EU budget discussions reach critical stage

Professor Alan Matthews looks critically at multi-year EU budget proposals which have reached the European Parliament: https://capreform.eu/europes-e1-8t-budget-fight-just-got-real/

Matthew notes: 'This calls for increased MFF expenditure of 55% in real terms compared to the current MFF (where the Commission proposes an increase of 41%, in both cases including repayment of the NGEU loan). I find increases of this magnitude implausible, raising the question where reductions in the Commission's budget proposal might be made. We will see the Council's opening gambit when the Cyprus Presidency submits the first version of the negotiating box with figures to the June meeting of the European Council.'

Farm lobby wins Parliament budget vote

Professor Alan Matthews reports on Linkedin: "The European Parliament has now voted in plenary (7 May) on its MFF resolution. The AGRI Committee through its Chair re-introduced amendments not previously accepted by the Budget Committee but which were accepted by plenary 381 votes to 245 for paragraph 29 and by 358 votes to 268 for paragraph 30.

Para 29 now "calls for an increased and dedicated budget for the CAP in the next MFF, safeguarding it from possible cuts" as well as calling for "additional dedicated funding sources to be explored where appropriate, including outside of the CAP, in order to cope with natural disasters and provide incentives to farmers and foresters to contribute to climate change mitigation, biodiversity recovery and nature protection, without measures causing a regression in EU agricultural production".

Para. 30 notes that "the CAP urgently needs an increased budget in the next MFF that is indexed to inflation through annual re-evaluation" and underlines that direct payments "should continue to strengthen income security, production and protection against price volatility, better targeting persons actively engaged in agricultural production and the provision of public goods, while respecting realistic and balanced EU environmental and social standards"  

This looks like a win for the farm lobby to me.

The continuing power of the farm lobby

Behind the scenes the agricultural lobby is a sprawling, complex machine with vast financial resources, deep political connections and a sophisticated network of legal and public relations experts, argues the Financial Times in a Big Read analysis. “The farm lobby has been one of the most successful lobbies in Europe in terms of relentlessly getting what they want over a very long time,” says Ariel Brunner, Europe director of non-governmental organisation BirdLife International.  Industry groups spend between €9.35mn and €11.54mn a year lobbying Brussels alone, according to a recent report by the Changing Markets Foundation, another NGO.

Food systems are responsible for between 21 and 37 per cent of greenhouse gas emissions depending on what is included, according to the Intergovernmental Panel on Climate Change. Over half of those emissions come from animal faming alone. Yet agriculture remains one of the last sectors in developed countries still to face binding limits on its carbon emissions. It is one of the few industries not covered in the EU’s emissions trading system, although proposals are under discussion.

The regular meetings between Copa-Cogeca, the umbrella body for farming unions and co-operative bodies across the EU, and the bloc’s officials show that the reach of the agribusiness lobby has been “institutionalised”, says BirdLife’s Brunner. Patrick Pagani, acting secretary-general of Copa-Cogeca, counters that lobbying is normal practice and “transparent” because the body publishes videos of its presidents’ main points.

Farmers in Europe say they are being strangled with red tape at a time when many are struggling with rising input costs following the Covid-19 pandemic and the war in Ukraine, which inflated energy and fertiliser prices. The EU’s Green Deal climate law, drafted in 2019, set out proposals to cut pesticide use and improve food systems, as well as reduce emissions from industrial-scale farms.

In the EU, lobby groups are already staking out positions ahead of the next major revision of the Common Agricultural Policy, which will take effect in 2028. The present iteration has been criticised by farmers for its attempts to tie payments to better environmental performance and cuts to pesticide usage. Following widespread protests, European Commission president Ursula von der Leyen has pledged that the next CAP will be “targeted” and find “the right balance between incentives, investments and regulation”.

Who benefits?

Research suggests that big farms and landowners reap far greater benefits from subsidy packages than small-scale growers, even though the latter are often the public face of lobbying efforts.

That has led to some tensions within the sector.  It has been suggested that the agricultural lobby “hijacked” the spring protests and put the emphasis on deregulation, which served the interest of the biggest industrial farms and agribusinesses, when the main concern of ordinary farmers was insufficient incomes.

