In a smart move, the Ministry proposes to keep the current €10 billion CAP budget for France – thus making the proposals more appealing to its domestic audience – and it uses the budget issue as a stick/carrot: a large budget can only be justified for a green CAP.
The money is allocated to several instruments (doing away with the traditional two-pillar structure):
* €3 billion for direct income support, available to all farmers in the EU at an equal level, without any historic base. National governments could have the possibility to top up these payments. A flexible component could be introduced to soften fluctuation in prices and regional yields. The eco-conditionality (respect of good agricultural and environmental conditions) shall be tightened.
* €4 billion for environmental services, notably the protection of the climate, biodiversity and water. One part of these payments is available to all preferable farming systems (organic, high nature value, leguminous plants, foraging, low input). Another part is limited to special areas (less advantaged areas, Natura 2000 etc).
* €2 billion to boost the transition towards more sustainable farming. This covers the conversion to preferable farming systems, green investments, innovation and collective responses to local challenges.
* €0.5 billion for food policy. The objective is to promote high-quality, responsible and local consumption through labeling, consumer education, food stamps and investments, for instance in local markets.
* €0.5 billion for security nets and market intervention. Interestingly, the Ministry warns against blanket subsidies for insurances as this can push farmers towards high-risk, high-intensity farming. Only insurances that reward sound environment stewardship should be subsidized.
The Ministry also recalls the polluter pays principle and proposes to consider taxes on the harmful aspects of farming.
There are some elements that raise concern. One is the continuation of fully EU-financed direct payments. However, the proposed drastic cuts to the direct payments combined with stricter eco-conditionality make this tolerable. Another problematic point is the idea to move away from co-financing of agri-environmental measures towards full EU-financing. Furthermore, one phrase about renewed Community preferences (reduced market access for foreign farmers in French parlance) may raise concern (though it may also be discarded as conforming to French political correctness).
The actual proposals are incompatible with French claims to €10 billion: an EU flat-rate income support would bind most CAP money in member states that currently have low CAP entitlements, leaving little for the environmental objectives. And it would be difficult to justify why environmental payments in France – fully EU-financed as they supposedly serve European public goods – grossly exceed payments in other member states.
Despite some minor flaws and tactical compromises, this is a great document. It is amazingly out of line with the position established by the French Ministry of agriculture and espoused in the Franco-German position paper. Let us hope that other ministries of the environment have the same guts! Why not a Franco-German paper for a green CAP? Or even a joint declaration by 27 ministries of the environment?
The position paper can be downloaded in French here.
Let’s have a look at the maths behind the French proposal. If the €3 billion for income support are distributed evenly across the 850,000 annual work units in French agriculture, every full-time farmer gets about €3,500. To pay the same amount to farmers in Poland or Rumania, both with about 2,2 million annual work units, €7,7 billion would be needed in each of these countries for income support alone. Evidently, such a mechanism is not viable – nor in the French interest.