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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The CAP in the 2021 budget negotiations

The Council Presidency, European Parliament negotiators and the Commission have had several trilateral meetings during August and September to try to reach agreement on the seven-year Multi-annual Financial Framework (MFF) following the European Council conclusions in July. The aim is to reach agreement by the end of October, but according to the Parliament’s negotiators, these discussions are not going well. The Parliament is pointing to the safety net procedure in the Treaty which, in the event of no agreement, provides for a contingency plan which would allow sectoral programmes to start functioning on 1 January 2021 on the basis of the 2020 amounts.

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Hogan addresses COMAGRI on environmental ambition in CAP

Commissioner Phil Hogan gave a presentation last week (Jan 24th) on the proposed environmental and climate architecture in the Commission’s legal proposal for the CAP post 2020 to the AGRI Committee of the European Parliament (the video session can be reviewed here). Today Monday (Jan 28th) the Commissioner gives a similar presentation to the AGRIFISH Council.

There are of course technical issues to be clarified around the Commission’s proposals. How will the proposed eco-schemes in Pillar 1 relate to agri-environment-climate measures (AECMs) in Pillar 2? How will Member States’ level of environmental and climate ambition in their CAP Strategic Plans be evaluated, and how will the level of effort across Member States be compared by the Commission when it approves these Plans?

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Update on the budgetary framework for the CAP post 2020 negotiations

As with the 2013 reform, the legislative process for the Commission’s CAP post 2020 proposal runs parallel to the discussions on its Multi-annual Financial Framework (MFF) proposal. This parallel process creates three complications for the CAP post 2020 negotiations.

The first is that the timing of the agreement on the MFF influences the timeline for concluding the CAP negotiations (let us call this the sequencing issue).

The second is that the size of the CAP budget is not known when the details of the CAP legislation are being negotiated (I refer to this as the budget issue). Uncertainty over the budget may bias the negotiations towards a more conservative CAP, in the sense of one with a lower level of environmental and climate ambition.

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The Article 92 commitment to increased ambition with regard to environmental- and climate-related objectives

Article 92 of the draft CAP Strategic Plan regulation is headed “Increased ambition with regard to environmental- and climate-related objectives”. In my previous discussion of the proposed green architecture in the CAP post 2020, I interpreted this Article as a commitment to no back-sliding on expenditure on agri-environment and climate objectives in the new CAP. For this reason, I took a more positive view of the potential of the new legislation to live up to the Commission’s declared ambition in this area than reflected in initial statements from environmental NGOs.

In the wake of further conversations with Birdlife Europe who have had the benefit of discussions with DG AGRI officials, I conclude that my initial interpretation of Article 92 as guaranteeing no back-sliding in expenditure was incorrect.

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By how much is the CAP budget cut in the Commission’s MFF proposals?

Unlike in its presentation of its proposal for the current MFF in 2011, the Commission on this occasion in presenting its proposal for the 2021-2027 MFF did not provide comparative details on ceilings in the last year of the earlier MFF.

There are some understandable reasons for this. The next MFF is designed for 27 Member States without the UK, and so is not directly comparable with the current MFF. Also, the Commission has proposed a different and more simplified structure for the MFF which makes direct comparison difficult.

Nonetheless, in the absence of a column showing 2020 ceilings for the various MFF headings, it is not straightforward to try to work out whether the 2021-2027 figures represent an increase or decrease in proposed commitments and by how much.

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The UK must pay for access to the single market

The British Foreign Secretary Boris Johnson revealed his four ‘red lines’ in the Brexit negotiations in an interview in The Sun newspaper recently. They include:

1. The transition period post-Brexit must be a maximum of 2 years and not a second more
2. UK must refuse to accept new EU or European Court of Justice rulings during transition
3. No payments for single market access when transition ends
4. UK must not agree to shadow EU rules to gain access to market.

On the budget payments issue, Johnson explained: “What I have always said is that we will pay for things that are reasonable, scientific programmes.

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The budgetary context for the CAP after 2020

Last week I attended the XVth Congress of the European Association of Agricultural Economists which was held in Parma, Italy. With almost 600 contributed papers, poster papers, organised sessions and panels, it was a feast both of stimulating ideas and great food. Over the next few weeks, I hope to highlight a few of the papers which were of interest to me. In this post, I take the opportunity to refer to my own contribution to an organised session on the economics and politics of the CAP after 2020.
This panel discussion also included contributions from Tassos Haniotis (DG AGRI), Jean-Christophe Bureau (AgriParisTech) and Johan Swinnen (University of Leuven).
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Impact of Brexit on the EU budget

In a post last month, I made some estimates of the likely impact of Brexit on the CAP budget and which member states would have to stump up if overall CAP spending were to be maintained following a UK exit from the EU. These estimates were based on particular assumptions about how to calculate member states’ notional contributions to the CAP budget and how to calculate the CAP share of the overall UK rebate.

Of course, Brexit would have budgetary consequences not only for the CAP but for the UK net balance of contributions to all EU policies and for the overall EU budget.

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Impact of Brexit on CAP budget net balances for remaining Member States

Much of the recent discussion on agricultural matters in the fall-out from the UK referendum vote on Brexit in June has focused on the implications for UK agriculture. What agricultural policy will the UK pursue after Brexit? What type of trade relationship will it have with the EU and with other countries? What arrangements might be put in place for seasonal migrant workers who play an important role in the production of certain UK crops?

However, Brexit will also have implications for the agricultural policy of the EU. I previously explored these implications in general terms in this Eurochoices article.

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