The Commission's view of the CAP 'facts'

Professor Alan Matthews writes: 'The Commission has published a Fact Sheet on "The CAP post-2027" in the next EU budget' which includes, for the first time, an Annex showing how the minimum ring-fenced amount for CAP income support interventions will be allocated among Member States (this will eventually become Annex XVIII in the proposed NRPF Regulation). These minimum ring-fenced amounts per MS are based on their relative shares in the total CAP envelope for 2027. 

Farmers and commentators should not fall into the trap of comparing the current national Pillar 1 and Pillar 2 envelopes with these minimum amounts as countries are free to add additional resources from the non-ringfenced amount in the NRP Fund. The Commission also highlights that the budget proposal has higher mandatory minimum amounts of national contributions (co-financing) which, in its view, will create a larger financial volume for CAP support, though the precise impacts will depend on the relative shares of expenditure on interventions that require national contributions and those that do not. Overall, the total CAP budget in a Member State can go up or down (in nominal terms). The eventual amounts cannot be known until draft National Plans are submitted and approved, optimistically in 2027.'

Read what the Commission has to say: https://agriculture.ec.europa.eu/common-agricultural-policy/cap-overview/cap-post-2027-next-eu-budget_en#national-and-regional-partnership-plans

My personal view is that any formula is always subject to political bargaining which means that policy instruments become less attuned to their stated objectives.

At the end of the day it comes down to raw politics

Here are some extracts from the conclusions to an important post by Professor Alan Matthews on changes in CAP governance based on a recent conference presentation.   I certainly agree with his observation that these issues are ultimately political rather than technical but with such a complex policy one has to grasp the technicalities which he helps us to do.   His full analysis is here: https://capreform.eu/strategic-planning-in-the-new-cap/

The proposed NPRR and Performance Regulations represent a structural shift in CAP governance. By embedding agriculture within a horizontal EU performance framework, it moves oversight from predominantly ex post checks to a model combining ex ante compliance verification with real-time monitoring. This will require significant adaptation by Member States and CAP actors but offers the potential for earlier intervention, greater transparency, and stronger alignment with EU-wide objectives.

The fundamental question is whether the proposed changes make genuine strategic planning in the CAP more likely or not. Good strategic planning in the EU budget context requires that objectives are specific and clearly defined, measurable, achievable, relevant, and time-bound (SMART). It also requires that interventions are logically linked to these objectives through a coherent theory of change. Resources should be allocated in ways that reflect political priorities and trade-offs rather than institutional inertia.

Monitoring and evaluation should provide timely and credible evidence both for accountability and for course correction, while the system as a whole should allow learning and adaptation. Strategic planning is about much more than indicator reporting: it aligns objectives, resources, and accountability mechanisms.

Several limitations in the Commission proposal might be highlighted. I am not convinced that linking output and result indicators to intervention fields rather than specific objectives is a positive step. The CAP alone (including forestry) has 40 different intervention fields, and there are hundreds specified in Annex 1. This proliferation in the number of intervention fields is hardly conductive to making reasoned choices between strategic priorities. There is a danger of formalism, where indicator compliance substitutes for genuine strategic steering.

Ultimately, we must recognise that agricultural policy can never be reduced to solely technical considerations and trade-offs. Strategic planning will always be subject to political dictates. But a question for debate could be whether the proposed strategic planning framework for the CAP does as much as it could to align the incentives of Member States with the needs of the Union as a whole.  

What those affected think about Commission proposals on the CAP

If you're a real CAP buff, this material unearthed by Alan Matthews at TCD may be of interest.   It includes the latest version of proposals for the future of the CAP and the reactions of stakeholders: https://ec.europa.eu/transparency/expert-groups-register/screen/meetings/consult?lang=en&meetingId=63821&fromExpertGroups=3877

'Stakeholders' is common language these days, both in the Commission and in the UK, but we used to call them 'interests' which required us to be cautious about the neutrality of their views.

CAP budget may not shrink

Alan Matthews of TCD writes: 'We are still digesting the implications of the Commission's MFF and CAP proposals. In a new post (link in the comments) I present a more optimistic view of the likely size of the CAP budget under the Commission proposals (from the perspective of those in receipt of this support).

