EU Farm to Fork Strategy: How reasonable is the turmoil predicted by USDA?

December 7, 2020

EU Farm to Fork Strategy: How reasonable is the turmoil predicted by USDA?

We are pleased to welcome this guest post by Dr Yelto Zimmer, who is the coordinator of the agri benchmark Cash Crop Network at the Thünen Institute, Germany. Comments can be emailed directly to yelto.zimmer@agribenchmark.net.

The US agricultural ministry (USDA) recently published a report on the likely consequences if the EU Commission’s Farm to Fork (F2F) Communication were to be put in place. In this paper, the Commission proposes a set of measures that are supposed to lead to lower greenhouse gas emission in European agriculture and improve the overall environmental and public health performance of the sector.

Even in the modest USDA scenario, the projected outcome from F2F would be substantial turmoil of EU agriculture and even some significant changes in global agriculture. If the EU reduced its fertilizer use by 20% and its use of crop protection products and livestock antimicrobial products by 50%, USDA estimates the total value of EU agricultural output would shrink by 12% and domestic prices would rise by 17%.

Most remarkable: The USDA foresees a massive reduction in wheat (-48%), oilseeds (-60%) and beef (-14%) output. Furthermore, it is projected that global commodity prices will increase by 9% and global output would drop by 1% – mainly driven by a 20% reduction in EU exports. Last but not least, USDA forecasts the number of people with food insecurity would increase by 22 million globally.

Whether or not such massive changes are likely to happen remains to be seen. However, a few indicators suggest that this projection is very pessimistic:

1. Given the number of very important, but so far unknown, framework conditions for the F2F strategy (e.g. reference periods for reduction goals regarding input usage, methods to measure goals, relevant units that would need to comply [individual farms, regions, member states]), this attempt to quantify the consequences from F2F in one figure (rather than giving a range) is brave and bold. Furthermore, the way USDA interpreted some of the goals is at least questionable. For example, in the Commission paper it says that the Commission will take action “to reduce the overall use and risk of chemical pesticides by 50%.” That broad statement provides room to manoeuvre with quantities and risks.

2. I also wonder whether the global trade model, GTAP, which has been used to assess the impacts, is appropriate to mimic the implications from such fundamental changes. If one assumes the most rigid application of the mentioned reductions is put into practice, I would expect significant changes in production systems and rotations, because individual crops can cope with limitations in fertilizer and crop protection product availability rather differently.

3. From nitrogen intensification trials in Germany, we know that a 20% reduction in nitrogen input causes wheat yields to fall about 5% to 10%. That does not even come close to the projected reduction. As another indicator, a reduction of wheat output by 48% would be roughly expected if EU wheat production would be converted to organic. Given the Commission plan envisages reducing fertilizer use by 20% and crop protection use by 50% – not by 100% as in the case of organic – the USDA projection is very pessimistic.

4. It seems one fundamental reason why USDA is forecasting much lower output is the way they handled arable land use. With lower input use and lower yields, their model anticipates crop production no longer will be profitable in major parts of the EU. This then leads to less land being used for arable production (-10.5%).

In a scenario where profits from farming go down significantly, land rents and hence cost would go down as well – at least in the medium-term. Recall the fact that in Europe we have a lot of arable regions where land rents can easily be as high as €700/ha (or $840/ha) and higher – a lot of room to manoeuvre. As land cost falls, arable production that initially became unprofitable will become profitable again.

It seems as if the model projects a lot of areas in Europe where the return to land will go down to zero and hence land will fall idle. But, even if this will happen, zero land rents incentivize innovative producers to develop new, more extensive production systems that, in most cases, would enable them to profitably grow crops. The example of Australia tells us that it’s possible to profitably produce wheat at yield levels of about 2.5 t/ha. In extreme cases, the alternative land use might be grazing with livestock. However, since USDA also projects much lower cattle production (-14%) and less pastureland (-6.1%) this cannot be the explanation.

6. Furthermore, the USDA report states that the very strong reduction of oilseed production is caused by strong competition from global markets. Considering the already narrow and grain-dominated rotations in most parts of the EU, a strong reduction in oilseed acreage is not a very reasonable scenario. Rapeseed acreage – the main oilseed crop in Europe – already has gone down dramatically. Therefore, in the many parts of the EU, farmers are desperately looking for broad-leaf crops to manage plant health issues stemming from rotations with a lot of grain crops. Therefore, unless soybeans really take off, a further strong decrease in rapeseed acreage is very unlikely.

