As this was a relatively quiet week for news on CAP reform, I thought it might be useful to gather together in one place some references to the debate that has taken place on CAP greening since the publication of the Commission’s proposals in October 2011. This remains one of the knottiest issues to resolve in the CAP trilogues. These papers provide a guide to the general issues in this debate. There is also an emerging literature which attempts to estimate the impact for particular regions and farming systems of implementing the greening measures which I do not cover here. The papers are presented in rough chronological order and include a number of my own contributions so there is a certain amount of repetition.
Alan Matthews, Environmental Public Goods in the New CAP: Impact of Greening Proposals and Possible Alternatives, 2012, Brussels, European Parliament.
This note prepared for the European Parliament’s COMAGRI discusses the greening component of direct payments in the Commission’s legislative proposals of October 2011 for the Common Agricultural Policy in the period after 2013. Based on an analysis of their likely consequences it puts forward a range of options for the consideration of MEPs for how these proposals might be amended to improve their environmental impact, to reduce their administrative complexity and to improve their cost-effectiveness, including possible alternatives.
Update 7 May 2013.
Allen B., Buckwell A., Baldock, D. and Menadue, H., Maximising environmental benefit through ecological focus areas, London, Institute for European Environmental Policy,60pp, 2012.
The creation of Ecological Focus Areas, extending to seven per cent of the eligible area of arable and permanent crops, has been recognised as having the greatest potential to address a range of environmental concerns in the farmed countryside. How much of this potential is realised in practice depends to a large degree on precisely how the proposals evolve, the final form they take, the scope for tailoring the approach to local circumstances and the way in which Member States use this discretion, as well as the response by farmers. This report, prepared at the request of the Land Use Policy Group (LUPG), has been prepared to identify some key issues while this detail is awaited. Based on the literature, past experience and a seminar in Brussels, it aims to identify the key parameters that need to be addressed in a new policy.
Alan Matthews, 2012. Greening the CAP: the way forward, QA Rivista dell’Associazione Rossi-Doria, 4, 37-60.
This paper reviews the debate on the proposal to introduce a green payment in Pillar 1 of the CAP since the publication of the Commission’s legislative proposals for the EU’s Common Agricultural Policy post-2013 in October 2011 to June 2012. Both arms of the legislative authority have begun to formulate their positions in response to stakeholder reactions. Many relevant details of how the proposals will be implemented remain unclear, but an attempt is made to examine their potential contribution to environmental improvement. Increasing the ambition of agri-environment measures in rural development programmes in Pillar 2, combined with strengthened cross-compliance standards, could offer more effective environmental protection at a lower cost in terms of foregone food production. The legislative process to date indicates that the final outcome will be based on the Commission’s original ideas but there is still scope to improve the environmental impact of CAP spending in the next MFF period.
This paper is based on an earlier conference paper
Alan Matthews, Greening the CAP: the way forward, Paper prepared for the 126th EAAE Seminar “New challenges for EU agricultural sector and rural areas. Which role for public policy?”, Capri (Italy), June 27-29, 2012.
Kaley Hart and Jonathan Little, Environmental approach of the CAP legislative proposal, Politica Agricola Internazionale – International Agricultural Policy, 2012, Issue 1, 19-30.
For the past two decades, the integration of environmental concerns within the CAP has been characterised by a gradual shift in emphasis towards more targeted, regionally defined and programmed approaches, embodied in the agri-environment measures and Pillar 2 more generally, underpinned by cross compliance. These elements all remain within the current proposals, however, a major new element has come into play – the introduction of green direct payments in Pillar 1. The proposals aim to extend a basic level of environmental management to the majority of farmland in Europe, recognising the scale of the environmental challenges to be met. However, these are contentious proposals, faced with criticisms that they are both too demanding and too weak. At the same time, their introduction is coupled with a net reduction in the Pillar 2 budget over the next programming period. Within the context of the broader CAP proposals, this paper considers the opportunities and risks embodied in the proposals for green direct payments as well as possible alternative options. It considers the implications of the proposals for the environment and whether they genuinely will lead to the much needed improvements in environmental outcomes required to meet the significant environmental and climate challenges facing the EU.
Matthews, A., Greening the Common Agricultural Policy post-2013, Intereconomics, 47, 6, 326-331, 2012.
The projected allocation in the Commission’s proposal for the 2014-2020 Multi-annual Financial Framework (MFF) of €42.78 billion for Pillar 1 direct payments in 2020 implies an annual allocation of €12.8 billion to the green payment during the latter years of the programming period. This compares to annual average spending on agri-environmental measures in Pillar 2 in the 2007-2013 period of just over €3 billion. At a time of severe public funding difficulties in EU member states, the environmental pay-offs need to be clearly demonstrated in order to justify this expenditure. We argue that there are inherent flaws in the Commission’s approach to greening which make it difficult to defend the proposal. In the ultimate political compromise on the CAP2020 negotiations, there is a danger that greening will be little more than a rhetorical device used to justify the continuation of direct payments to EU farmers.
Matthews, A., Greening CAP payments: a missed opportunity?, Dublin, Institute for International and European Affairs, 2013, 14pp.
The most prominent innovation in the European Commission’s 2011 proposal for new regulations for the Common Agricultural Policy post-2013 was undoubtedly to earmark a proportion of direct payments as a mandatory green payment for farmers who follow a number of practices beneficial to the environment and climate. This was put forward both to address some of the pressing environmental challenges arising from farming activity across the EU as well as to justify the continuation of a large budget for agricultural policy in the parallel negotiations on the future of the EU’s long-term budget. The proposal met with a frosty reception, and the amendments being considered by both the Council and Parliament suggest that, while greening Pillar 1 payments will survive as a concept, its practical environmental benefits will be negligible. This policy brief suggests some reasons for this apparent failure of the Commission’s strategy and reflects on the implications for future efforts to better integrate environmental objectives into agricultural policy.
