Evaluating the legislative basis for the new CAP Strategic Plans

The main novelty in the Commission’s legislative proposals for the CAP after 2020 is the New Delivery Model (NDM) which has been described by Commissioner Hogan as representing a shift from a compliance-based to a performance-based or results-based governance system for the CAP.

As set out in a recital to the CAP legislation: “In the CAP based on delivery of performance (‘delivery model’), the Union should set the basic policy parameters, such as objectives of the CAP and basic requirements, while Member States should bear greater responsibility as to how they meet the objectives and achieve targets. Enhanced subsidiarity makes it possible to better take into account local conditions and needs, tailoring the support to maximise the contribution to Union objectives.”

The key instrument designed to underpin the NDM will be the requirement for each Member State to draw up a Strategic Plan setting out its assessment of needs, the specific CAP objectives it intends to address, its intervention strategy including the targets it intends to achieve with respect to these objectives, and the interventions it plans to use. The rules for these Strategic Plans are set out in Title V of the Commission’s draft Regulation establishing rules on support for strategic plans to be drawn up by Member States under the Common Agricultural Policy (CAP Strategic Plans).

Whether these rules are adequate to ensure that the Commission’s declared objectives for the CAP post 2020 can be realised or not has just been thoroughly examined in a study by Professor Emil Erjavec and his colleagues from the University of Ljubljana in Slovenia commissioned by the Policy Department for Structural and Cohesion Policies of the European Parliament (this builds on a previous post on this blog by Professor Erjavec). The purpose of the study is to assist the COMAGRI rapporteurs and members in drawing up their reports on the Commission’s legislative proposals.

In this post, I review the suggested rules in the draft Regulation and outline seven suggestions in the Erjavec at al. paper on how they could be improved.

CAP Strategic Plan

The rules cover the four main elements for Strategic Plans: the procedural requirements for drawing up the Plans, the content of the Plans, the method for their approval, and their performance monitoring.

Procedural requirements (Art 94)

Member States should use transparent procedures when preparing their Strategic Plans. The competent regional and local authorities, including relevant public authorities, economic and social partners, and relevant bodies representing civil society, should be involved in the preparation of the plan. Specifically, the competent authorities for environment and climate should be effectively involved in the preparation of the environmental and climate aspects of the plan.

Elements making up the Strategic Plans (Art 95-103)

An explicit structure for the Strategic Plans is proposed containing the following sections.

(a) an assessment of needs. The Plan should include an identification and description of needs for all nine specific objectives set out in Article 6 of the draft Regulation regardless whether they will be addressed in the CAP Strategic Plan or not (a summary of these nine specific objectives taken from the Erjavec et al. study is shown in Table 1). Needs in relation to risk management in connection with the specific objective of support for viable farm incomes and resilience should be specifically described. These needs should then be ranked and prioritised and a sound justification of the choices made should be given, including why certain identified needs might not be addressed or only partially addressed in the Strategic Plans. (In passing, while this suggests that Member States may decide not to pursue one or more of the specific objectives shown in Table 1 if they can provide appropriate justification, in practice the mandatory nature of the agri-environment-climate interventions and the existence of the performance bonus (see below) makes the inclusion of the related specific objectives for the general environment and climate objective also mandatory).

(b) an intervention strategy. This section should set out quantitative targets and milestones to achieve each specific objective set out in Table 1 that is addressed in the Strategic Plan (not all objectives need to be addressed if the omissions are justified, as noted in previous paragraph). Targets should be defined using a common set of result indicators set out in an Annex to the draft Regulation. The value of the targets should be justified by reference to the needs assessment.

The intervention strategy should also set out the interventions proposed to reach these targets drawn from the menu set out in the Regulation. It should describe how the interventions allow reaching the targets and how they are mutually coherent and compatible.

Additional specific requirements include (i) an overview of the environmental and climate architecture showing the complementarity and coherence between the proposed conditionality attached to receipt of farm payments, the eco-scheme in Pillar 1 and the AECM measures in Pillar 2 and how this architecture contributes to meeting long-term national targets set out in relevant environmental legislation; (ii) in relation to the specific objective ‘attract young farmers and facilitate their business development’ the overall package of measures included in the Plan should be described, including their interplay with relevant national instruments; (iii) where coupled supports and other sector-related interventions are included in the Plan, the justification for targeting the sectors concerned, the list of interventions per sector, their complementarity, as well as the possible specific additional targets related to the interventions should be described; as well as (iv) an explanation as to which interventions will contribute to ensure a coherent and integrated approach to risk management.