All in all, the paper sounds a bit loud while in fact the actual knowledge about the concrete actions of the EU is rather low and likely reactions of growers are even less well understood. On the other hand, it is obvious that the F2F strategy does contain a number of serious contradictions. For example, setting 10% of the land aside for environmental services, converting 25% of the land to organic and using less crop protection and fertilizers significantly reduces output and therefore leads to respective land use change elsewhere in the world. This, of course, stands to boost GHG emissions globally because additional land will be converted to arable land to replace the output forgone in the EU.

The counter argument from the EU – that they will promote innovations that will drive up productivity and thus compensate losses is not really convincing – especially for an institution that is, so far, actively blocking innovations – e.g. CRISPER-Cas technology.

The other potential relief claimed by the EU, the change in diets – less food waste, less livestock products – might work on paper. However, whether consumers will adhere to such advice from politicians is the big unknown. Or as we say in Germany: paper is patient.

This post was written by Yelto Zimmer.

Photo credit: DG AGRI

January 12, 2020January 15, 2020

Agriculture in the European Green Deal

The Commission published its Communication on the European Green Deal in mid-December 2019. Previously flagged in Commission President von der Leyen’s Political Guidelines for the new Commission, it defines the key political objectives of the new Commission for the next five years.

The headline commitment is to make Europe the first climate-neutral continent by 2050 (while conflating the EU with Europe may seem like over-reach by the Commission, it should be remembered that other European countries, most recently Switzerland, either participate in or are linked to the EU Emissions Trading Scheme and the UK government’s preference is that it will remain associated after Brexit).

But the Green Deal goes well beyond just climate policy and is intended to address environmental sustainability issues more broadly, including the protection of natural resources and the minimisation of resource use. The broad scope of the Green Deal is illustrated in the diagram below taken from the Commission Communication.

Elements of the European Green Deal

The European Green Deal is advertised as Europe’s new growth strategy. It aims to transform the EU into a resource-efficient and competitive economy where there are no net emissions of greenhouse gases in 2050 and where economic growth is decoupled from resource use.

The Commission recognises that new technologies and disruptive innovation are critical to achieve the objectives of the European Green Deal. Horizon Europe is expected to play a pivotal role in leveraging additional public and private investment in research. At least 35% of its budget will fund new solutions for climate which are relevant for implementing the Green Deal.

This is a poke in the eye of those environmental groups that believe that ‘degrowth’ is necessary to stay within planetary boundaries and who call for a sharp cut in living standards to achieve this. But the Commission is right to emphasise that decarbonisation and growth must go hand in hand. The destruction of wealth and the scale of job losses involved in the green transition will only be acceptable if there is sufficient economic progress to open alternative opportunities for those displaced.

For some economists, the considerable additional investment required to decarbonise the economy could act as a needed stimulus for the European economy and help to stave off the next recession (for example, this blog post by Jean Pisani-Ferry on the Peterson Institute of International Economics website). The very low, in some countries negative, interest rate environment makes it attractive to front-load investment by issuing debt. Both public and private investment will be required although private investment will have to do most of the heavy lifting, and the question is what can trigger this?

The Commission will later this week launch a Sustainable Europe Investment Plan to support one trillion euro of investment over the next decade. The intention is to increase funding for the green transition in various ways. At least 25% of the EU’s long-term budget should be dedicated to climate action. The European Investment Bank, Europe’s climate bank, will provide further support by doubling the share of its total financing (currently 25%) dedicated to climate investment by 2025. Additional private funding will be leveraged using the EU’s budget guarantee, with the InvestEU Fund expected to leverage €280 billion of private and public investment in the coming decade. For the private sector to contribute to financing the green transition, the Commission will present a Green Financing Strategy in 2020.

Pisani-Ferry notes that these measures will not be enough to induce green capital expenditures in the absence of a high, credible, long-term carbon price that puts a monetary value on reducing emissions. The European Green Deal needs a far higher price of carbon. What this price should be in 2030 can be debated. It is certainly encouraging that recent reforms of the Emissions Trading System have led to a sharp increase in the price of allowances for the 45% of emissions covered by the ETS. However, few governments have had the political courage to price carbon adequately in the non-ETS sector and some of those that have tried, such as France, have quickly back-tracked in the face of popular protests.

Source: European Energy Exchange via PIIE

Hence the importance of the European Climate Law that the Commission intends to propose in March to enshrine the 2050 climate-neutrality target into law. According to the Commission Roadmap for the Climate Law it intends to transform the way EU policies are made and to set the long-term direction of travel for meeting the 2050 climate-neutrality objective through all policies, in a socially-fair and cost-efficient manner. It will aim to ensure that all EU policies contribute to the climate-neutrality objective and that all sectors play their part. By summer 2020, the Commission will present an impact-assessed plan to increase the EU’s greenhouse gas emission reductions target for 2030 to at least 50% and towards 55% compared with 1990 levels in a responsible way (36 to 43% reduction with respect to 2017, see diagram).

