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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EU Farm to Fork Strategy: How reasonable is the turmoil predicted by USDA?

We are pleased to welcome this guest post by Dr Yelto Zimmer, who is the coordinator of the agri benchmark Cash Crop Network at the Thünen Institute, Germany. Comments can be emailed directly to yelto.zimmer@agribenchmark.net.

The US agricultural ministry (USDA) recently published a report on the likely consequences if the EU Commission’s Farm to Fork (F2F) Communication were to be put in place. In this paper, the Commission proposes a set of measures that are supposed to lead to lower greenhouse gas emission in European agriculture and improve the overall environmental and public health performance of the sector.

Even in the modest USDA scenario, the projected outcome from F2F would be substantial turmoil of EU agriculture and even some significant changes in global agriculture.

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Commission’s 2030 Climate Target Plan proposes radical changes in the rules governing agricultural and land GHG emissions

In my post in March 2020 on EU climate policy and agriculture, I highlighted the limited expectation among Member States in reporting their projected greenhouse gas (GHG) emissions to the European Environment Agency (EEA) to make significant reductions in agricultural emissions by 2030.

Given the greater climate ambition set out in the European Green Deal and the Farm to Fork Strategy, I argued that, to properly incentivise, motivate and track progress in the farming sector, a focus on agricultural emissions alone is misleading and should be supplemented by also considering changes in land use emissions and removals that are under the control of farmers.

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CAP decisions make slow progress towards the green transition: I Definitions

Last week both the AGRIFISH Council and the European Parliament agreed their negotiating mandates to enter the final stage of the approval process for the framework of the future CAP, thus opening the way for the trilogue process with the Commission to reach final agreement on the CAP legislation in the early part of next year.

Agreeing these positions was not without drama in either the Council or Parliament. The Council press statement announcing that its negotiating position had been agreed was issued at 04.43 on Wednesday morning 21 October 2020 after an extra night of negotiations following its two-day meeting.

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Agriculture in the European Green Deal: From Ambition to Action

Today I had the pleasure of contributing to a panel discussion on the European Green Deal at the annual DG AGRI workshop on the medium-term outlook for EU agricultural markets, income and environment. This post consists of a slightly extended version of my remarks.

The European Green Deal is a growth strategy that aims to transform the EU into a prosperous, fair, competitive and resource-efficient economy, with no net emissions of greenhouse gases by 2050, zero pollution and a decoupling of economic growth from resource use. It is also a response to urgent challenges.

Despite progress in some areas, many trends in the farm and food sectors are going in the wrong direction.

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Commission publishes Member State envelopes for direct payments and rural development 2021-2027

The Commission has published without fanfare on its MFF website the breakdown of national pre-allocated ceilings for direct payments and rural development for the coming 2021-2027 programming period as well as their scheduling over the seven-year period. These figures are based on the European Council’s MFF conclusions in July 2020 and assume that these conclusions will eventually receive the approval of the European Parliament. As I write this, this is not a foregone conclusion. Talks between the German Presidency and the Parliament negotiators on the MFF package made no progress yesterday evening despite an attempt by the Presidency to break the logjam by offering to find additional funds for budget lines supported by the Parliament at a mid-term review of the MFF.

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CAP Transition Provisions 2021 Regulation delayed

In June 2020 the Council and COMAGRI negotiators reached a partial provisional political agreement on all essential aspects of the Commission draft Regulation extending the CAP provisions beyond 2020 (I discussed the Commission’s draft Regulation in this post). This followed a decision by COMAGRI to enter into negotiations with the Council without first seeking a Parliamentary first reading position on the basis of its legislative report on the draft Regulation agreed in May 2020. While most of the provisions of the CAP direct payments regulation would apply as long as that regulation remains in force, the transition regulation is necessary to provide a legislative basis for other CAP spending after 1 January 2021.

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New approaches to rural land management and governance: restoration, regeneration and rewilding

We are pleased to welcome this guest post by Professor Ian Hodge, Professor Emeritus of Rural Economy in the Department of Land Economy, University of Cambridge, UK.

Agricultural policy reform will always be unfinished business.  Shifting political priorities and power bases, changing technologies and developing environmental pressures will all alter the balance of priorities and mechanisms.  But opportunities for radical policy reforms are rare.  The periodic reforms of the CAP have as yet failed to deliver the level of change that many readers of this CAP reform blog would like to see.  However, in the UK, Brexit offers a unique opportunity to rewrite policy from the ground up. 

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Keep an eye on coupled income support

Much attention is rightly focused on the changes that the co-legislature (Council  and Parliament) might make to the Commission’s proposed green architecture in the next iteration of the CAP (see contributions from Lakner and Pe’er and ARC2020 as well as my earlier post). There are also other elements in the proposed CAP framework with potentially important implications for production and environmental outcomes. In this post I focus on the proposals for one of the more production-distorting elements, namely, coupled income support.

The background

The conditions governing what is called ‘voluntary coupled support’ (VCS) in the current CAP and what the Commission has relabelled ‘coupled income support’ in its May 2018 proposal for the next CAP have been gradually relaxed in the current CAP period (I have previously described in earlier posts the changes made in the 2013 CAP reform and the changes introduced in the Omnibus Regulation).

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