In June 2020 the Council and COMAGRI negotiators reached a partial provisional political agreement on all essential aspects of the Commission draft Regulation extending the CAP provisions beyond 2020 (I discussed the Commission’s draft Regulation in this post). This followed a decision by COMAGRI to enter into negotiations with the Council without first seeking a Parliamentary first reading position on the basis of its legislative report on the draft Regulation agreed in May 2020. While most of the provisions of the CAP direct payments regulation would apply as long as that regulation remains in force, the transition regulation is necessary to provide a legislative basis for other CAP spending after 1 January 2021.
There is increasing focus on how the coronavirus pandemic is likely to affect agricultural markets, food supply chains and farm incomes (for example, the series of IFPRI Resources and Analyses on COVID-19). Panic buying of long-life staples – as well as toilet roll, of course – led to temporary shortages on supermarket shelves but supplies were very quickly replenished.
In the medium-term, there are concerns that labour shortages, logistical difficulties in transporting goods across borders and falling export demand have the potential to cause disruption. The various actors in the European food chain issued a statement on 19 March calling attention to likely operational difficulties and asking the Commission to ensure that free movement of goods within the single market can continue, including through managing ‘green lanes’ at borders, to allow the food chain to function effectively.
DG AGRI and the Commission have now officially recognised that, in view of the present state of play in both the Parliament and the Council, the basic acts governing the CAP post 2020 and the ensuing delegated and implementing acts will not be formally adopted by January 2020 and that, therefore, it will be necessary to plan for a transitional period. The new legal framework will now begin from 1 January 2022.
Although the current CAP Regulations continue in force until they are repealed, they need amendment to ensure that there is a legal basis for making payments to farmers in 2021.