To deliver these additional greenhouse gas emissions reductions, the Commission will, by June 2021, review and propose to revise where necessary, all relevant climate-related policy instruments. Part of this plan will be to further reform the Emissions Trading System to include more sectors, with buildings, transport and the maritime sector specifically mentioned. Member State targets to reduce emissions in sectors outside the Emissions Trading System will be re-examined, and the regulation on land use, land use change and forestry will be reviewed. These policy reforms should help to ensure effective carbon pricing throughout the economy.

The Commission’s climate ambitions will cause significant economic dislocation. The transition to a carbon-neutral economy will destroy jobs in extractive, energy-producing, and manufacturing industries. Decarbonisation will reduce the value of brown assets (from coal mines and oil fields to energy-inefficient housing). At the same time, it will require investing in new processes and technologies because the pricing of carbon will encourage new investment in energy efficiency and renewable energy and create jobs in the service sector. It will therefore involve significant reallocation of labour across industries.

The Commission recognises that the green transition can succeed only if it is conducted in a fair and inclusive way. It therefore proposes a Just Transition Mechanism, including a Just Transition Fund, as part of the Sustainable Europe Investment Plan, to ensure no one is left behind. This will focus on the regions and sectors that are adversely affected by the transition because they depend on fossil fuels or carbon-intensive processes.

Support will be linked to promoting a transition towards low-carbon and climate-resilient activities. It will also strive to protect the citizens and workers most vulnerable to the transition, providing access to re-skilling programmes, jobs in new economic sectors, or energy-efficient housing. It will draw on sources of funding from the EU budget as well as the EIB group to leverage the necessary private and public resources. For selected sectors exposed to international competition, the Commission intends to propose a border carbon adjustment mechanism to reduce the risk of carbon leakage.

The Just Transition Mechanism is intended to provide targeted support to help mobilise over €100 billion for the affected regions. It will have three elements: a Just Transition Fund of €7.5 billion from the EU budget managed under Cohesion Fund rules with a requirement for national co-financing using Cohesion Fund resources and additional national financing to provide between €30-50 billion of financing; a dedicated just transition scheme under InvestEU to mobilise up to €45 billion of investments; and a public sector loan facility with the European Investment Bank backed by the EU budget to mobilise between €25 and €30 billion of investments.

Cohesion Fund recipients express concern that, unless there is a further increase in the overall EU budget beyond the Commission’s draft MFF proposal, this could simply represent a reshuffling of existing Cohesion Fund resources.

The just transition mechanism will be supported by a European Climate Pact to be launched in March 2020 – bringing together regions, local communities, civil society, industry and schools. Together they will design and commit to a set of pledges to bring about a change in behaviour, from the individual to the largest multinational. This recognises the importance of the involvement and commitment of the public and all stakeholders to the success of the European Green Deal.

Farm to Fork Strategy

Farming and food systems will have a major part to play in delivering the European Green Deal. A new Farm to Fork Strategy will prepare a roadmap towards a fair, healthy and environmentally-friendly food system. It reflects an apparent seismic shift in the framing of agricultural and food policy within the Commission over the past two years in the wake of damning reports from the International Panel on Climate Change (on the climate emergency), the Intergovernmental Science Policy Platform on Biodiversity and Ecosystem Services (on the collapse in biodiversity) as well as the European Environment Agency’s State and Outlook Report on the European Environment 2020 (which, despite progress in some areas, noted that Europe is not on track to meet policy objectives and targets in many areas set out in the 7^th Environmental Action Programme).

The Commission’s White Paper on the future of farm and food policy in November 2017 which set out the rationale for the current update of the CAP post 2020 now seems to belong to another age.

True, it recommended that the CAP needed to pursue higher environmental and climate ambition in the light of the Paris Agreement and the UN Sustainable Development Goals but this was couched as a further evolution of existing farm practices and farm policy.

Much sharper language is now used in the Commission’s justification for its Farm and Food Strategy:

Food production results in air, water and soil pollution, contributes to the loss of biodiversity, climate change and resource depletion. Food waste is at an unacceptable level… Obesity is also a growing concern with over half the EU’s adult population is now overweight, contributing to a high prevalence of diet-related diseases and related health care costs. The European Union has committed to lead on the Sustainable Development Goals, however major changes are needed for us to be able to deliver. It is clear: a new, healthier, fairer and more sustainable approach to food systems is needed. Business as usual is no longer an option.

The Commissioner for Health and Food Safety Stella Kyriakides bluntly repeated this message in her speech at the annual DG AGRI Outlook conference last December.