FNSEA, France’s largest farming lobby has been accused of having ‘ no interest in securing income for farmers” but “a huge interest” in driving pesticide usage, because FNSEA is headed by Arnaud Rousseau, chair of agro-industrial company Avril.  At the EU level, Marion Picot, secretary-general of CEJA, the bloc’s main body for young farmers, says its members often feel drowned out by more dominant voices in Copa-Cogeca. “We are trying to make sure that young farmers are visible in other farming groups.”

In farm policy, it often seems that benefits go to those already doing well.

Alan Matthews sets out his views on the future of EU agripolicy in the light of the European Parliament elections here: https://www.europenowjournal.org/2024/08/15/thinking-the-future-of-agrifood-policy-in-light-of-the-eu-parliament-elections/

Crackdown on livestock farm emissions

Alan Matthews explains why extending the Industrial Emissions Directive to the most polluting livestock farms is justified.   It will be extended to large dairy and cattle farms and more pig and poultry farms.  Ammonia and methane emissions have fallen by very little since 2005.  The livestock sector is responsible for the majority of them: http://capreform.eu/regulating-the-most-polluting-livestock-farms-is-justified/

The proposal has attracted strong opposition in the European Parliament.

Food security prioritised over ecology

The majority of European Parliament agricultural committee rapporteurs want a new emphasis on food security even if it means watering down ecological focus areas: https://www.politico.eu/wp-content/uploads/2022/03/10/STAMPED_D20227683_Lins-Wojciechowski_Ukraine.pdf?utm_source=POLITICO.EU&utm_campaign=96260bf5c9-EMAIL_CAMPAIGN_2022_03_10_06_09&utm_medium=email&utm_term=0_10959edeb5-96260bf5c9-188948165

The green transition is certainly in danger and there is a risk of taking panic measures in current circumstances.   Measures to tackle climate change had their limits in the CAP anyway. Production and environmental protection need not be an 'either or' choice.

Big changes at ComAgri

With the extension of co-decision to agricultural policy by the Lisbon Treaty, the European Parliament's Agriculture and Rural Development Committee has become a much more important player in the decision-making process. It has tended to contain MEPs from agricultural and rural constituencies, or with interests in the sector, and in that sense has sometimes been a brake on reform, with the chair in 2009-14 insisting that the CAP budget be maintained in real terms with more money for farmers and more flexibility on how they spent this publicly funded largesse: Handouts

The committee's composition in the new Parliament has changed substantially, creating more uncertainty about its stance, although it will be chaired by the centre-right EPP. ComAgri’s political breakdown is based on the election results. The European People’s Party (EPP) came first so gets 13 of the 45 seats, with the Socialist and Democrats (S&D) next with nine seats and the other groups getting between three and five each.

A number of old hands who played key ComAgri roles in 2009-2014 are back, including former chair Paolo De Castro (S&D), Albert Dess (EPP) and Jim Nicholson (ECR). Notable absentees include ALDE’s George Lyon and the S&D’s Luis Manuel Capoulas Santos.

Of the 45 new ComAgri members, 23 were re-elected to the Parliament, of whom 20 sat on ComAgri in 2009-2014. New to ComAgri but not to the Parliament are Portugal’s Nuno Melo (EPP), the UK’s Richard Ashworth (ECR) and Dane Jens Rohde (ALDE). The other 22 are newly-elected to the Parliament. This reflects dramatic changes to the Parliament’s political make-up brought by the elections, with eurosceptic, anti-EU parties significantly increasing their MEP numbers – as well as some left-wing anti-EU parties.

The expanded Europe of Freedom and Direct Democracy (EFDD) group has increased its ComAgri representation from two to three MEPs. Back is Stuart Agnew from the UK’s Independence Party (UKIP), which wants the UK out of the EU altogether, but has a poor record of voting and committee attendance in the Parliament. UKIP's position is that UK farmers would then receive a version of what has been the Single Farm (to become Basic) Payment, but that it would be capped to limit the amount going to larger farmers, something the UK has always fought within the EU. Agnew is joined this time by Giulia Moi and Marco Zullo from Italy’s Five Star Movement – a populist party born out of a protest movement led by a comedian.

One of the three non-attached members, Edouard Ferrand, is from France’s far-right Front National, which increased its Parliament MEPs from three to 24. The FN is a critic of the CAP, lamenting the loss of control on farming decisions and arguing that the CAP has not helped agricultural earnings or done enough to protect French farming.