Allen, B. and Hart, K., Meeting the EU’s environmental challenges through the CAP – how do the reforms measure up? Aspects of Applied Biology, 118, pp9–22, 2013.
Since 1985 there has been a gradual integration of environmental objectives and ambition into the CAP, yet there continues to be a mismatch between the scale of the environmental challenges facing EU farmland and the scale of the policy response. Taking an EU perspective, this paper considers the extent to which the 2014?2020 CAP reforms have the potential to meet the EU’s considerable environmental challenges. It explores the opportunities and barriers to achieving real environmental progress and reflects on whether the reform is likely to be looked back on as a genuine step forward in mainstreaming the environment into the CAP or a missed opportunity.
Kaley Hart, Principles of Double Funding, London, Institute for European Environmental Policy, 2013.
A fundamental principle underpinning the rules for public expenditure in the EU is that no costs for the same activity can be funded twice from the EU budget. This is known as double funding and is the subject of heated debate within the current CAP reform debates, specifically with regard to the relationship between the new green direct payments and support under the agri-environment-climate measure in Pillar 2. This briefing, written by IEEP on behalf of the UK’s Land Use Policy Group (LUPG), explores this double funding issue in relation to the CAP proposals and ongoing negotiations, considering the environmental implications of any weakening of these rules.
Kaley Hart and Hetty Menadue, Greening the CAP – how ‘equivalent’ are alternative approaches?, London, Institute for European Environmental Policy, 2013.
The study assesses in broad terms the degree to which existing certification schemes for farm products (involving environmental requirements) or voluntary measures under agri-environment schemes could be considered to be ‘equivalent’ to the three greening measures proposed by the Commission in October 2011. The review shows that while the concept of equivalence may sound like a reasonable and convenient approach in theory, the practical issues with its application are likely to lead to far greater administrative complexity and cost, both for Member States and within the Commission, with arguably little additional environmental benefit. As the CAP reform negotiations enter their final stages, the study urges the Commission, Council and European Parliament to think through the issues that equivalence raises and find solutions that simplify rather than over-complicate the future delivery of environmental outcomes from agriculture.
Alan Matthews, Greening agricultural payments in the EU’s Common Agricultural Policy, Contributed Paper prepared for presentation at the 87th Annual Conference of the Agricultural Economics Society, University of Warwick, United Kingdom, 8 – 10 April 2013.
In formulating its proposals for the revision of the CAP post-2013, the Commission opted to pursue further integration largely through Pillar 1 through the introduction of a ‘green’ payment for farmers following a specified set of mandatory farm practices. The legislative process was not concluded in April 2013, but the initial positions of the Council and the European Parliament indicate that the level of greening ambition in this CAP reform will be very limited. Some explanations for the apparent failure to significantly reshape the CAP to tackle the problems faced by the natural environment are proposed. It is suggested that, far from being complementary, cross compliance and voluntary agri-environment measures are competing approaches to further greening of the CAP. Advocates of a greater focus on environmental objectives need to choose between these approaches.
(Updated 17 May 2013) A longer version of this paper can be found as
Alan Matthews, Greening agricultural payments in the EU’s Common Agricultural Policy, Bio-based and Applied Economics 2(1): 1-27, 2013
David Baldock and Kaley Hart, A greener CAP: still within reach, London, Institute for European Environmental Policy, 2013.
This short paper provides an overview of the state of play on the greening in Pillar 1, Pillar 2 and cross-compliance. It reflects on the architecture of the CAP as well as the implications of the different ways in which green elements have been watered down in negotiations, suggestions are made about how the outstanding issues should be resolved if greenwash is to be avoided and a credible CAP put in place.
If there are additional papers that I have missed, please let me know.
Picture credit B. Monginoux / Landscape-Photo.net (cc by-nc-nd)
Readers might also be interested in N. Cantore, 2013, The potential impact of a greener CAP on developing countries, London, Overseas Deveopment Institute, available at
http://www.odi.org.uk/sites/odi.org.uk/files/odi-assets/publications-opinion-files/7893.pdf.
From the abstract:
This paper examines the consequences of proposals to green the CAP for developing countries. When the new greening measures are binding and change the behaviour of EU farmers, this will reduce the production of European Union (EU) farmers in the short run, which could lead to increased commodity prices. This in turn would stimulate exports from developing country producers (by up to 3% for certain countries and commodities) but harm food-importing countries. In the medium to long term, a reduction in emissions would reduce damage resulting from climate change in developing countries.
Overall, the impacts are very uncertain, but we estimate that, in the most optimistic hypothesis, the environmental gain in 2014 from a CAP greening emission reduction would be about 3% of what the EU currently spends on aid; if farmers continue with CAP greening environment-friendly practices until 2023 it would represent around 25% of aid. Of course, given that the greening of the CAP is beneficial, this begs the question as to whether the greening of agriculture could be achieved without the CAP, and indeed whether the CAP is needed at all – because it is not the only or even the best instrument to achieve the goal of preserving the rural environment. Moreover, emission reduction activities could actually take place in developing countries, given that they have the world’s highest potential for emissions abatement in agriculture. In this regard, the Clean Development Mechanism (CDM) could present a means to move beyond current activities to include most land-use activities.
Thank you very much for this. As a student writing her second dissertation on CAP Greening, I will find this extremely helpful.