Monday, November 29, 2010

The Commission stance

The final version of the Commission Communication on the CAP does not differ that much from the original leaked version. Some of the language has been watered down a bit, e.g., on the 'capping' of payments to large farms. Probably it is in there in the first place to give something that Britain and Germany will have to use up political capital on. It's an idea that has been around a long time, but is flawed in all sorts of ways.

The paper is a typical Commission compromise which pleases no one: reformers, farmers or environmentalists. However, no doubt the Commission would say that it offers a basis for an eventual settlement. In other words, EU politics is all about messy compromise and not about good policy. It's a realistic stance, but not a very politically attractive one if one hopes for visionary thinking from the EU (if anyone still does).

At the end of the day it is the discussions on the budget that will determine what sort of CAP we will have after 2013. It will probably somewhat greener; fairer in the distribution of income between member states; but still reliant on subsidy and protection.

Thursday, November 18, 2010

NFU criticises Commission paper

The European Commission has now issued its Communication on the future of the CAP and the NFU has made a critical response. It argues that the Commisson's proposals may entrench inefficiency rather than boosting competitiveness. It thinks that the Commission may have tried to please too many audiences, possibly leading to a rather incoherent document:

'Today’s future of CAP Communication has identified the challenges that European agriculture and the EU Common Agricultural Policy face over the next ten years. However the measures proposed in the EU Commission’s document are unlikely to help farmers rise to these challenges, the NFU has argued today.

The paper, which sets out the direction of the next reform of the CAP due to take place after 2013, describes the context for the next reform and argues that European agriculture must address concerns about food security, the environment, climate change and the economic viability of fragile areas. While these challenges are accurate, the NFU believes that the measures suggested in the paper to considerably reshape direct payments may harm the competitiveness of farming, as well as undermine efforts to simplify the CAP and make it more comprehensible to taxpayers.

NFU President Peter Kendall said that while these ideas come at a very early stage of the reform process it was difficult to take a firm judgment on the document.

“While today’s paper is not without good intentions or ideas, it does not appear to present the best approach to reform for the post 2013 period,” said Mr Kendall. “The proposals outlined in the paper are understandably general and will require considerable clarification.

“The Communication does provide a fair assessment of the economic, environmental and societal challenges facing farming and I am pleased that it recognises the importance of Europe to global food security and of farming to the economy, society and the environment. I am also pleased to see that the Commission supports the maintenance of a common European approach to agricultural policy.

“However when we set out our policy on the CAP in May we argued that any reform must be driven by core principles; commonality, market orientation, competitiveness and simplicity. It is against these principles that the proposals should be measured. When I look at ideas such as a tiered approach to payments, capping of support with labour adjustment and a significant flexibility measure, I tend to see a recipe for complexity, distortion and a risk of undermining efforts to help farmers become less reliant on support.

“This is the key long-term strategic challenge; to get farmers to a place where they can depend on the market for their income.

“We also must recognise the budgetary and political pressure the CAP will be under - and use the resources wisely. My worry is that the Commission’s proposals may actually entrench support and inefficiency in European farming rather than boost competitiveness.

“I believe that the Commission should build on the progressive direction of previous reforms, developing the two-pillar structure for the CAP and ensuring that each instrument has a clear objective – putting competitive agriculture at its heart.

“The Communication rightly dwells on the future of direct payments which, as the largest component of CAP spending, are a focal point for the next reform. However the complicated ideas from today confuse the role of direct support which should be about underpinning the economics of farm production and helping farmers deal with higher costs and volatility rather than delivering environmental goods. This is the role of rural development policies and I’m really surprised to see the Commission omit any reference to agri-environment schemes.

“I fear that the Commission has fallen into the trap of trying to please as many people as possible, in order to justify the money it spends, rather than adopting a clear direction for European agriculture. It is rare that a clear policy pleases all of the people all of the time but I fear that what we have here will end up as a confused proposal that suits no-one.”

This blog will provide further analysis and comment in the coming days, but at first sight the paper does not seem to differ greatly from the draft version leaked last month.

Monday, November 15, 2010

Greece criticised for 'systematic' cheating

The EU Court of Auditors has criticised Greece for 'systematic' cheating. Athens was criticised for overpaying farmers by €866m (£747m) over several years, including submitting false claims for pasture land subsidies when aerial photographs 'clearly show a significant density of trees and rocks.'

Although aerial photo checks on CAP claims became mandatory in 2009, the system in Greece was not still not fully operational in December 2009. Spot checks revealed that money had been paid out for land with 'different locations, different uses, different shape and perimeter' from thosee claimed by Greek farmers.

The auditors found that 'In Greece the bulk of administrative cross checks ... is carried out under a procedure that leaves no audit trail.' They found that Greece systematically calculated single farm payments incorectly.

Specific sums to be recovered from Greece include:

•€ 210.9 million charged to Greece for poor LPIS-GIS and deficiencies in on-the spot controls in respect of claim year 2006 for area-aids expenditure, including area-based rural development measures;

•€ 54.7 million charged to Greece with regard to dried grapes for reductions in the minimum yield, plot specialisation, ineffective vineyard register and weaknesses in scheme management and control for the financial years 2003-2007;

•€ 50.16 million charged to Greece for failure to reduce aid payments for non respect of veterinary requirements regarding the maintenance of sheep registers, for deficiencies in on-the-spot and administrative checks and for absence of specific risk criteria for Less Favoured Area additional premium controls;

Sunday, November 14, 2010

Aristos own a third of all land in England and Wales

Almost a third of all land in England and Wales is still owned by aristocrats who will receive substantial payments from the CAP. Wealthy people and their estates are thought to control about 20 million of the country's 60 million acres.

Research by Country Life found that 36,000 members of the Country Land and Business Association, whose members are mainly individuals and estates, collectively own half of all rural land in England and Wales.

The Forestry Commission is the country's biggest landowner, owning about 2.6m acres. It is followed by the National Trust which has 630,000 acres, while Defence Estates has 593,000 acres. Pension funds collectively control 550,000 acres.

Wednesday, November 10, 2010

Blow for farm policy reformers

CAP reformers have used the publication of detailed figures about who gets what under the farm policy to draw attention to the extent to which big companies and large-scale farmers are beneficiaries.

However, the drive for more transparency suffered a setback yesteday after the European Court of Justice ruled that publication of databases listing recipients of agricultural subsidies breached farmers' human rights. The ECJ struck down rules that make it compulsory for member states to identify all recipients of CAP money.

The court sided with German farmers behind the action. They argued that publishing the name, address and details of how much money an individual received on a website did not strike the right balance between promoting transparency and the beneficiary's right to privacy. Governments will no longer be able to list individual recipients of public money, but companies listing funds should still be listed.

Jack Thurston of, who has campaigned for the information to be made readily available, argued that disclosure of information was an important check against fraud and abuse, a perennial problem with the CAP. He commented that the decision went 'against the tide of public opinion, which is for ever more transparency and more accountability.'