The S&D give two reasons a ‘New Start’ (yes, in capital letters, just like the ‘New Deal’ they are calling for) is imperative. The first is the common environmental public goods rationality (climate change, water management, renewable energy, biodiversity, soil erosion). The second is a combination of social concerns: reducing regional disparities, redirecting subsidies from the most competitive to more needy farm holdings, and creating employment (‘the granting of aid must absolutely be linked to job creation in rural areas in order to maintain, bring to life and develop the agricultural area in all regions of Europe’).

Concerns about employment and vitality in rural regions seem to point towards the strengthening of the non-agricultural component in rural development (Axes 3 of Pillar 2). But the document takes a most interesting turn in the opposite direction: the ‘hotchpotch’ of Pillar 2 should be cleared up, all CAP subsidies should be merged into one pillar, and all current CAP instruments that no longer fit should be transferred to the regional and cohesion policy.

I have a number of problems with the document. I am concerned about the objective of stimulating agricultural employment through the CAP and do not see the need to have a generalized payment link to natural handicaps. Furthermore, I very much like the extension of national co-financing of CAP subsidies, which the document rejects without further explanation.

Nevertheless, my overall assessment is strongly positive. The level of change envisioned is outstanding, and the general tone is rational/progressive (‘instruments must be better focused on objectives; priority must be given to expenditure that is more socially useful, such as financing of public goods made available to society; and handouts (direct subsidies) must be replaced with measures encouraging those involved to take account of the new requirements (new contractual approaches). Public subsidies should be given to farmers in return for their provision of environmental services and landscape management.’)

Comparing this statement to the stubborn defense of vested interests that is endemic in the EP Committee on Agriculture, it is a great step forward. And this is all the more important since Paolo De Castro, the chairman of the EP Committee on Agriculture, is a Socialist.

But I think we may need to take into account the context of this confirmation hearing, which was solely before members of the EP’s Committee on Agriculture. Thus, Mr Ciolos was faced with a totally one-sided perspective on agricultural policy by agrarian representatives. Committee members sought his views on the reintroduction of price supports, higher barriers against third country imports and more support for their special interest groups. While in a democratic parliament farmers have every right to have their views and concerns raised, why were there no representatives from the Committee on Development? From the Environment Committee? From the Health Committee? From the Committee on Budgets and from Consumers? All of these groups have a legitimate interest in agricultural policy. This was a disgraceful decision by the Parliament, which in the case of other Commissioner-designates associated members of other Committees with the questioning of the nominee.

Given this loaded confrontation, I thought Ciolos actually made a reasonable fist of his replies, in that he avoided giving hostages to fortune while showing a suitable deferential attitude to the Committee which had the power to influence his nomination. He described himself as a reformer, although he clarified that this meant adapting the CAP to the realities of 27 Member States and to new situations, and did not mean reducing financial support to agriculture or giving up existing instruments. But he was firm in making clear that there could be no return to the market support instruments of the past, while leaving open the need for new instruments to address questions of price and income volatility. He also seemed to be prepared to think creatively about the second pillar, and his defence of the current level of the agricultural budget was not a defence of the Pillar 1 budget alone. I would not be prepared to write off prospects for CAP reform yet during the period of Mr Ciolos’ tenure.

There is a useful summary of the hearing exchanges prepared by the Parliament here, but as yet no full script of the hearing. The written answers to questions posed by EP AGRI to Mr Ciolos are available here.

Some light may be thrown on the way the EP will exercise its new legislative role by looking at trade policy, another area where the Parliament gained new powers under the Lisbon Treaty. Currently, the EU-South Korean Free Trade Agreement, which was negotiated under the old Nice Treaty rules, is up for ratification under the new Lisbon rules. According to a report in EUObserver, there is a possibility that the EP could reject the agreement, in large part because of lobbying by European small car manufacturers.

The EUObserver report notes that a debate in the Parliament next week will throw light on the stance of the European legislature, with observers predicting support or opposition is likely to fall along national rather than political lines. One MEP, Christofer Fjellner, a member of the parliament’s trade committee and a supporter of the agreement is quoted: “It would be very disturbing if the first thing the European Parliament does with its new powers is to take special interests to heart and increasingly act in a protectionist way.”