Today’s Europe is facing some uncomfortable truths. The population is growing, yet natural resources are shrinking and biodiversity is disappearing. Millions of citizens live in food poverty, yet we waste a fifth of the food we produce, and half the adult population is overweight.
We have committed to lead on the Sustainable Development Goals, but we cannot deliver without implementing major change. It is clear: a new, healthier, fairer and more sustainable approach to food systems is needed. Business as usual is no longer an option when it comes to food production.
This goes for producers as well as for consumers.
The Farm to Fork strategy for Sustainable food is a key component of the European Green Deal. European food is famous for being safe, nutritious and of high quality. It should now also become the global standard for sustainability.

This step-change in thinking within the Commission is the product of a number of factors: the mounting evidence of environmental damage with potentially catastrophic consequences if left unchecked, as spelled out in the reports cited earlier; the results of the European Parliament elections in May 2019 which saw an increase in support for green parties and which had a significant influence on the way Commission President von der Leyen formulated her Political Guidelines (even if, in the end, these parties did not vote for her election); and the dilution of the sole power of DG AGRI to determine farm policy, a process that had begun under previous Commissions but which will be accelerated by the new working structure of the Commission (see diagram below).

The farm unions do not yet appear to have grasped the extent to which the fundamentals of the farm policy debate have shifted in the past two years. Their response to the damning indictment of the impact of current farming practices in the reports quoted above has been to complain of agri-bashing and that farmers are being unfairly blamed!

Indeed, individual farmers must work within a market and policy system that has failed to properly reflect sustainability issues and can hardly be blamed for doing the best they can within that system. The Commission’s Farm to Fork Strategy has now recognised that this system is no longer fit for purpose. Fortunately, there are also those within the farming sector, both individual farmers but also sectors such as the dairy industry, that also share this view.

The Farm to Fork strategy will have six principal objectives which feed into and are in turn influenced by other strategic objectives of the European Green Deal:

To contribute to Europe’s climate change agenda
To protect the environment (linking to the Zero Pollution Strategy and the Circular Economy Strategy)
To preserve biodiversity (contributing to the updated Biodiversity Strategy for 2030)
To encourage sustainable food consumption
To promote affordable and healthy food for all
To improve farmers’ position in the value chain.

We have some inkling of what might be proposed to address these objectives in the Mission Letters provided by Commission President von der Leyen to the various incoming Commissioners (see figure below). In agricultural policy, the Agriculture Commissioner is encouraged to seek a swift agreement on the CAP post 2020 that should be ambitious both in terms of food security and environmental and climate objectives. He is asked to focus specifically on healthier and more sustainable food production, including through organic production.

The Commissioner for Health and Food Safety will lead on the Farm to Fork Strategy covering every step in the food chain from production to consumption. She is asked to reduce the use of chemical pesticides, fertiliser and antimicrobials as well as to reduce the exposure of citizens to endocrine disruptors as part of delivering on the zero-pollution ambition. Another of her responsibilities will be to contribute to the circular economy by reducing the environmental impact of the food processing and retail sectors by acting on transport, storage, packaging and food waste. She will also stimulate sustainable food consumption and promote affordable healthy food for all by improving consumer information, notably by looking at ways to address demands for more visible and complete information on the health and sustainability of food products.

The Environment Commissioner has two major tasks relevant to agriculture. He will lead on the zero-pollution ambition with responsibility for reducing air, water and noise pollution from agriculture and food production, as well as putting forward a new Biodiversity Strategy for 2030. His work on the Circular Economy Action Plan designed to ensure sustainable resource use particularly in resource-intensive sectors may also have implications for the agricultural sector.

The Climate Action Commissioner will have responsibility for proposing the EU’s Climate Law in March 2020 that will enshrine the EU objective of climate neutrality objective by 2050 in legislation. The Commissioner will also present by summer 2020 an impact-assessed plan to increase the EU’s greenhouse gas emission reductions target for 2030 to at least 50% and towards 55% compared with 1990 levels in a responsible way.

Finally, the Trade Commissioner has two responsibilities of potential relevance to future agricultural policy. One is the task to contribute to the design and introduction of a border carbon tax working closely with the Commissioner for the Economy. While agriculture is not likely to be among the first industries covered by this tax, it may have relevance if market-based instruments (such as an emissions tax or inclusion of agriculture in the Emissions Trading Scheme) were extended to agriculture as part of a more ambitious climate package. The Trade Commissioner will also be responsible for negotiating and enforcing the sustainable development chapters in trade agreements.

Overseeing the whole will be Frans Timmermans who, as well as being Climate Action Commissioner, is also the Executive Vice-President in charge of the European Green Deal.

