By how much is the CAP budget cut in the Commission’s MFF proposals?

Unlike in its presentation of its proposal for the current MFF in 2011, the Commission on this occasion in presenting its proposal for the 2021-2027 MFF did not provide comparative details on ceilings in the last year of the earlier MFF.

There are some understandable reasons for this. The next MFF is designed for 27 Member States without the UK, and so is not directly comparable with the current MFF. Also, the Commission has proposed a different and more simplified structure for the MFF which makes direct comparison difficult.

Nonetheless, in the absence of a column showing 2020 ceilings for the various MFF headings, it is not straightforward to try to work out whether the 2021-2027 figures represent an increase or decrease in proposed commitments and by how much.

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The CAP and its limited effect on development

Dr Bettina Rudloff of the Stiftung Wissenschaft und Politik / German Institute for International and Security Affairs and Michael Brüntrup of the Deutsches Institut für Entwicklungspolitik / German Development Institute recently published a joint briefing paper on the implications of CAP reform for development. Their paper is available in English to download here, and they have contributed the following abstract.

For a long time the CAP has been accused of causing damage to developing countries. However, several reforms have limited these risks to a handful of issues. Especially further coupling and the missing internalization of costs related to climate and the environment are the remaining risks for developing countries.

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Why capping will be a mirage

Commissioner Hogan confirmed in his press conference folllowing the publication of the Commission’s proposal on the next Multi-annual Financial Framework that the Commission intends to introduce a cap of €60,000 on the maximum amount of direct payments any holding can receive in the next CAP legislative period. Commission President Juncker is reported as telling the Belgian Parliament earlier this week that “the European Commission will propose a €60,000 limit on individual direct payments to support small farm holdings instead of ‘agricultural factories’”. These statements are misleading and disingenuous, because they ignore what is likely to be the fine-print in the Commission proposal.

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Commission assaults rural development spending to protect direct payments

Please note that the key chart in this post (the third chart, comparing the CAP ceiling in 2027 with that in 2020, has been updated using Commission figures in this post.

The Commission’s MFF proposal (including both ceilings for expenditure as well as ideas on how to finance the budget) was published yesterday. The Commission claims that the proposal includes reductions of roughly 5% in both the Common Agricultural Policy and Cohesion Policy programmes, as they have the largest financial envelopes. However, another way of looking at the numbers suggests that the cut is more like 15% overall in real terms over the period of the next MFF, but with a much bigger cut in Pillar 2 rural development expenditure of around 26%.

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