(c) a description of elements common to several interventions. This is a catch-all heading that refers to a few disparate requirements. The most important is a description of the system of conditionality, including a detailed account of how each GAEC standard in the Regulation will be implemented and, specifically, how it will contribute to the environmental and climate specific objectives set out in Article 6 (see Table 1). Member States should also include information on the specific definitions they have adopted for some of the terms in the Regulation that are left up to Member States (for example, the definitions of agricultural activity, agricultural area, eligible area, genuine farmer, small farm and young farmer); on the use made of technical assistance; on the functioning of payment entitlements where the Member State opts to continue their use; on the uses made of revenues raised by capping and degressivity; as well as an overview of the coordination, demarcation and complementarities between the EAFRD and other Union funds active in rural areas.

(d) a description of the direct payments, sectoral and rural development interventions specified in the strategy. This should include an account of the design of the intervention and its eligibility conditions, the annual planned outputs for the intervention, the annual planned unit amount of support and its justification; and the resulting annual financial allocation for the intervention. Member States should also show how the intervention relates to the criteria for determining whether measures are trade-distorting or not in the WTO Agreement on Agriculture, and whether the intervention falls outside the scope of Article 42 TFEU and is subject to State aid assessment.

(e) target and financial plans. These should build on the annual financial allocations per intervention set out in (d) as well as detail transfers between Pillars and confirm that any minimum spending requirements set down in the Regulation have been met.

(f) a description of the governance and coordination system. The most important element here is information on the control system and penalties including the integrated administration and control system and the control and penalty system for conditionality. The monitoring and reporting structure should also be described.

(g) a description of the elements that ensure modernisation of the CAP. This covers two specific obligations; an overview how the Strategic Plan will contribute to the fostering and sharing of knowledge, innovation and digitalisation and encourage their uptake, including a description of the AKIS organisational set-up and how advice and innovation services are provided; and a description of the strategy for the development of digital technologies in agriculture and rural areas and for the use of these technologies to improve the effectiveness and efficiency of the CAP Strategic Plan interventions.

(h) a description of the elements related to simplification and reduced administrative burden for final beneficiaries. In addition, each CAP Strategic Plan should contain the following annexes:
(a) Annex I on the ex-ante evaluation and the strategic environmental assessment (SEA);
(b) Annex II on the SWOT analysis;
(c) Annex III on the consultation of the partners;
(d) Annex IV on the crop-specific payment for cotton;
(e) Annex V on the additional national financing provided within the scope of the CAP Strategic Plan.

Approval procedure (Art 106-108)

Member States are required to submit their Strategic Plans no later than 1 January 2020, although there is some ambiguity in the text whether this date is intended to be in square brackets or not (indicating that it is subject to further negotiation). The specific conditions for approval of the Strategic Plans are worth citing in full:

“The Commission shall assess the proposed CAP Strategic Plans on the basis of the completeness of the plans, the consistency and coherence with the general principles of Union law, with this Regulation and the provisions adopted pursuant to it and with the Horizontal Regulation, their effective contribution to the specific objectives set out in Article 6(1), the impact on the proper functioning of the internal market and distortion of competition, the level of administrative burden on beneficiaries and administration. The assessment shall address, in particular, the adequacy of the strategy of the CAP Strategic Plan, the corresponding specific objectives, targets, interventions and the allocation of budgetary resources to meet the specific CAP Strategic Plan objectives through the proposed set of interventions on the basis of the SWOT analysis and the ex-ante evaluation.”

Annexes 1-4 as well as the Member State plans for controls and penalties are explicitly excluded from the approval process. The Commission can address observations to the Member State within three months of receiving the Plan, and the Member State is required to provide any additional information requested and, if necessary, to revise the proposed Plan. It is further specified that approval should not take longer than eight months after submission of a Plan (but this time limit excludes any time required for a Member State to respond to Commission observations). Partial approval of elements of the Plan is also permitted. Member States can amend their Plans at any stage by following the prescribed procedure.

Performance monitoring (Art 115-124)

The draft Regulation specifies a performance framework consisting of a set of common context, output, result and impact indicators that will be used as the basis for monitoring, evaluation and annual performance reporting. Targets and annual milestones will be based on output and result indicators and progress will be reported in an annual performance report.

Mechanisms to reward good performance and to address low performance are proposed. Where the reported value of one or more result indicators deviates by more than 25% from the respective milestone for the reporting year concerned, the Commission can ask the Member State to submit an action plan with intended remedial actions and a timeframe. The performance bonus (actually a performance penalty) will be implemented by withholding in 2016 5% of each Member State’s pre-allocated Pillar 2 funding in 2017. This amount will be released to the Member State if the result indicators applied to the three specific environmental- and climate-related objectives in its CAP Strategic Plan have achieved at least 90% of their target value for the year 2025.

