricultural prices and agricultural trade has given us some partial insights into the impact of COVID-19 on the agricultural sector. Despite wobbles in some sectors, by and large these indicators show that the agricultural sector has been remarkably resilient. Despite this, significant aid packages have been made available to farmers by EU Member States.

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Farm consolidation continues

How farms are structured in the EU has become the focus of increasing attention as a result of growing political concern over trends in farm consolidation and farmland concentration. This political interest has focused on different elements of structural change in EU agriculture. For some, the focus has been on land grabbing and the rise of large-scale land deals; for others, it is safeguarding the position of the family farm; for some, it is opposition to industrial farming and the growth of ‘mega’ farms; for others, it is defence of small farms, often seen as integral to food sovereignty; for some, the issue is generational renewal; while yet others focus on the decline in the overall number of farms.

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The CAP Transitional Regulation and Next Generation EU funds

The European Parliament approved last Tuesday evening the common position on the CAP Transitional Regulation previously agreed with the Council. Once the Council gives its formal approval, it will take effect from 1 January 2021. The Regulation provides legal certainty regarding the rules for payments to farmers by continuing the application of the rules of the current CAP framework in the two calendar years 2021 and 2022 under the ‘old rules, new money’ principle.

The Regulation makes necessary amendments to the four CAP Regulations that make up the 2013 CAP reform (direct payments, rural development, single common market organisation, and horizontal matters).

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The EU’s proposed ‘net 55%’ reduction target for 2030 – a clarification

One of the decisions taken at the European Council summit last week was an agreement that “To meet the objective of a climate-neutral EU by 2050 in line with the objectives of the Paris Agreement, the EU needs to increase its ambition for the coming decade and update its climate and energy policy framework. To that end, the European Council endorses a binding EU target of a net domestic reduction of at least 55% in greenhouse gas emissions by 2030 compared to 1990.

The European Council thus endorsed the Commission’s proposal in its 2030 Climate Target Plan Communication for an EU-wide, economy-wide greenhouse gas emissions reduction target by 2030 compared to 1990 of at least 55% including emissions and removals.

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