Many open questions

The Commission will present the Farm to Fork Strategy later this spring with a view to launching a broad stakeholder debate covering all the stages of the food chain and paving the way to formulating a more sustainable food policy. What the implications for agriculture will be when these various inputs are brought together under the responsibility of the Executive Vice-President for the European Green Deal and the Commissioner for Health and Food Safety (and not the Commissioner for Agriculture) remain to be seen.

Although the Commission has spelled out its intentions with respect to the Strategy in some detail, many open questions remain and will only be resolved in the months ahead. A shortlist of the most important questions would include the following (for a more comprehensive and detailed list, see this open letter from various civil society organisations to Executive Vice-President Timmermans) .

How will the European Green Deal be reflected in the MFF outcome for 2021-2027? The MFF negotiations were already underway on the basis of the Commission’s May 2018 draft proposa by the time the new Commission launched its Green Deal in December 2019. These negotiations have been bogged down in divisions between net contributor and net recipient Member States. The European Green Deal envisages significant additional expenditure to achieve the climate neutrality goal by 2050, notably for the Just Transition Fund for which no provision was made in the Commission’s MFF proposal. Poland specifically refused to sign up to the European Council conclusions in December 2019 endorsing the objective of a climate-neutral EU by 2050 because of the absence of assurances that Transition Fund money would be additional to the cohesion fund money it would already receive. Uncertainty around the future CAP budget also remains to be resolved.

How will the Farm to Fork strategy be reflected in the post-2020 CAP legislation? There is an awkward misalignment of timing between the ongoing negotiations on the Commission’s draft legislative proposals for the CAP post 2020 and integrating the findings of the Farm to Fork Strategy. The broad stakeholder debate paving the way to formulating a more sustainable food strategy will only be triggered in Spring 2020 and proposals for legislative change may only emerge later in the year when the CAP legislation may well be agreed.

Regulatory initiatives, such as those to significantly reduce the use and risk of chemical pesticides, as well as the use of fertilisers and antibiotics, are anticipated in 2021 and are independent of the cycle of CAP reform. Here the main focus will be on the scope of any specific reduction targets that are included.

Any moves to promote a more sustainable agriculture will have to be scheduled and funded as part of the post-2020 CAP legislation now being debated by the co-legislature. The Commission decided to support the draft legislation proposed by the previous Commission. It proposes instead that the draft CAP Strategic Plans to be prepared by Member States under this draft legislation would be examined by the Commission with reference to the ambitions of the European Green Deal and the Farm to Fork Strategy. As stated in the Green Deal Communication:

Given that the start of the revised Common Agricultural Policy is likely to be delayed to the beginning of 2022, the Commission will work with the Member States and stakeholders to ensure that from the outset the national strategic plans for agriculture fully reflect the ambition of the Green Deal and the Farm to Fork Strategy. The Commission will ensure that these strategic plans are assessed against robust climate and environmental criteria. These plans should lead to the use of sustainable practices, such as precision agriculture, organic farming, agro-ecology, agro-forestry and stricter animal welfare standards. By shifting the focus from compliance to performance, measures such as eco-schemes should reward farmers for improved environmental and climate performance, including managing and storing carbon in the soil.

While this sounds fine in principle, major questions remain whether amendments to the Commission’s draft legislation by the co-legislature will remove some of the tools and instruments foreseen to drive the green transition in farming, and whether the proposed governance arrangements are sufficiently robust to enable the Commission to ensure that Strategic Plans fully reflect the ambitions of the Farm to Fork Strategy.

What will be agriculture’s role in the transition to climate neutrality? The Farm and Food Strategy is intended, among other things, to strengthen the efforts of European farmers to tackle climate change but the Commission Communication is not very forthcoming on how this might be done. An important contribution of the Strategy should be to clarify the contribution expected from the farming and food sector and to make more concrete the roadmap to deliver this contribution.

The main policy instrument highlighted in the Communication is the requirement that at least 40% of the common agricultural policy’s overall budget should contribute to climate action. It says it will work with the European Parliament and the Council to achieve at least this level of ambition in the proposals. If the Commission wants its Farm and Food Strategy to have a minimum of credibility, it should immediately seek the agreement of the co-legislature to revise the basis for this calculation which is set out in Article 87 of the CAP Strategic Plan draft regulation.

The weightings set out in this Article bear no relationship to the real climate impact of the different CAP measures, as has been pointed out by the European Court of Auditors. This type of greenwashing, obvious to everyone, simply undermines the Commission’s credibility and the force of its argument that business as usual is no longer an option. As the Court has pointed out, the use of these weightings in the current period has meant that there was no significant shift in CAP funds towards climate action. Before the process of approving the Strategic Plans, the Commission should come forward with revised weightings based on better indicators of the actual climate impact of the different CAP measures and seek agreement on amending the draft Regulation to incorporate these improvements.