Recommendations of the European Parliament study by Erjavec et al. (2018)

The Erjavec et al. study welcomes in principle the shift to the NDM, pointing out that it is line with the principles of evidence-based policy making. It sees the greatest opportunity arising from the proposed approach in greater flexibility for Member States and efficiency for the EU. Risks are associated with the administrative burden of planning for Member States and lowering standards or ‘race to the bottom’ for the EU.

It suggests that the proposed new model of policy delivery draws on the established model of Rural Development programming and essentially the same governance system, and thus contains all the shortcomings of the current system. The study doubts that the proposed arrangements will lead to a genuine results-based policy. It sees limited incentives for Member States to make efforts for better policies, and highlights an “accountability gap” and a “systemic weakness in the intervention logic” in the new delivery model. It is too easy for Member States to draw up Strategic Plans that are mainly designed to minimise the hassle associated with the absorption and distribution of funds.

I distil seven main recommendations in the study designed to encourage and strengthen the results-based approach advocated by the Commission in its legislative proposal.

Make the specific objectives in the legislative proposal more concrete by setting quantified goals, drawing on related EU legislation where appropriate. The study accepts that, for CAP measures to contribute to the achievement of its specific objectives, these objectives should be sufficiently concrete and measurable so that quantified, measurable milestones and targets can then be established in Member States’ CAP plans and subsequently monitored. It notes that “The CAP policy objectives are relatively clear, what is missing is only their quantification”. Most of the discussion on quantified indicators at the EU level refers to the environmental and climate objectives. The study underlines that the need for quantification applies to all nine specific objectives. It recognises that for some of the other objectives, notably farm viability and resilience, the process of quantification could lead to considerable political and economic tensions.

Strengthen the commitment to greater environmental and climate ambition. An important foundation for the greater level of environmental and climate ambition desired by the Commission for the CAP post 2020 is set out in Article 92, which sets out that there should be no backsliding with regard to environmental and climate-related objectives in the current period (I have previously discussed Article 92 in this post):

“Member States shall aim to make, through their CAP Strategic Plans and in particular through the elements of the intervention … a greater overall contribution to the achievement of the specific environmental- and climate-related objectives … in comparison to the overall contribution made to the achievement of the objective … in the period 2014 to 2020.”

The study points out that implementing this commitment depends on the evaluation of the current state and goals and fails to instruct on how to define the situation and goals. It suggests strengthening the principle of ‘no backsliding’ with the requirement to maintain at least the absolute and relative share of support for climate and environmental objectives.

Improve accountability through a more comprehensive reporting system. As noted previously, the performance framework will require Member States to report only on output and result indicators in their annual performance reports. This study suggests this should be expanded to also include changes in the impact and contextual indicators. Specifically, better quantification of CAP objectives and indicators at the EU level could drive the monitoring of these objectives at the national level. Here the study raises but leaves open the question of how the EU-level objectives can be transmitted to Member States. It suggests it could be helpful to draw on independent quantitative and qualitative public assessment of experts and groups at the EU and national level.

Strengthen rules to ensure genuine consultation in Plan preparation.
The study notes the current experiences with Rural Development programming, where the level of stakeholder consultation and engagement vary significantly from one country to another – even if the rules are common and fall under the European Code of Conduct on Partnership. In the future, the CAP Strategic Plans will no longer fall under this Code set out in the Common Provisions Regulation. The study concludes that it will be even more important that a strong framework on partnership and common rules be inserted into the CAP proposals. As it stands, while there is a requirement for Member States to consult adequately with “relevant” stakeholders, the annex on consultation will not be part of the approval process of the Plans.

The study recommends strengthening the stakeholder consultation process with more binding requirements concerning the composition of parties involved in the process, joint decision-making, monitoring and evaluation. These requirements could be drafted in line with the provisions put in place in cohesion policy and using the European Code of Conduct on Partnership as a basis. The objective should be to ensure that stakeholders’ opinions at national level are seriously taken into account.

Formalise more the approval process for Strategic Plans. The procedure related to the approval of the Strategic Plans is practically the only mechanism in the Commission’s power to ensure targeted and ambitious strategic planning. The study underlines the importance of ensuring that the Commission is empowered to make a proper qualitative assessment of the Strategic Plans. Here it proposes that the adoption procedure should be more formalised, with stakeholders’ opinions at national level taken into account. It believes this would improve the quality of the design as well as the legitimacy of the documents.

