I have previously written about the provisions for voluntary coupled support (VCS) in the 2013 CAP reform package in this blog post in 2015 entitled “Two steps forward, one step back: coupled payments in the CAP”. That post gives a historical overview of the gradual phasing out of coupled payments during the 2000s and the reversal of this process in the 2013 reform. In the recently-agreed Omnibus Agricultural Provisions Regulation (EU) 2017/2393, a significant relaxation of the conditions that Member States must meet in gaining approval for their VCS schemes was introduced. The negotiating history of this amendment is particularly opaque and sheds an interesting light on the secrecy and non-transparency of the trilogue process in which the Council and European Parliament, as co-legislators, try to reach agreement on legislative proposals.
This post reproduces my key-note statement to the session More efficient use of scarce financial resources – An efficient Common Agriculture Policy and focussed structural Funds at the European Political Strategy Centre High Level Conference ‘Shaping our Future: Designing the next Multiannual Financial Framework’ which was held 8-9 January 2018 in Brussels. The delivered version was slightly abbreviated for time reasons.
The session was intended to reflect on more efficient use of scarce financial resources in the EU budget’s two largest spending categories – agricultural policy and structural funds. I expected my fellow panellists to have a lot to say about structural funds, so my presentation focused on agricultural policy.
The extent and nature of the risk management tools that should be offered to EU farmers is one of the main issues which will be debated in the context of the future CAP after 2020. Already, in the COMAGRI amendments to the Omnibus Regulation, we see the interest of parliamentarians to extend the risk management toolkit and to make it more attractive for farmers to use.
The COMAGRI amendments seek to allow Member States to use CAP funds to contribute to insurance premiums for market-related hazards (that is, price variability) and revenue variations as well as just production variations due to adverse climatic events, diseases, pest or an environmental incident as at present; to provide for sector-specific income stabilisation tools so that farmers could enrol in schemes for a specific production and not necessarily for whole farm income; and would allow indemnification payments to farmers whenever the production loss (or income loss in the case of mutual funds operating an income stabilisation tool) exceeds 20% rather than the 30% in the existing legislation.
The evolution of the Common Agricultural Policy shows an increasing emphasis on environmental objectives since their first appearance in the Maastricht treaty in 1992. The research presented here was stimulated by an important contradiction in public discourse.
This picture of an industry in crisis is naturally promoted by the well-oiled publicity machine maintained by the farm lobbies in Brussels and national capitals.
These payments are variously justified as addressing low farm incomes, as a necessary support for EU food security, as providing a safety net for farmers against unexpected market shocks, as compensating for higher regulatory standards and as ensuring more sustainable management of natural resources.
Below, I reproduce a short summary of the key messages of the report.
Further adaptation of the CAP is necessary to help EU farming become a well-structured industry which is economically viable and environmentally sustainable.
We are pleased to publish this guest post by David Blandford (Penn State University) and Berkeley Hill (Imperial College London).
The President of the National Farmers Union (NFU) of England and Wales told the Food Manufacture Group’s Business Leaders’ Forum (Feb 14, 2017) that the NFU is currently actively lobbying the UK government to ensure that British farmers are not disadvantaged with respect to their main competitors in Europe following Brexit. The fear seems to be that cuts in the £3 billion of direct aid, which seem highly likely when Britain leaves the EU and its CAP, will result in a non-level playing field in which UK farmers are put at a competitive disadvantage.