Agricultural emissions are not expected to be reduced to zero in the various pathways to net zero examined in the Commission’s 2018 Communication A Clean Planet for All, but it remains an open question whether some specific reduction targets at EU level should be set. The way in which emissions and removals in the LJULUCF sector are integrated into reduction targets may need to be reviewed when these targets are increased.

Agriculture is specifically not mentioned as one of the sectors that might be integrated into the ETS, leaving open whether the Commission sees a role for market-based instruments in reducing these emissions. The extent to which the non-CO2 agricultural emissions of nitrous oxide and methane can be reduced by efficiency improvements or technological options, or may require reductions in activity levels, specifically livestock numbers, should be examined. The role of greenhouse gas metrics, considering the specific characteristics of methane as a short-lived gas in the atmosphere, should be evaluated. The potential for diet changes, technological innovations in developing alternative proteins and reductions in food waste to drive emissions reduction along the food chain should be assessed.

How will the just transition principle apply to agriculture? The previous analysis pointed out that implementing the European Green Deal is bound to be disruptive, leading to job losses in some sectors that will disappear but also promising new opportunities in the green sectors that will emerge in the transition. Such disruption can also occur within sectors, such as agriculture. One of the reasons why developing a climate roadmap for agriculture at the EU level is a good idea is that it would help to identify the likely scale of the changes expected and where disruption might occur. Whether agricultural regions that may be adversely affected will be eligible for assistance from the Just Transition Fund is another important question for the future.

This post was written by Alan Matthews

Update 15 January 2020: The paragraph on the Just Transition Mechanism was updated to incorporate further details made availabe in the Commission’s announcement of the Mechanism the previous day.

Picture credit: Ben_Kerckx

September 17, 2019October 2, 2019

The start of von der Leyen’s Commission Presidency

Ursula von der Leyen, then the German Minister for Defence, emerged as the surprise choice of the European Council leaders at their meeting on 21 June 2019 following their inability to agree on any of the Spitzenkandidaten. After an amazingly short period to read herself into the brief, she presented her Political Guidelines for the new Commission and summarised these in her oral presentation as part of her confirmation hearings in front of the European Parliament on July 16 2019.

Leaders of four of the Parliament’s political groups (the EPP, S&D, Renew Europe and the Greens, sometimes called the pro-EU parties to distinguish them from the more Eurosceptic parties both on the left and on the right – it is a handy tag though I am not comfortable using that description which is inherently exclusionary) had attempted to come together and, for the first time, to forge a common political platform and a common candidate for the Commission Presidency.

However, there were too many complications in light of the changed distribution of political strengths following the Parliament elections in May and the process stalled when the groups failed to reach agreement on a common candidate. Von der Leyen’s position as the incoming Commission President was confirmed by the Parliament on 16 July by the narrowest of margins. She obtained 383 votes compared to the minimum necessary threshold of 374 in a secret ballot, with 22 abstentions or blank votes.

Nonetheless, although she herself comes from the EPP group, her political manifesto was clearly influenced by her intense discussions with the political groups in the weeks leading up to the vote and was designed to appeal across the pro-EU political groups. It was pointedly ambitious when it came to climate and environmental issues (despite this, the Green political group did not endorse her nomination because it judged her climate commitments remained too vague). Her proposal for a European Green Deal was the first of six political ambitions highlighted in the Political Guidelines and is not only intended to address climate and environmental objectives but is also put forward as the basis for future industrial and technology policy.

This commitment has subsequently been followed up in her Mission Letters to each of the Commissioners-designate in their various roles. At the time of writing the Commissioners-designate are preparing for their confirmation hearings in front of their respective Parliament Committees (scheduled to take place between September 30 and October 8). The approval process will conclude with a vote on the new College in the Parliament on October 23, with the current Commission mandate ending on October 31.

If one or more Commissioners-designate fail to make it through the confirmation process, new names will have to be proposed by the relevant Member States which could delay the process. However, the Mission Letters themselves will not change even if new names are attached to those portfolios.

In this post, I review what the Political Guidelines and Mission Letters might imply for the future of agricultural policy and rural areas. While no doubt the personalities, programmes and political skills of individual Commissioners will influence the way in which these mandates are executed in practice, they provide an important statement of intent regarding the priorities of the von der Leyen Commission.

New Commission organisational structures

Commission President Juncker pioneered the idea of Commissioners working in project teams led by Vice-Presidents. His Commission had originally seven Vice-Presidents including the High Representative (the EU’s foreign policy chief). Von der Leyen has strengthened this idea, appointing a total of eight Vice-Presidents. Three of these are Executive Vice-Presidents who will also manage a policy area.

