Franco-German position on future of the CAP

This week the governments of France and Germany have published a short document setting out their common position on the future of the common agricultural policy. It makes for fairly light reading though the following points are worth remarking on:

– The common position endorses further moves towards greater market orientation in the CAP but suggests countervailing measures are needed “to buffer devastating effects of growing price volatility and market crises”.

– There is nothing concrete on the future budget of the CAP and it is stressed that “a final decision on all questions relating to finances will be made when decisions are made on all policies and the entire EU financial framework”.

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European Parliament weighs in on health check

On Monday 14 July the European Parliament agriculture committee will discuss its response to the Commission’s legislative proposals for the CAP health check. The committee’s rapporteur is Luis Capoulos Santos, a Portuguese socialist MEP and former Portuguese Minister for Agriculture. His working document, suggests a number of changes to the Commission proposals, notably a hard ceiling of 500,000 euros on CAP payments to individuals, in addition to a ‘progressive modulation’ that would see payments above 100,000 euros top-sliced to provide additional funding for the EU’s farmland conservation and rural policies.

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Goepel plan: weak, weak, weak

The European Parliament’s agriculture committee published a working paper on the CAP health check at the end of last year. Tamsin Cooper and Martin Farmer at IEEP have already argued that from an environmental perspective it lacks ambition and is internally inconsistent. I have looked in detail at the working paper’s proposals for ‘progressive modulation’ which is put forward as an alternative to both the Commission’s proposals on payment limits and increased compulsory modulation.

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European Parliament’s View of the Health Check Holds Little Promise for the Environment

The European Parliament is seeking an outcome to the CAP Health Check that does not compromise the competitiveness of EU farming or diminish the value of farm subsidy receipts. This is the vision presented in a working document drafted by German MEP Lutz Goepel of the Parliament’s Committee on Agriculture and Rural Development. The paper acknowledges the need for some evolution of the CAP, but presents a sometimes inconsistent set of suggestions, a number of which are likely to run counter to arguments in favour of promoting a more environmentally sustainable CAP. The paper is examined in further detail below.

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Specious arguments against limiting payments to largest farms

Initial media reaction to the Commission’s Health Check proposals has been predictable, with most papers picking up as the lead story the Commission’s proposal to apply a tapering reduction to direct payments to larger farms. The Financial Times story was headlined “Communists and royalty fight farm subsidy cuts.” Much was made of the fact that the Commission’s illustrative proposals would reduce the payments received by the Queen of England, who apparently received £465,000 (€650,000) in 2005, by over £140,000 (€192,000). British and German officials were quoted as saying they would oppose these reductions as they were unworkable and undesirable.

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The health check paper: Homeopathy rather than surgery?

The recently leaked Commission Green paper sets the scene for the upcoming health check. What emerges at the moment is a very cautious and minimalist approach, in line with what the Commissioner has been promising for a while. Two things seem striking. The first is the choice to ignore the budget review debate. The second is the lack of courage in confronting the CAP’s failings.

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Less likelihood of cuts in Single Farm Payment

The Irish Farmers’ Journal reports that the value of the Single Farm Payment (SFP) is not likely to be greatly eroded by “financial discipline” cuts in order to accommodate the payments to new Member States within the European Union. This is because more buoyant farm prices mean that there will be huge cuts in the cost of traditional market support measures, such as intervention and export subsidies, leaving sufficient money in the CAP budget to fund the SFP. Agra Europe forecasts that the cost of traditional support measures will fall by half by 2013, and that budget-related cuts in the SFP of no more than 2% will be necessary by 2013 to stay within the CAP budget ceiling.

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69 Ways to Reform the CAP

Analyses of the contents of the Commission’s Health Check Communication have heightened in recent days with the content of the leaked draft document reported in the agriculture press. Of particular interest from an environmental perspective, is the resurgence of the little applied Article 69. This article is housed within the current CAP legislation, Regulation 1782/2003, and allows a Member State to skim off up to ten per cent of the monies to be directed at one sector and provide an additional payment that is targeted at the ‘protection or enhancement of the environment’, or for ‘improving the quality and marketing of agricultural products’.

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Parliament throws out modulation plan

The European Parliament has thrown out a plan agreed at the 2005 summit of EU heads of government to allow the transfer of funds from Pillar 1 expenditure on farm subidies to Pillar 2 rural development to be increased up to a maximum of 20 per cent. Only the UK was planning to use the full amount, given that it receives low levels of rural development funding and wants to find money for its ambitious agri-environmental schemes. The Parliament can only delay the eventual decision, as it is not part of the co-decision procedure.

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