The CAP in review

The CAP will continue after Brexit, albeit with somewhat less money, but will needed changes be made, particularly in terms of 'greening'?   I give an overview here: https://www.europenowjournal.org/2020/11/09/the-common-agricultural-policy-an-overview/

This has attracted some attention on Twitter and I am grateful for the feedback received.   One comment was that 'Seems to suggest that nitrates have been addressed by the ND....if only that were true. There is large scale non compliance with the ND standards never mind the more ambitious water framework ones.' This is a fair criticism, I simply didn't have the word budget to deal with the issue in more depth.

I should have remembered that 'many years ago the OECD “Producer Subsidy Equivalent” was renamed the “Producer Support Estimate” because not all policy transfers are subsidies but some are payments for public goods.'

'Another quibble, but not so minor: at over 30% of its budget, EU expenditure on agriculture is called "substantial", because agriculture is only 1.6% of EU GDP. Unfair comparison: the whole EU budget itself is less than 2% of EU public expenditure.' I can see where this comment is coming from and it is not without validity, but agriculture still secures a disproportionate share of the EU budget.

Is the CAP less green?

Environmental NGOs argue that the increased flexibility given to member states by the last round of CAP reform has led many of them to reduce environmental spending, making the CAP less 'green' than it was: Greenwash?

Crop diversification measures have limited impact on farm income

The controversial crop diversification measures introduced in the last CAP reform have had a limited impact on farm income according to a new study: Crop diversification

However, individual farms may have been more substantially affected with some experiencing an income loss of as much as 10 per cent. However, it should be noted that only 38 per cent are farms are affected by the measure.

The NFU has complained about it a great deal in the UK and these figures question whether the measures are having much impact on their members. However, it may be that what was resented was what seen as an unnecessary intervention in farm level decision-making rather than any financial impacts.

Phil Hogan approved as commissioner

Phil Hogan has been approved as agriculture commissioner by a majority of over three to one in the European Parliament's Agriculture and Rural Development Committee. He was asked some awkward questions about his career in Irish politics, as well as some standard agricultural questions, but did not encounter the level of difficulty experienced by some candidates for commissioner roles: Phil Hogan

He said that he would review the CAP in 2016 after one year of the new policy mix with particular reference to direct payments and the arrangements on greening and ecological focus. However, he said that his immediate priority was responding to the Russian ban on the import of EU agricultural products.

Greening of CAP has been a failure

Researchers have suggested that the 'greening' of the CAP has been a failure. The latest version of the CAP is no greener than its predecessor and would fail a basic Advertising Standards Authority test in terms of its claims: No greening

The researchers conclude that it fails to encourage greater wildlife abundance or adequate protection for vulnerable habitats such as grasslands.

I would not wish to dispute the specific conclusions made. Policy instruments have often not been well designed and policy effectiveness insufficiently monitored. The sums of money available do not match the scale of the challenge, but have often not been well used.

However, one must beware of reducing environmental policy to the protection of biodiversity or landscape effects. Reducing water pollution from agricultural activities has been a key policy objective and some progress has been made. Climate change mitigation is surely the key objective, but little progress has been made, despite the contribution of modern agriculture to greenhouse gases.

Large farms may abandon basic payment

It is being reported that some large arable farms are considering abandoning the basic payment (the successor to the single farm payment) because of the 'three crop' rule: Three crops

I do think that this rule is a typical example in the CAP of a possibly laudable objective leading to a policy instrument that is deficient. It arose out of a desire to curb the landscape and biodiversity effects of monoculture. However, at one time there was an implicit view in the EU that some parts of member states would be farmed in a way that maximized productivity. Requiring farmers to grow three different crops undermines this and, in my view, is an unwarrantable intereference in their freedom to make their own commercial decisions. I would also question whether it really achieves that much in the way of 'greening'.

Whether farmers would give up the basic payment is an interesting quetion. It can be a very substantial amount for some large-scale arable farmers, but others receive relatively small sums. However, in many cases it is the difference between making a profit and making a loss. The real hope must be that some progress will be made in reducing the impact of this policy instrument.

What do we mean by food security?

Food security has been a dominant element in recent debates on agricultural policy, not least the recent discussions on CAP reform. But what do we actually understand by food security? There are a number of standard definitions out there, but in fact various actors interpret the term for their own purposes. An important article in Food Policy by Jeroen Candel, Gerard Breeman, Sabina Stiller and Catrien Termeer, identifies six different interpretations or 'framings'.

Not surprisingly, the productionist and environmental frames were dominant, accounting for nearly 70 per cent of uses. Anyone who has followed the CAP debate is familiar with the productionist frame. It is the stock in trade of those who advocate a 'business as usual', 'more of the same' CAP. As the authors note, it 'revolves around a story line that considers food security as one of the key goals of a future Common Agricultural Policy.' World food crises increase the salience of this frame.