A signpost of things to come in agricultural policy ?

For those who don’t know, cross compliance is the EU jargon for the strings attached to the €36 billion of direct payments to farmers handed out each year. The idea is that if farmers break the law by pouring slurry into nearby rivers, mistreating their livestock or fail to guard against animal diseases like BSE and foot and mouth, they get their subsidies cut. To say that cross compliance is applied with a featherlight touch in most member states is an understatement. Farmers hate it, so do most of the people responsible for enforcing it. Moreover, the requirements of cross compliance in most cases go no further than what is already required by national law. So farmers are being paid €36 billion not to break the law. Nice! Rather like paying drivers not to break the speed limit.

I have it on reliable evidence that the Court of Auditors report takes a dim view of cross compliance and makes uncomfortable reading, particularly for those (like Agriculture Commissioner Mariann Fischer Boel and most of Europe’s farm ministers) who want to further reduce the ‘burdens’ of cross compliance.

But back to the cover-up. I’m told the Commission used a simple but effective bureaucratic tactic to ensure that the report was not published in advance of this week’s plenary session in the Parliament and Council meeting: it delayed the translation of its responses to the Court’s findings. Under EU law the Court is required to publish alongside its own report the responses of the Commission to its findings. The law sets down a time limit for the Commission to produce its response, and the time limit was adhered to.

However, according to Mr Casaca, the Commission delayed the translation of its response into other languages, and there is no legal time limit on the translations. This is how the Commission delayed the publication of the report and I agree with Mr Casaca that it is a bona fide scandal. No doubt Sir Humphrey (pictured, right) would be proud of his EU protégés. Though it leaves the rest of us feeling a bit cheated.

A similar confusion applies to the yesterday’s agriculture votes in the European Parliament. It is a peculiar quirk of Europe’s elected chamber that most votes are not recorded but taken on informal shows of hands or pre-cooked by the political group leaderships. As one EP insider put it to me today:

“As to the voting lists, they are often political group secrets. You will only get them from the group staff or coordinators and even then, unless the vote is registered electronically, you will never know how someone voted on an issue unless you ask them specifically and even then they might not even know. They follow the coordinator, ie the guy in front who sticks his thumb up or down, and sometimes there will be a dissenting national view so they will follow the national line rather than the group one! If the vote is registered you can find the nominal vote per MEP per amendment the day after the vote in the EP records, but this rarely happens for a huge report like yesterdays unless a political group has requested it.”

Another correspondent put it more bluntly:

“The European Parliament’s procedures on members’ voting are an affront to democracy.”

But at least the Parliament holds it debates and votes in public. The Council remains a stereotypical ;smoke-filled room’. We can only guess at what secret deals were cut in the small hours of last night, and who’s arguing for what.

Do people seriously wonder why so many Europeans regard the EU’s representative institutions as distant and obscure?

Niels Busk MEP, coordinator in the Agriculture Committee for the centrist Alliance of Liberals and Democrats for Europe attacked the compromise deal of the Socialist Group and the EPP:

“I would have preferred that Parliament support the original proposals of the European Commission which would better equip Europe’s agriculture sector for the challenges facing it in the 21st century”

Speaking on behalf of the Greens – European Free Alliance grouping, German MEP Friedrich-Wilhelm Graefe zu Baringdorf regretted that the Parliament was sticking to the policies of the past:

“The European Parliament today passed up the chance to call for a future-oriented agriculture policy. Instead it has supported a weaker position than the Commission’s initial proposal. Plans to properly address climate change, biodiversity loss, soil fertility and water management have been blocked and disappointingly few funds have been re-allocated to rural development.

“This is a victory for the agro-industry lobby, which has succeeded in maintaining the status quo of subsidies with minimal strings attached. Those that claim to represent farmers are in reality demanding public money to further industrialise food production, when what we need is a real shift towards sustainable rural development with social and environmental factors fully taken into consideration.

His sentiments were echoed by his British colleague Caroline Lucas MEP:

“At a time of food and energy crisis, EU policy continues to be biased heavily in favour of energy-hungry industrialised production. This comes at the expense of any substantial support for local, sustainable or organic agriculture.”