As for the Greens/EFA group, outspoken French MEP José Bové and German Martin Häusling are joined by new MEPs Bronis Ropé from Lithuania and Jordi Sebastià Talavera from Spain’s Compromis party. Bové was once involved in physically dismantling a MacDonalds that had set up in a cheese producing region and is a staunch opponent of GM.

The left-wing alliance GUE-NGL has four brand new MEPs on ComAgri. Two from Ireland – Matt Carthy and Luke ‘Ming’ Flanagan – are joined by Antje Anna Helena Hazekamp from the Netherlands’ Party for the Animals (PvdD) and Spain’s María Lidia Senra Rodríguez. We might expect more attempts to pursue animal protection issues.

Progress made on CAP reform deal

As is so often the case, these things go down to the wire, but it looks as if real progress is being made at last on a CAP reform deal. European Union farm ministers reached a revised negotiating position as the clock struck midnight on Tuesday, raising hopes that a new common agricultural policy will be agreed on Wednesday as talks moved to Brussels, reports Reuters.

'We now have a clear updated mandate ... There's lots of momentum here,' said Irish farm minister and Council chair Simon Coveney following two days of negotiations in Luxembourg.

However, Coveney admitted 'There are some difficult issues to resolve. I am not predicting it is going to be easy. It is not.' Issues that still need to be resolved include the deadline for abolishing EU sugar production quotas, which are blamed for pushing up domestic prices and limiting European sugar exports.

A key sticking point in talks could also be who makes the key decisions on issues such as market intervention, with the European Parliament wanting an increased role, something which ministers have been reluctant to accept. Coveney said no member state voted against the revised mandate, but Britain and Germany abstained on the European Parliament issue. Co-decision has already made it more difficult to achieve agreement.

CAP reform process hits new snags

Despite the relatively optimistic mood at the recent 'informal' Farm Council in Dublin, the CAP reform process has hit new snags which suggest that a deal may not be reached under the Irish presidency.It appears that a resolution to the EU’s CAP reform process could be delayed further beyond the end-of-June target date, after the European Parliament threatened to veto any deal over member states’ refusal to budge on certain issues, reports Agra Europe.

Parliament agriculture committee chair Paolo De Castro this week slammed the European Council for its approach to the recent ‘trilogue’ discussions on the issue, claiming their approach goes against the "spirit" of the Lisbon Treaty, which granted MEPs equal say on farm policy under the ‘Ordinary Legislative Procedure’. MEPs want to reach a deal by the end of June – when the Irish Presidency ends and the Lithuanian Presidency begins – but this will not happen unless all subjects are up for negotiation and the Parliament's views are heard, De Castro stressed in an impassioned speech this week.

De Castro is just the latest agriculture official to express his public frustration at the drawn out negotiations on CAP reform and perhaps calls into question the suitability of the co-decision procedure in reaching an agreement on this policy, something which has concerned me for some time.

Enhanced co-decision making has been defended as injecting greater legitimacy into the EU institutions, as directly elected MEPs should in theory increase the democratic input of European citizens, and thereby lead to improved legislation. But then according to one recent poll, over 50 per cent of British voters do not know they elect members of the European Parliament. In any case the process appears to have been the victim of growing euroscepticism across the bloc, as well as the austerity agendas of certain member states.

The CAP reform process appears to have hit a brick wall and unless there is a dramatic breakthrough at the ‘trilogue’ talks in the next couple of weeks, the Luxembourg Farm Council on June 24/25 – when it was hoped a CAP reform agreement would finally be signed, sealed and delivered – could turn into a damp squib. Some member states have said they may not even bother to turn up.

Parliament good for democracy but not for decision-making

The CAP is such an important part of what the EU does, not least in budgetary terms, that the European Parliament had to be made a decision-making partner if the institution is to mean anything in democratic terms. The downside is that it makes the whole process of arriving at an agreement on reform even messier and more complicated than it was before. Moreover, those most directly involved tend to represent farm interests. The end result is likely to be a reform package that is more incoherent than usual, and that is saying something.