Make substantial investment in personnel, processes and analytical support for the preparation of Strategic Plans. The study underlines in various places the dramatic culture shift that the introduction of strategic planning will imply for those involved. While superficially there are similarities to the process used in drawing up Rural Development Programmes at present, the study suggests that the latter is more of a technical activity than a substantive, political task. To be implemented effectively, the strategic planning approach “demands competent human resources (e.g. strategic workgroups), effective coordination and organisation of the process, a well-established culture of democratic dialogue and learning that involves a broad spectrum of stakeholders, as well as sufficient external analytical and expert support”.

“Strategic planning is supposed to be a creative, intellectual and democratic endeavour, which requires excellent staff and a comprehensive approach. Will civil servants in Member States be up to the challenge? How to build a newly required culture of action and cooperation? In truth, probably in most Member States, civil servants are not sufficiently trained for quality strategic planning. Deficiencies also arise from the weak position of agricultural officials in society, inappropriate and narrow education, lack of training and practical experience, poor quality of management and politicized state administrations.”

The study notes that, for several Member States, the transition towards a strategically oriented and performance-based agricultural policy will prove to be a daunting task that will require increased efforts in terms of substantially upgrading strategic, analytical and administrative capacities, procedures and methods of work. Without serious investment in personnel, processes, analytical support and inclusive preparation of Strategic Plans, there may be considerable differences in policy implementation between individual countries.

The study emphasises the need for capacity building, and improvement of training and knowledge exchange in support of strategic planning. Among other suggestions, the study recommends establishing a common platform with open access to all Strategic Plans, progress and evaluation reports to assist in the process of mutual learning.

Make greater investment in data collection to support the results-based approach. The study underlines the importance of strengthening the data sources related to needs analyses, as well as making available appropriate data that will be employed as indicators for identifying and monitoring objectives. It sees the need for an upgraded system of data collection and data management in support of strategic planning. Both Member States and EU bodies (JRC, EEA, Eurostat) have a role to play here. The study proposes an enlarged technical assistance budget could be used to improve the depth and quality of data collection.

Additional issues

These recommendations are relevant and worth supporting. There are several other issues around the Strategic Plan instrument that would be worth exploring in more depth.

What role should the Parliament have? COMAGRI has raised concerns that the NDM implemented through the Strategic Plans reduces the role of the Parliament in the definition of the CAP and could even make the AGRI Committee of the Parliament redundant. AgraFocus (72-18) reported that the Committee in September had sought the advice of the Parliament’s legal services comparing the powers the Parliament currently has with those it would have under the Commission’s proposal, but I am not aware that this legal advice has been made public. It is not clear exactly where the Committee’s concerns arise, but one might speculate that the reversion of significant powers to Member States to define how the CAP is implemented in their countries could remove these decisions from the remit of the Parliament’s scrutiny.

The draft Regulation envisages a limited oversight role for the Parliament in the CAP after 2020. The Commission would carry out an interim evaluation by the end of the third year after the start of the CAP Strategic Plans based on the impact, result and output indicators set out in the Annex to the draft Regulation. An initial report based on first results of implementing the new CAP would then be forwarded to the Parliament and Council after this interim evaluation. A second report including an assessment of the performance of the CAP shall be presented by 31 December 2031. All in all, this does not suggest that COMAGRI will have a particularly busy agenda in the coming parliamentary period.

Handling disagreement in the approval process. The study rightly highlights the crucial role of the approval process in ensuring that Member States deliver on the CAP’s EU objectives in their Strategic Plans. Compared to the current process for the approval of Rural Development Programmes, the approval of Strategic Plans will potentially be a more political process under a results-based strategic planning model. The Commission will not just be checking that the Plans comply with various requirements set out in legislation but will be required to evaluate whether the Plans make a sufficient contribution to meeting EU objectives.

The Plans will arrive on the Commission’s desk with considerable legitimacy behind them (an ex ante evaluation, a SWOT analysis, a stakeholder consultation process). It will take a brave desk officer to challenge the country’s priorities and choice of intervention strategy. But suppose the Commission does send observations that the Member State refuses to accept, and perhaps there are good grounds for this refusal. In this situation, the Commission can withhold its approval and thus delay the transfer of funds to the Member State. What procedures for arbitration will exist in cases where the two parties cannot reach agreement?

