Commission blueprint for future of the CAP

The European Commission’s blueprint for the future of the CAP has been published. While the communication sets all the reasons why the Commission thinks the EU needs to keep on supporting its farmers, it puts off all the really big decisions for another day.

According to the Commission, the main objective of the CAP is “a territorially and environmentally balanced EU agriculture”. What this boils down to is that the Commission believes the EU should supplement any money farmers earn themselves with money from EU taxpayers. A considerable number of justifications are provided, among them:

– the EU should pay farmers because farm incomes are subject to greater variability and are, on average, lower than incomes in the rest of society. The Commission provides no evidence for this highly contested assertion.

– the EU should pay farmers to farm in places where it is too cold, to dry or too mountainous for farming to be economically viable, because it’s important that there is farming activity in every part of the European continent.

– the EU should pay farmers because they face higher costs due to EU regulations on pollution, the environment, food safety and animal welfare. In this sense, farming is a ‘special case’ for the Commission does not advocate paying anything to non-agricultural businesses that face higher costs due to European labour, environmental and health and safety regulations.

– the EU should pay farmers to keep the countryside looking good.

– the EU should pay farmers to stop decimating Europe’s wildlife and polluting its rivers and seas.

– the EU should pay farmers to help them adapt to climate change and to reduce their greenhouse gas emissions.

– the EU should pay farmers to help them start side businesses that are not directly related to farming (diversification).

– the EU should pay farmers to ensure that European agriculture maintains a variety of farm sizes and diverse farming methods that ‘contribute to the attractiveness and identity of rural areas’.

– the EU should pay farmers because they employ people in rural areas and farming is ‘the social fabric of rural areas’.

Having established beyond all doubt why it’s vitally important that the EU pay farmers, the Commission goes on to outline the ways it would like to pay farmers.

First, a scheme to provide ‘basic income payments’ to all farmers. These will be broadly related to the size of farm, though an upper limit for very large payments “should be considered”. The Commission suggests that some of the inequalities of the current distribution of aids to farmers be addressed, though it rejects the radically egalitarian idea that every EU farmer should receive the same amount per hectare. The recipe for “Ciolos fudge” is as follows:

“the question is how to reach an equitable distribution that reflects, in a pragmatic, economically and politically feasible manner, the declared objectives of this support, while avoiding major disruptive changes which could have far reaching economic and social consequences in some regions and/or production systems. A possible route could be a system that limits the gains and losses of Member States by guaranteeing that farmers in all Member States receive on average a minimum share of the EU-wide average level of direct payments.”

If you are able to understand the meaning of that, then I advise you to apply for a job as a Brussels bureaucrat, at once.

Second, a scheme to pay farmers for ‘environmental measures’ such as maintaining permanent pasture and practicing crop rotation including leaving fields fallow for ecological reasons. Any farmer who cared remotely about the future of his or her land would be doing this kind of thing anyway but, as the saying goes, one should never look a gift horse in the mouth.

Third, a scheme to pay farmers in areas where farming is economically unviable because it is too cold, to high or to dry.

Fourth, a scheme to pay certain farmers for producing certain crops or raising certain animals, where there is a risk that if the government were not paying them to do so, they they might chose not to.

Fifth, a scheme to pay small farmers.

The Commission also proposes a plethora of ‘rural development’ payment measures aimed at helping improve the profitability of farm businesses and paying farmers to improve the landscape and protect wild species of plants, insects and animals and ‘risk management toolkit’ to pay farmers when their incomes go down due to the variability of commodity prices.

The Commission introduces an important new caveat: only ‘active farmers’ should be paid by the EU. Presumably this rules out all the farm subsidy payments the EU has previously made to airlines, railway companies, golf clubs, prisons, accordion societies, dead people and children. Perhaps more controversially, it may also rule out payments to ‘sofa farmers’ – large landowners who rent out their land to farmers but keep the subsidies for themselves. Nothing is said about how to decide who is an ‘active farmer’ but I like to imagine that DG Agri is already working with the Court of Auditors on a ‘fingernail test’. This is likely to go down very badly with the Duchess of Alba and Prince Hans Adam II of Liechtenstein, both of whom receive seven-figure CAP payments each year and like to keep their hands soil free while handling such substantial amounts of public money.

In addition to payments to farmers, the Commission would like to reserve its right to buy up commodities to keep them in storage or send them overseas, as a way of keeping prices at levels that it regards as ‘fair’.

The Commission’s blueprint doesn’t include a price tag, or any indication of how the CAP budget should be divided among the various schemes and measures, nor how much each member state will get as a result. These questions are thought to be somewhat controversial and the Commission has decided the less said the better.