After marathon talks in Brussels earlier this week, EU member state agriculture ministers finally came up with a CAP reform negotiating position, reports Agra Europe in what can rightly be seen as a significant step forward for the process. The Irish Presidency should be praised for its persistence in getting a deal between member states done halfway through its term in office and hopes are raised for a final deal to be set in stone before the end of June this year. 25 of the 27 states were in agreement after the meeting – Slovakia and Slovenia chose not to support it – and this is a strong mandate to take forward into trilogue talks with the Commission and Parliament.

Compromises were made on all of the major aspects of the policy including direct payments, the single CMO, Rural Development and Financing and Monitoring. However, it is apparent that the agreement will not put to bed the matter of CAP reform as many Parliament rapporteurs expressed dismay at many aspects of the Council position. The fact that the farm ministers did not rule out the possibility of ‘double funding’ for farmers 'destroys the legitimacy potential of greening,' according to the Parliament's rapporteur on direct payments post-2013, MEP Luis Manuel Capoulas Santos.

Agriculture Commissioner Ciolos meanwhile said he is 'delighted a clear consensus exists for 30% of direct payments to be linked to a more sustainable CAP'. The greening measures would be of a 'mandatory' nature under Council's stance as, penalties for non-compliance would go beyond 30 per cent of the Pillar One subsidy, he stressed. Yet Italian centre-right MEP Giovanni La Via, the Parliament's rapporteur on the 'Horizontal' Regulation, claimed losing the greening component of payments would be 'a high enough penalty' for farmers not complying with the new requirements. In other words, he wants to water it down.

Paolo De Castro, the Parliament's agriculture committee chairperson, probably summed up best the current state of affairs. 'There are some areas where the Council followed the Parliament's lead and others where we will have to negotiate intensively,' he said. The ‘intensive’ trilogue talks between the European Council, European Commission and European Parliament are provisionally due to kick off in early April with a hectic schedule of meetings between then and the end of June, when it is hoped a final agreement will have been thrashed out. What sort of agreement it will be remains to be seen, but one fears that it will be watered down.

Parliament has its say

The European Parliament has had its say on the CAP reform process and, as predicted by Agra Europe last week, has largely backed the amendments proposed by its agriculture committee (ComAgri). The majority of MEPs backed the four ComAgri positions on direct payments, rural development, financing and market measures as the momentum towards a final agreement, potentially within the timeframe of the current Irish Presidency, gathers pace.

However, some hurdles remain. The Parliament vote largely proved that there is still work to be done before a deal that satisfies all member states can be reached. Parliament did back a number of key aspects of the Commission proposals such as the ‘capping’ of Pillar One payments as well as its plans on ‘active farmers’. 'Capping' would have implications for UK farmers in particular, a number of whom operate on a large scale.

Key vote in European Parliament on CAP

Next week, the European Parliament will get to vote on CAP reform and the compromises agreed by its agriculture committee (ComAgri) back in January. It would seem to be the opinion of the majority within European agricultural circles that some form of consensus will need to be found at the vote if the CAP is to be reformed in time for 2014, reports Agra Europe.

But what are the chances of an agreement being reached? There are still a number of hurdles to be overcome if a deal between member states is to be reached. The biggest sticking points appear to be over the ‘greening’ of the CAP and what this should constitute, the capping of direct payments, the speed at which the EU should oversee the convergence of Pillar One payments between member states and the scope of coupled aid.

ComAgri chairman Paolo De Castro says next week’s plenary will provide MEPs with the opportunity to ‘fix’ the problems with the CAP reform process. He conceded that his committee may have made some 'mistakes' when adopting its position earlier this year but the vote will provide the opportunity to write these wrongs. Meanwhile, other MEPs, such as German European People's Party member Elisabeth Jeggle have told Agra Europe that many of her colleagues will side with the ComAgri compromises next week.

Is a CAP deal possible?

The next key phase of the CAP negotiations occur in the context of the budget negotiations at the EU summit on 6/7 February with spending on agriculture remaining a major stumbling block. A further summit is due in mid-March. The Irish presidency needs a deal on the budget agreed by the Council and Parliament by the end of March if it is to have any hope of securing a substantive CAP deal by the end of June

The recent vote in the European Parliament agriculture committee was a first step towards a CAP deal, although if it doesn't like what eventually emerges then the Parliament can veto it. It should be noted that the committee backed capping of support at £250,000 with payments reducing on a sliding scale after £125,000 which will hit many farms in the UK.