While most commentators (myself included) have argued that the proposal implied a reduction in the nominal size of CAP spending, I would now argue it is more plausible to assume that the nominal amount of EU spending on the CAP will remain unchanged from what it is today. There are both upsides and downsides to this forecast which I explore in the post. In the end, of course, it is how the money is spent rather than its absolute size which will determine the impact that it has.'

Read his full commentary here: https://capreform.eu/how-big-will-the-cap-budget-be-in-the-next-mff/

Can 25 year negotiation end with a Christmas present for Brussels?

Brussels is offering European farmers unprecedented guarantees that South American imports will not damage their livelihoods as it seeks to swing support behind its trade deal with the Mercosur bloc of economies.

The European Commission on Wednesday announced legal commitments to investigate any complaint by a member state that its agricultural sector is being damaged as it started the approval process for the EU’s biggest-ever formal free trade deal.

 European farmers in countries including France and Poland have pressured their governments to oppose the “cows for cars” pact with the Mercosur countries, which include Argentina, Brazil, Paraguay and Uruguay. Brussels wants to secure final approval for the deal by December as it seeks to replace US demand for its products after Donald Trump’s tariffs.

The pact would create a market of 700mn people and boost exports of EU industrial and agrifood products such as cheese and wine. It is expected to compensate for about a third of the export volumes the EU is forecast to lose after Brussels agreed to 15 per cent tariffs on most of the bloc’s exports to the US in July. 

French trade minister Laurent Saint-Martin said the “strengthened safeguard clause . . . is moving in the right direction”. He added: “France will now examine the proposal in detail to ensure the effectiveness of the mechanism.”  Italian Prime Minister Giorgia Meloni’s office said it would also assess the safeguards before “supporting or rejecting the final approval of the EU-Mercosur agreement”.

It would take at least four states with 35 per cent of the EU population to block the deal, which was struck last year after 25 years of talks. France’s commissioner, Stéphane Séjourné, told his colleagues at their weekly meeting on Wednesday that he had grave reservations that could be addressed only by a “robust safeguard clause”. 

The Commission said it would monitor imports of sensitive products such as beef, chicken and sugar from the South American countries. If they rise by 10 per cent or above — or prices fall 10 per cent below domestic levels — in any member state it will launch an investigation.

The Mercosur agreement allows for either side to suspend or reverse tariff liberalisation if they can prove it has caused injury to farmers, reflecting their continued political clout. Brussels is also expanding an emergency compensation fund that covers market disruption and weather damage to almost €1bn a year.

“We have a belt, we have braces and an insurance policy,” one senior EU official told the Financial Times. The EU estimates it will increase annual exports to Mercosur by up to 39 per cent, or €49bn, supporting more than 440,000 jobs across Europe.

EU agrifood exports to Mercosur are expected to grow by half through the reduction of tariffs on wine and spirits (by up to 35 per cent), chocolate (by 20 per cent) and olive oil (by 10 per cent). South American producers of 344 EU-protected foods such as feta cheese or Parma ham will not be able to use those names. 

However, Copa-Cogeca, which represents EU farmers, said the push to ratify the deal “is deeply damaging and sends yet another negative signal” to the agriculture sector. 

European industry groups issued support statements about the deal. Tariffs on some cars will drop from 35 per cent to zero through the agreement, helping European automakers at a time when they face 15 per levies in the US, their biggest market.

 “We fully support this. The EU has benefited greatly from markets opening up over decades,” Ola Källenius, the boss of Mercedes-Benz and president of the carmaker lobby group ACEA, told the Financial Times. John Clarke, a former commission official who helped negotiate the deal, said it would “eventually be agreed”. “Even France — at least the government — understands it’s a good deal. I and others have demonstrated that the deal will not impact much on European farming,” he told the Pink ‘Un.

Some French members of the European parliament have already said they would vote against the deal. The Greens will bring a case to the European Court of Justice claiming it breaks EU environmental policy. But Bernd Lange, chair of the assembly’s trade committee, still expected overall approval. “It will be a wonderful Christmas gift for the world that we can demonstrate trade can be based on a democratic constructive partnership,” Lange said.