Once again, the Vice-Presidents will play a coordinating role in managing groups of Commissioners (now called Groups rather than teams) but one has the sense that this coordinating role is more institutionalised in the coming Commission and that the Vice-Presidents will play a larger role in driving policy in their respective areas. For example, Vice-Presidents will hold a monthly meeting (“Strategic Jour Fixe”) with each Commissioner and his or her senior staff under their wing which will be prepared by the Secretariat-General. This is one institutional way in which von der Leyen will attempt to hold Commissioners to account in delivering their mandates.

Von der Leyen has also published the main principles of the working methods that will be used by the incoming Commission. The principle that has caught most attention here is the “One in, one out” principle whereby every legislative proposal creating new burdens should relieve people and businesses of an equivalent existing burden at EU level in the same policy area. Given that there are already mechanisms under the Better Regulation Initiative to identify redundant or ineffective regulations (such as the REFIT Platform) there seems no justification for a patently crude rule that has no requirement to take account of the impact and benefits of a measure in addition to any burdens that it may impose.

Towards sustainable food, agriculture and rural areas

The mandate for the Commissioner-designate for Agriculture, Janusz Wojciechowski, falls squarely under the leadership of the Executive Vice-President in charge of the European green deal, Frans Timmermans (note that Rural Development is no longer part of the Commissioner’s title although he continues to have executive responsibility for this area). However, agricultural and rural policy will also be shaped by important mandates given to other Commissioners.

An overview of the mandates included in the Mission Letters relevant to agriculture and rural areas is shown in the following diagram. As regards agriculture which sits squarely in the Commissioners’ Group pursuing the green deal, relevant mandates also include Health, Environment and Climate. For the rural development part of his responsibilities, the Commissioner-designate will report to the Vice-President for Democracy and Demography, Dubravka Šuica, who has the responsibility for coordinating work on a long-term vision for rural areas. The mandates of some other Commissioners, shown under the heading ‘Supporting roles’, can play a more tangential role in influencing outcomes in agricultural and rural policy. Finally, the Budget Commissioner-designate has the mandate to assist the Commission President in landing a new Multi-annual Financial Framework for 2021-2027, which will determine the resources available for the initiatives to be taken in these policy areas.

The Mission Letter to the Commissioner-designate for Agriculture, Janusz Wojciechowski, begins with the standard recital recognising the important role of farmers (“Providing affordable food for citizens and a fair standard of living for farmers is one of Europe’s founding missions. Today, around 21 million people work in 11 million farms across Europe. They remain part of the fabric of our rural communities and a provider of safe, nutritious and affordable food for Europeans”).

However, it quickly moves on in the next paragraph to what von der Leyen clearly identifies as the important challenge. “Our agricultural sector is both central to achieving our climate-neutrality commitments and also sharply exposed to the effects of climate change. We must support it on both fronts to ensure that it stays competitive.”

The Commissioner is expected to swiftly conclude the negotiations on the Commission proposal for the CAP post 2020 and then to focus on the full implementation of the new policy. Von der Leyen insists that the legislation itself “must be ambitious in terms of food security and environmental and climate objectives” and when approving the CAP Strategic Plans he is required to “pay particular attention to the benchmarks and requirements on environment- and climate-related objectives”.

The mandate also recognises that the new CAP “should incentivise the uptake of digital technologies and ensure the sector can remain competitive, provide a fair income and support young farmers”. Nonetheless, the mandate makes clear that priority should be given to achieving a high level of environmental and climate ambition when signing off on the CAP Strategic Plans.

This focus is underlined by the mandate given to the Commissioner-designate for Health, Stella Kyriakides, to propose a ‘farm to fork’ strategy for sustainable food. This is the first time that specific responsibility has been given to one person in the Commission to ensure joined-up thinking with respect to the European food system as a whole. It will be widely welcomed by all those with an interest in food policy. For the Commissioner-designate for Agriculture, the responsibility will be to look at the contribution of agricultural production to overall food system sustainability, with organic agriculture mentioned specifically.

Another dimension of the Commissioner for Health’s mandate that will impact on the sustainability agenda in agriculture is von der Leyen’s zero-pollution ambition. Specifically, this Commissioner is required to work on protecting plant health, reducing dependency on pesticides and stimulating the take-up of low-risk and non-chemical alternatives, while also protecting citizens from exposure to endocrine disruptors. Perhaps surprisingly, no specific mention is made of the need to address anti-microbial resistance in this brief.

The mandate for the Commissioner-designate for the Environment and Oceans, Virginijus Sinkevicius, will also have broad implications for future agricultural policy. He is tasked with putting forward a new Biodiversity Strategy for 2030, “looking at everything from Natura 2000, deforestation, land degradation, protected species and habitats, and sustainable seas and oceans”. He will also lead on the zero-pollution ambition which “will require a wide-ranging approach looking at air and water quality, hazardous chemicals, emissions, pesticides and endocrine disruptors”.