Some are concerned that the proposed extension of discretion to member states (and regional governments) in many areas of the CAP will create more of an uneven playing field, undermining the single market. Others would argue that such discretion is not only necessary to make reform politically palatable, but also reflects the geographical diversity and range of challenges encountered in what will soon be an entity with 28 member states with very different agricultures.

'Could do better' is end of term report

As 2012 draws to a close and the Cypriot EU Presidency concludes, agriculture ministers and MEPs across the 27 member states took time this week to reflect on how CAP reform negotiations have gone over the past six months.

Agra Europe reports that there was a general feeling of satisfaction that significant progress has been made but also the admission that much work still needs to be done in the coming six months under the Irish Presidency.

On Tuesday, ComAgri announced that from the near 8 000 amendments to the European Commission’s CAP reform proposals sought by member states, the total has now been whittled down to just 100 compromise agreements, which will be voted on in January. A final vote will only take place once the EU’s next long-term budget has been agreed (likely to be early February, 2013).

The outgoing Cypriot Presidency released its progress report on its six months in charge of CAP reform, praising the 'positive spirit' of the negotiations over the period, but observers would still probably come away with a nagging feeling of ‘must try harder’.

As Irish farm minister Simon Coveney reiterated, 'nothing is agreed until everything is agreed,' admitting it would be a 'big ask' to get a CAP deal by June, which is widely seen as the deadline if parts of the new policy will be ready for 2014.

Many ministers were openly frustrated at the lack of progress on the EU’s 2014-2020 budget, which is undoubtedly the major hurdle for the reform of the CAP. Of course, the amount spend on the CAP is a hurdle in the way of a budget agreement in the eyes of some member states, not least the UK. Beyond that there are still obviously problems to be ironed out with the ‘greening’ element of the proposals as well as questions about the plan for the internal convergence of direct payments. What that means is that some get more, but perhaps not as much as they hoped for, and others get less. That's never an easy balance to draw.

Parliament delays CAP reform process

The decision by the European Parliament’s agriculture committee (ComAgri) to delay a vote on laying out its official position on CAP reform until the beginning of next year once again brings into question whether an agreement can be made in time for the new policy to be implemented by the start of 2014. Indeed, for some time I have thought this very unlikely.

Although an official date for the vote was never set, it was generally considered that one would need to take place either this month or next in order for the Farm Council to have enough time to reach a consensus on its own reform package, and then for ‘trilogue’ talks to be held between EU institutions that will finally result in an agreement for the 2014-2020 CAP budget, reports Agra Europe.

MEPs have made it clear that they will not be pushed into approving the next CAP until the EU’s next long term budget is in place and the generally negative feedback from the Cypriot Presidency’s recent proposal to shave €7 billion off the bloc’s multiannual financial framework (MFF) for 2014-2020 is not an encouraging sign that heads of state will come to a firm agreement by the end of the crunch summit on November 22-23.

Those calling for a freeze or cut in real terms to the EU budget will have seized on the recent European Court of Auditors report, which again found that large sums of budget funds in 2011 were misspent, with rural development spending coming in for particular criticism. This is likely to increase the vulnerability of this form of expenditure to cutbacks given the importance of the single farm payments to the revenue streams of most farmers.

With austerity biting across the EU, and distrust in the institutions growing among the electorate, particularly in the UK, it must now be time for the European Commission to push through improved measures of accountability and transparency on how funds are being spent.

Nicosia gets the thumbs down from all sides

It isn't easy being a small state and holding the presidency of the EU, especially when you have to make proposals about the future of the CAP. Cyprus has ended up being attacked from all sides for its suggestions for a way forward on the CAP budget.

The Cypriot EU Presidency’s proposal to cut EU spending by €50 billion as compared with the Commission’s original proposal in the 2014-2020 period, including a €7bn reduction to the CAP budget, has been categorically dismissed by those on both sides of the budget debate – those who want to see an increase, and those pressing for bigger cuts, reports Agra Europe.