I am ashamed to say I have no idea how one finds out how MEPs have voted (is this symptomatic of the fabled EU ‘democratic deficit’?) and the Romanian think tank that runs a vote-tracking site seems not to have updated it since May 2008. If anyone reading has the voting lists, please post a link in the comments or send by email to news (at) caphealthcheck (dot) eu.

In one sense none of this matters since the Parliament has no legislative role on agriculture policy. But one day it might and even if they have no formal powers, MEPs are well-placed to change the ‘mood music’ around the future of agriculture policy and put forward imaginative ideas for how it can be improved. They can hold hearings, commission research reports, go on television and radio, lobby the Commission, build alliances…

And the next time the EU makes big decisions on the CAP, the European Parliament could well have co-decision powers, if the Lisbon Treaty has been ratified. To date, the Parliament has done little more than act as a modest break on the reform direction set by the Commission. Groups have been divided and prey to special interest pleading by powerful lobbies representing beneficiaries of the status quo. The disarray over the health check suggests that Mr Casaca’s analysis is right: the Parliament lacks a vision for agriculture, lacks leadership on the issue and doesn’t have the means to make evidence-based decisions. All this suggests it has a long way to go if it is going to exert a meaningful role on behalf of European citizens on food, farming and rural affairs. The time to start working on this this is now.

“Your position, Commissioner, on compulsory modulation, is right. Your position on decoupling is right. For once we have a Commission that seriously wants to reform the CAP but faces a Parliament that always fails to deliver on this issue and believes that the challenges that we face can be solved by sticking to the old, discredited system. Hang tough, Commissioner, you are right and sadly, I suspect, this chamber will be wrong.”

It might interest some to see the Commissioner’s short speech.

The European Parliament doesn’t have any powers in agriculture policy but the Commission and the Council go through the motions of consulting the elected chamber and today the Parliament is debating its response to the Commission’s health check proposals. As Roger Waite explained earlier in the week, the idea of trimming payments to very large farms. It’s worth quoting the Commission’s reasoning in full:

(8) The distribution of direct income support among farmers is characterised by the allocation of a large share of payments to a rather limited number of large beneficiaries. It is clear that larger beneficiaries do not require the same level of unitary support for the objective of income support to be efficiently attained. Moreover, the potential to adapt makes it easier to larger beneficiaries to operate with lower levels of unitary support. It therefore seems equitable to expect farmers with high amounts of support to make a particular contribution to the financing of rural development measures addressing new challenges. Therefore, it appears appropriate to establish a mechanism providing for an increased reduction of the highest payments the proceeds of which should also be used to deal with new challenges in the framework of rural development. To ensure the proportionality of this mechanism the additional reductions should increase progressively according to the amounts of the payments concerned.

The European Parliament hasn’t taken kindly to the idea that Europe should ’spread the wealth around’ little more when it comes to farm subsidies, to quote the memorable phrase used by US President-elect Barack Obama it in his tête-à-tête with Joe the Plumber. Having twice failed to get agreement on a hard ceiling of 300,000 euros above which no subsidy is paid, the Commission took a rather more subtle approach this time, proposing a series of subsidy bands: the higher the band, the greater the reduction. Make no mistake, the reductions are not all that great, although they do ramp up over time. And also remember that the money saved by the cuts will not be returned to taxpayers, or spent on schools or hospitals. It will be spent on farm subsidies, but just a different kind of farm subsidies called ‘rural development’ – and that each euro cut from direct payments has to be matched with a new euro from member state treasuries.

The table below summarises the Commission plan and the Parllament’s proposed amendment:

It is important to remember that these proposals leave 80 per cent of farms unaffected as they receieve less than 5,000 euros. Around 18 per cent of farms receive between 5,000 and 99,999 euros, one per cent receive between 100,000 and 199,999 euros and fewer than 0.3 per cent receive more than 200,000 euros. But though they are small in number, this CAP elite receives upwards of 80 per cent of all subsidies.

Am I alone in finding it odd that the only directly-elected EU institution is fighting to ensure the CAP remains at its core a 50 billion euro a year slush-fund for Europe’s large landowners and big agribusiness?

I’ll come back later in the day with more on the Parliament’s deliberations.