Changing the audit culture. An under-researched topic to date in the evaluation of the NDM is the role that the EU audit process will play. This process has come in for heavy criticism in recent years for its allegedly heavy-handed controls and its dampening effect on innovation (for a well-documented cri de coeur, see this submission from Freistaat Sachsen on how the audit process should be retooled in the CAP after 2020). The Parliament’s Budget Committee has also raised concerns that financial and performance control and audit functions of the CAP are performed to the same standard and under the same criteria across all Member States under the NDM. The mechanisms to ensure this in the draft legislation are not clear. Exactly the role that the EU audit function will play in the new results-driven model deserves much greater examination.

Where is the simplification? Simplification along with modernisation are the two over-arching objectives of the Commission’s CAP proposals. But initial reactions from Member States and farm groups suggest that many do not regard the proposals as a real simplification. Indeed, it should be recognised that strategic planning will result in a substantially greater administrative burden at the Member State level. The Commission proposals envisage considerable simplification at the beneficiary level (in part because Member States will now be able to design rules more appropriate to their farming circumstances, and in part through using new technologies to minimise the inputs required from farmers). Member States will be required to spell out, in one section of their Strategic Plans, the extent of this simplification at the level of beneficiaries. No doubt the Commission in its roadshow around the Member States to begin the process of strategic planning has identified ways in which the NDM also has advantages for the paying agencies and Member State administrations.

Maintaining a level playing field. One of the big concerns voiced by farm groups is that greater subsidiarity for Member States to design their own agricultural policies could lead to strong differences in the regulatory frameworks in different Member States (in the definition of conditionality standards and in the mix of support interventions that are employed). These groups fear that this ‘renationalisation of the CAP’ could lead to the fragmentation of the internal market and disrupt the level playing field for farmers in different Member States.

The significance of this objection is greatly overstated. Those groups who raise this objection against the NDM are usually the greatest proponents of the most trade-distorting CAP instrument, namely, coupled payments at the Member State level. The CAP has never been entirely uniform for a least a decade, with strong differences in the levels of direct payments per hectare and different payment models, and the single market has survived. More important, the conditions attached to the ‘licence to farm’ in Member States, in terms of regulation and taxation policies, remain very different.

Nonetheless, concerns over the disruption of the level playing field cannot be entirely dismissed. The single market is one of the greatest achievements of the European Union and should not be arbitrarily undermined. The Commission has recognised the issue and has stated that the level playing field will be ensured by using the Commission’s power to approve individual Strategic Plans “to ensure consistency and protection of the single market”. This has also been the position taken by Commissioner Hogan. But how the potential contradiction between giving Member States the power to design a results-based agricultural strategy while minimising different regulatory and support regimes across the EU can be avoided or minimised needs to be more clearly set out.


The Erjavec et al. study is the first systematic attempt to review and evaluate and suggest improvements to the Strategic Plan instrument which will be the centrepiece of the NDM in the CAP post 2020. It makes a valuable contribution and its recommendations must be seriously considered by the co-legislature when adopting the new legislation.

One of the main messages of the study is that the period 2021-2027 should be seen as a ‘deployment’ period for CAP strategic planning where no major adjustment of the measures nor particularly improved results can be expected.

The range of changes is so profound that a more long-term view should be taken, stressing the importance of collective learning and system building, to be able to implement better in the future.

Indeed, the Commission’s timetable for drawing up these Plans is ridiculously tight. According to the date in the draft legislation, Plans should be submitted to the Commission for approval by 1 January 2020, less than 15 months away.

During this period, Member States are expected to conduct a SWOT analysis, a multi-stakeholder consultation exercise, prepare a draft Strategic Plan, conduct an ex ante evaluation on this draft, revise the Plan and then submit it to Brussels.

And all this while the draft legislation itself has not yet been approved!

Given the magnitude of the changes implied by the NDM and the need to get it right (bearing in mind the difficulties around introducing greening without full analysis and piloting of the proposals) it is hard to defend this rushed timetable, however much we see a need for CAP reform. However, the Commission is unlikely to shift its position until it becomes clearer that the timetable for adopting the new CAP legislation prior to the European Parliament elections in May 2019 itself cannot be met.

The Erjavec et al. study on the CAP Strategic Plans is one of three studies commissioned by the Parliament that will be presented at a COMAGRI workshop on 15 October next “The Common Agricultural Policy beyond 2020: appraisal of the EC legislative proposals” (draft programme here). The other two studies are by Roel Jongeneel on assessing the future structure of direct payments and the rural development interventions in the light of the EU agricultural and environmental challenges and by Tomas Garcia Azcárate on possible options to improve the EU food value chain.

This post was written by Alan Matthews

Photo credit: Near Montpellier, own photo.

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