Nicosia has suggested reducing spending on CAP direct aid payments and market measures over the seven years from the €283.05bn tabled by the Commission to a maximum of €277.40bn, a cut of just over 2%. The Presidency also suggested reducing the EU average level of direct payments per hectare by at least 0.27% a year between 2015 and 2020, which would trim the proposed overall expenditure on direct payments in 2014-2020 by 1.3%.

The EU's rural development budget - used to co-finance national programmes - would go from €91.97 to €90.82bn, a 1.3% cut, under the Presidency's revised version of the 'negotiating box' for the multiannual financial framework (MFF). My hunch is that, unfortunately, this is where the brunt of the cuts will eventually fall. It only benefits some farmers and there are transaction costs in accessing it.

France has threatened to veto any deal that will result in a cut to the budget for agriculture, with farming groups across the continent calling for nothing less drastic than a CAP budget freeze. The European Parliament, which has also called for a freezing of the CAP budget, slammed the Cyprus Presidency's plan and claimed its voice has not been heard.

The proposal 'sends out a bad signal' and 'will inevitably put in jeopardy the future of certain key policies and programmes,' according to the Parliament's lead negotiators Reimer Boege and Ivailo Kalfin.

France and Germany recently backed the European Commission’s proposals to freeze the 2014-2020 CAP budget at 2013 levels in nominal terms – a reduction in real terms - and have subsequently found support from some of the usual suspects: Spain, Italy and Ireland among others.

On the other side of the debate, the old reformist coalition of the UK, Sweden and the Netherlands are pushing for cutbacks across all areas, including the CAP. This week the UK government, again backed by Sweden, argued that the Presidency proposals for a €50bn cut to EU spending 'don't go far enough' and that the figures are 'still way too high'.

Essentially Europe is split between, on the one hand, those 10 net payers to the EU budget, such as the UK, the Netherlands, Sweden, Denmark and Finland, who put more into the kitty than they get out, and on the other the 17 net recipient member states who mostly want to see an increase of at least five per cent. For all the talk of solidarity, it comes down to what you pay in and what you get out.

The net payers cannot justify an increase as it runs contrary to what they see as the severe economic reality currently gripping Europe. But the net recipients argue that growth and development across the bloc will be severely hampered unless struggling countries get the additional help they need. That may be so, but giving that help to agriculture is not the best way to boost growth and employment.

France and Germany do their deal

Long-term observers of the CAP know that any agreement between France and Germany can often shape the direction of the reform process. Even with many more member states, this still remains true. Earlier this week the two countries issued a joint statement calling for a freeze at 2013 levels in nominal terms Agreement

Calls for a nominal freeze in the budget, which will still mean a decline in real terms, have been growing in recent months and around half of governments voiced their support for the Commission plan at a General Affairs Council late last month.

The country’s two agriculture ministers – France’s Stéphane Le Foll (rather superior and disdainful in a typical French mode) and German counterpart Ilse Aigner – came to the agreement after meeting in Berlin. They cited the 'importance of the CAP for growth, employment and the environment and innovation in rural areas along with Europe's role in ensuring food security worldwide', in their statement. In other words, the traditional rather general but fine sounding justifications of a dysfunctional policy.

Their rejection of any reduction in Pillar One allocations was also notable taking into consideration the fact that Germany is the biggest contributor to EU funds, while France is the biggest beneficiary of direct aid payments. Germany and France join the likes of Austria, Belgium, Finland, Greece, Ireland, Luxembourg, Malta, Portugal, Romania and Spain in opposing cuts, leaving member states such as the UK, Netherlands and Sweden seeking a more austere budget with a reduced prospect of success.

Of course, British prime minister Dave Cameron is under heavy pressure from within his own party to take a tough line in budget negotiations. Indeed, Dave is no fan of the EU and reflects the traditional British distaste for the CAP in particular. Vetoing the budget would go down well at home, but it would also mean that the EU would revert to annual budgets determined by qualified majority voting, reduced the influence of Britain and its allies.

Meanwhile for an authoritative account of tensions between member states and the European Parliament over the CAP, this blog post by Christilla Roderer-Rynning is recommended: Parliament

Is the complexity deliberate?

For all the talk of a drive towards simplification, complexity is a built in feature of the Common Agricultural Policy. It makes it more difficult for critics to assess what the real effects of decisions are. It becomes more challenging to mount a sustained and informed critique.

