Designing CAP Strategic Plans to maximise environmental and climate potential

Those seeking to influence the design of the CAP post 2020 should understand the process of designing Strategic Plans, and the opportunities and constraints inherent in this process. In a recent working paper, I try to explain how Strategic Plans will be constructed and the key entry points for those seeking to improve the environmental and climate ambition of these Plans. The paper is written from a development perspective but the messages have a more general relevance.

The paper does not discuss how the CAP legislation itself might be improved from an environmental or development perspective. The Parliament’s Committee on Development and Environment Committee have submitted their Opinions to the agriculture committee with a range of suggestions in this regard (the latter still only available in Italian), although few were taken on board in the AGRI Committee voting .

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COMAGRI lacks full transparency in crucial votes

Th AGRI Committee voted its Opinion on amendments to the CMO Regulation on Monday 1 April, its Opinion on the Strategic Plan Regulation on 2 April and will vote its Opinion on the Horizontal Regulation on financing, management and monitoring of the CAP today 8 April. I plan to comment on the substantive outcome of these votes in the coming days. In this post I want to comment on a procedural aspect of these votes that I find does not live up to the norms of acceptable practice and which makes it impossible for anyone not in the inner circle to follow the voting on these Opinions.

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AGRIFISH Council on CAP reform negotiations in mid-March

The AGRIFISH Council and the AGRI Committee of the European Parliament both held meetings to discuss their respective positions on the Commission’s proposed CAP regulations for the period post 2020 on Monday March 18th last. These meetings provided an opportunity to assess the progress made in each body to agree their initial positions as well as giving some insights into the changes that might be proposed. The AGRIFISH Council meeting was more informative in this respect. The AGRI Committee debate lacked focus because no formal positions were presented at its meeting and we must wait until its April meetings to see the compromise amendments it will decide.

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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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How to improve the CAP’s environmental performance post 2020

We are pleased to welcome this guest post by Faustine Bas-Defossez, IEEP Head of agriculture and land management program, and Kaley Hart, IEEP Senior fellow, who summarise the findings of a recent IEEP report CAP 2021-27: Proposals for increasing its environmental and climate ambition.

Although the CAP is the key EU funding mechanism to support environmental and climate action in the EU agricultural and forest sectors, efforts so far to green this strategic policy have not been sufficient to outweigh the pressures facing the farmed environment. As the EU just published its long term strategy for a climate neutral economy, emissions of greenhouse gasses from agriculture, including the livestock sector, are stubbornly high.

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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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State aid rules and the CAP 2020 legislation

State aid rules play an important role in the management of the single market. State aid is defined as any advantage granted by public authorities through state resources on a selective basis to any organisations that could potentially distort competition and trade in the EU. Unless otherwise permitted, State aid is viewed as incompatible with the single market and is prohibited. However, the Treaty leaves room for the granting of State aid in respect of several policy objectives, considering the possibility of market failures and the need for a well-functioning and equitable economy. For example, of relevance to the agricultural sector and forestry, the Treaty considers aid to make good the damage caused by natural disasters or exceptional occurrences as compatible with the single market.

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Market and trade effects of the next CAP reform

It is not possible to be definitive about the market and trade effects of the next CAP reform, for two reasons. One is that the Commission’s legislative proposal published in June 2018 is just that, a proposal, that may well be altered, even quite radically, before the new CAP regulations are agreed. The other is that, under the Commission’s proposal, Member States are given significantly more flexibility than they have at present to craft their own agricultural policy interventions in the context of their CAP Strategic Plans. Until these Plans are approved, it is not possible to predict, inter alia, the level of environmental and climate ambition that EU farmers will be asked to meet after 2020, the extent of targeting and redistribution of Pillar 1 direct payments, or the use that will be made of coupled payments.

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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.

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The redistributive payment is more effective at redistribution

Capping of direct payments is not the only instrument proposed by the Commission to allocate more support to small and medium-sized farms. In addition to a mandatory ‘basic income support for sustainability’, the Commission CAP proposal would also require Member States to introduce a ‘complementary redistributive income support for sustainability’. This redistributive payment is currently voluntary under the 2014-2020 CAP.

Under the current CAP, the redistributive payment is applied by 9 Member States: BE-Wallonia, BG, DE, FR, HR, LT, PL, RO and UK-Wales. The financial allocation to the scheme takes up from 0.5% to 15% of the Member States national ceiling for direct payments.

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