The mandate for the Commissioner-designate for Climate, Frans Timmermans, will be to ensure that Europe is on target to achieve a climate-neutral economy by 2050. To meet this target, von der Leyen is proposing to raise the level of ambition for the 2030 EU emissions reduction target from a 40% cut over 1990 levels to a cut of 50% immediately and to raise this after 2021 to 55%.

This will require re-opening the difficult negotiations on the division of these increased reductions between the energy sector and large industry in the Emissions Trade Scheme (ETS), on the one hand, and the sectors including agriculture covered by the Effort Sharing Regulation, on the other hand. This will, in turn, imply more stringent national targets for emissions reduction for the non-ETS sectors including agriculture by 2030 which will increase the urgency to make the CAP more fit for purpose in incentivising a reduction in agricultural emissions than is the case at present.

An interesting element in von der Leyen’s Political Guidelines is her proposal to introduce a Carbon Border Tax to avoid carbon leakage, a responsibility given to the Commissioner-designate for the Economy, Paolo Gentiloni. Her suggestion is that this Tax would be introduced gradually, starting with a number of selected sectors. As carbon leakage can be high in the agricultural sector and this is often used as an argument against regulation of agricultural emissions, the success of this initiative could enable and encourage a stricter approach to reducing agricultural emissions within the Union in the future.

The mandates given to other Commissioners-designate may also have significant spill-over effects for agricultural policy. Those highlighted in the diagram above include Innovation and Youth (which will have responsibility for allocating resources to research), Energy (with responsibility for renewable energy policy), and Trade (responsible for negotiating and concluding free trade agreements including agricultural market access).

As was expected, Phil Hogan, the current Commissioner for Agriculture and Rural Development, gets the nod to move to Trade where, among other things, he will have responsibility for negotiating a free trade agreement with the UK after Brexit. In response to concerns that trade policy overrides EU objectives in the area of climate, environment and labour rights, von der Leyen proposes to create the post of Chief Trade Enforcement Officer to monitor compliance with the sustainability provisions of the EU’s trade agreements who will report to Hogan.

Finally, as noted already, the Commissioner for Agriculture’s responsibilities for rural development will be coordinated under the Vice-President for Democracy and Demography, and will include input from the Commissioner for Cohesion and Reforms. The only specific item highlighted in the mandate is to prepare a long-term vision for rural areas (do I sense another Cork conference in the offing?) and it is surprising that reference was not made to strengthening ongoing initiatives such as Smart Villages and digitalisation. One has the impression this was intended mainly as a marker that rural areas were not overlooked, and it leaves scope for the incoming Commissioner to put his own mark on this policy area recognising that, under the Commission proposal, the budget for rural development in the CAP will be curtailed.

Conclusions

Under the EU’s political decision-making structures, the Commission can only propose; it is up to the Council and Parliament together to legislate. Many commentators have pointed to the slim majority by which von der Leyen was confirmed in the Parliament to suggest that she cannot depend on a stable majority to implement the policies in her Political Guidelines. And her nomination by the Member States in the European Council is also unlikely to smooth the path of many of her legislative proposals.

Only time will tell whether this speculation is correct or not. For the moment, we can but applaud the clear identification of the challenges facing Europe and the many concrete proposals to address these challenges set out in the Political Guidelines and subsequent Mission Letters.

From an agricultural policy perspective, the new Commission promises a much sharper focus on addressing environmental and climate objectives within the CAP, a holistic approach to developing a ‘farm to fork’ sustainable food strategy, efforts to reduce the use of mineral fertiliser, pesticides and other chemical products and support for the circular economy. These ambitions are all to be welcomed.

Sceptics will say that the Commission has missed its opportunity because the proposed draft CAP legislation for the period after 2020, despite a promising shift to greater flexibility in the design of CAP interventions at the national level and good intentions about raising the level of environmental and climate ambition, does not have the governance mechanisms to deliver on these objectives (see, for example, this critique of the Political Guidelines by the Institute for European Environmental Policy).

But despite an unpromising start in the Council and COMAGRI it is too early to write off the outcome of the legislative process. Von der Leyen’s Political Guidelines and the proposed organisation of the incoming Commission may be enough to hit the ‘reset’ button although the key requirement for progress, agreement on the next MFF, remains an uphill battle.

At any rate, in my view there is a lot to celebrate as the new Commission prepares to take up office hopefully on 1 November. Let us seize the opportunity!

This post was written by Alan Matthews

Update: The post has been corrected to make clear that the date to achieve a climate-neutral economy in the EU is 2050.