Bringing agriculture into the co-decision mechanism at the European Parliament was unavoidable given that it was a supposed boost to democracy, but an alternative narrative would be that it gave more opportunities for special interests to defend the status quo.

MEPs have tabled no less than 7,415 amendments to the proposed 2014 reform of the CAP before departing for their long summer recess. It will take until September just to translate them.

With 2,292 amendments on direct payments to farmers alone, changes are proposed to almost every part of the Commission's proposals. There are those who wonder whether the sheer volume of amendments is a deliberate strategy on the part of some member states to defend the status quo. France, Germany and Italy come to mind.

It is going to be difficult to complete the reform process on time. Moreover, what was a less than radical reform in the first place is going to be watered down even further.

Completing CAP reform on time

In this week’s issue of Agra Europe, editorial director Chris Horseman, who is one of the most experienced and knowledgeable observers of the CAP, suggests that the deadline of January 1, 2014 for the new CAP could be missed unless EU leaders can conclude the Multiannual Financial Framework negotiations by the end of this year.

Horseman argues that the crux of the problem is the fact that MEPs have taken the view that they are not in a position to pass judgement on how CAP spending should be allocated in 2014-2020 if they do not know how much overall spending will be available. Therefore, the need for their Council counterparts to agree a financial framework to provide funds for the Single Farm Payment system becomes an imperative.

However keen the European Commission may be to keep the negotiations on the reform of the CAP and on the future MFF technically separate, the two issues are politically inseparable, Horseman says, before exploring the ramifications and potential scenarios instigated by the deadline for CAP reform being missed.

It has been my view for some time that the deadline would be missed and that January 2015 was a more likely date. It has also been my view that the involvement of the European Parliament would slow down the process and make reform more difficult to achieve. The requirements of a democratic process mean that it should be involved, but the effect on outcomes may be less desirable.

The crux of the issue is that when European domestic governments are practising austerity, and are likely to do for some time to come whatever the calls for a growth strategy, it becomes increasingly difficult to justify the share of the EU budget devoted to the CAP. There is a high 'opportunity cost' in terms of money that could be spent on infrastructure projects that would help employment and research and development that would enhance Europe's flagging competitiveness.

Even within the farm budget there is a strong case for spending more on applied research which would help European agriculture to meet food security challenges in a sustainable way much more than blanket subsidies.

Green space controversy grows

The controversy over the so-called 'Green Space' in the CAP reform proposals is growing: Green Space

A somewhat embattled farm commissioner, Dacian Ciolos, is insistent that the proposals do not amount to set aside. As farm as farm organizations are concerned, if it walks like a duck and talks like a duck ...

The farm lobby is up in arms over this proposal and are citing food security arguments advanced by the G20. However, this is not a straightforward food security/productionism versus the environment argument. I am concerned that the Commission has devised a rather blunt policy instrument that would not be very effective in achieving its objectives and would have too many unintended consequences.

Admittedly some of the more subtle policy instruments in Pillar 2 have not always worked well in terms of additionality, i.e., achieving something that would not have been achieved without spending public money. Devising policy instruments that make a difference without too many side costs is not easy, but the effort needs to continue.

The linked report also refers to the enhanced role of the European Parliament in the decision-making process. This may be an advance for democracy, but not necessarily for coherent policies and effective reform.

MEPs side with Commission

MEPs on the Agriculture Committee have sided with the Commission over the question of scaling farm payments so that bigger farms receive less: Scaling .

Such an idea has always been unpalatable to Britain, Germany and the Czech Republic which have a disproportionate share of larger farms. It was rejected by the Farm Council earlier this year, but farm commissioner Dacian Ciolos has continued to favour it. It has never been clear how practical it is, given that a farming business could be constituted as single different legal entities.

The MEPs assumed that the farm budget will remain the same as it is now. The CAP has some stout defenders but in a time of austerity and with many competing uses for the available funds, it is difficult to see some cutback being avoided. The MEPs also favoured the 'greening' of the policy but it is often Pillar 2 schemes that suffer when the budget has to be cut.

Of course, cutting back payments to larger farms would give some headway in the budget, but not that much. Underlying all this is the perpetual muddle about what the priority ordering of CAP objectives is, but in practice fostering an efficient and competitive European agriculture (which is what most larger farms do) often loses out.