Tuesday, December 11, 2012

Top official admits CAP deal will be delayed

A senior European Commission official let slip this week that the Brussels establishment is now preparing for the likelihood that reform of CAP Pillar One will be delayed until 2015, as time is running out on reaching a political agreement in time for the start of 2014, reports Agra Europe.

Gwilyn Jones, a member of EU Agriculture Commissioner Dacian Ciolos’ cabinet, is perhaps the first official to publicly say what many analysts have been thinking for a while now – that positions on this particular part of the CAP are too far apart for an agreement to be reached in the near term.

With the fairly radical overhaul of the Pillar One direct payment scheme proposed by the Commission and the subsequent debate on issues such as the convergence of payments and ‘greening’, it was always likely that this particular part of the CAP would divide member states.

However, the crux of the matter is still almost certainly the failure to conclude talks on the EU’s next long term budget – the multiannual financial framework (MFF) for 2014-2020. MEPs have made it clear they are not prepared to make any decisions on the CAP until they know how much money they have to work with.

Now that a MFF agreement is not likely to happen until late January at the earliest – when the talks will resume – it puts added pressure on efforts to reach a compromise deal and put the relevant measures in place in time for January 1, 2014.

Agra Europe's Chris Horseman believes that an agreement on CAP reform was not likely to happen before next summer at the earliest - but it would appear that even this deadline will now not be met.

So what now? Ciolos has made clear that he is still aiming for an agreement to be made in time for 2014 but has also mooted the idea of a “transitional year” taking us to 2015.

It is unlikely, however, that Pillar One in this transitional year will look any different to how it does now. The exact same structure for CAP direct payments would have to remain, provisionally, in place. The only difference is that if in the meantime agreement is reached on an MFF deal that will see the CAP budget trimmed, there will be less money available from 2014.

The assumption would be that the existing single farm payment scheme would ‘roll forward’ but with a cut in the budget of the order of 2-3% - and under the Financial Discipline Mechanism rules that would translate automatically into a proportional cut in each farmer’s direct aid payment cheque in 2014. This is a scenario which is unlikely to satisfy anyone, but such an outcome is all too familiar with the CAP.

There is more optimism that a common position on Pillar Two – rural development – can be reached in time for 2014, as was expressed at the recent Farm Council. How this could sit with a Pillar One framework that maintains the status quo will be something for MEPs and domestic ministers to ponder as they enter the Christmas and New Year break.

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