The policy conclusion that is drawn is that the CAP should maintain 'a strong first pillar.' Agricultural production and productivity should be stimulated, 'and should be considered as a form of public goods provision, for which a financial compensation is justified.' [Needless to say, I think that this is a spurious argument, but it is certainly widely deployed].

Whilst the productionist frame is the dominant one, the environmental frame accounts for almost a third of all uses. This is of itself interesting as such a prominence would not have been achieved fifteen or twenty years ago and shows how the debate about the CAP has been 'greened'. The provision of environmental services is seen as an integral part of European food production and the emphasis is on long-term sustainability which cannot be achieved by the continuation of current policy.

Interestingly, the third most used frame is the regional one which shows how the notion of food security can be appropriated for a range of purposes. I see this as a very political frame in the sense of securing benefits for a particular set of actors. The argument here is to look after less developed regions which it is argued cannot produce at world market prices. Farmers in these regions perform an important function as caretakers of the countryside. The Scottish Highlands and Islands are a good example. Although a continuation of the CAP is supported, the present distribution of funds is seen as unfair.

The free trade frame argues that food security is best achieved by free trade. The development frame critiques the impact of the CAP on developing countries. The food sovereignty frame offers a radical critique of traditional conceptions of food security and focuses attention on people's right to food. Historically, notions of equity did feature in the debate in terms of closing the gap in the standard of living between rural and urban areas, but this framing covers both consumers and farmers and is underpinned by notions of global solidarity.

Interestingly, the European Commission uses multiple framings, invoking various frames simultaneously. My take would be that various interpretations of food security can be utilised to justify whatever line the Commission has chosen to take. The consequence, the authors argue, is that a clear vision of the relationship between the CAP and food security is lacking and policy makers may need to develop a more coherent vision [although I would add that CAP decision-making processes rarely facilitate clear strategic thinking].

Not only is this article a very useful, empirically based overview of how the term 'food security' has been used in policy debates, it also provokes thought about where we might go in the future.

A paradigm shift in CAP?

Gwilym Jones of the European Commission set out a vigorous defence of the CAP reforms at the Westminster Food and Nutrition Forum in London last week. He claimed that they represented a paradigm shift which would re-link farmers and citizens. It put farmers in greater control of their day-to-day economic choices.

Jones claimed that the greening measures were a game changer. They offered measures which protected soil, water and biodiversity (interestingly there was no reference to climate change.

One positive feature that Jones did draw attention to was that all payments to farms would be published, stating 'we have nothing to hide.' It remains to be seen what this move towards transparency means in practice and how accessible and reliable the data turns out to be.

Jones insisted that farming is different, asking what other industry faced exceptional weather events.

Chris Horseman of Agra Europe asked why decoupling had been put into reverse. Jones disagreed that this was the case, arguing that some sectors worked with very severe conditions, for example mountain areas. But this has always been the case and does not justify an extension of coupling.

CAP reform a dress rehearsal?

The CAP reform could simply be a dress rehearsal for a further reform, suggested David Baldock of the Institute for European Environmental Policy at a seminar of the Westminster Food and Nutrition Forum in London last week. The reform could serve as a means of showing which issues we had to get serious about. The reform had been a rush, it didn't have a finished feel about it. This was a widespread perception in Europe. What was needed was a credible mid-term review.

What was good about the reform was that the public goods idea survived in the CAP. It also couldn't be a one size fits all policy. On the downside, there had been a loss of the commitment to transparency and simplicity. There was a theoretical possibility of reverse modulation.

On the greening measures, it was quite difficult to see what was going to change on permanent pastures. The Ecological Focus Areas had changed greatly from original proposal. The idea covered much less than had been originally envisaged. Cross-compliance entailed a softening of the regime in some directions. Protecting carbon rich soils, the most innovative idea, had been lost.

The last Mid-Term Review was in the Fischler reforms and, as Baldock noted, the then Commissioner had created a platform and had worked to create relationships with heads of government and ministers. My question would be whether anyone around today possesses Fischler's adroit skills.

CAP reform deal struck

A deal has been struck in the trilogue process on CAP reform: Done deal. It has been made possible by passing some of the thorniest issues on to heads of government. There has also been a considerable watering down of the original greening proposals which were supposed to be the motif of this particular reform. The National Trust criticised the deal as a backward step: National Trust

NFU president Peter Kendall argued that the deal granted individual countries too much flexibility. It would result in a CAP that was less common, less market-oriented and more complicated. Of course, one of his concerns is that within England the Government will go for more market oriented policies while subsidies are enhanced elsewhere, leading to the absence of a level playing field.

One colleague said that she would now have to change her lecture on the CAP. She won't have to change that much.

Greening remains big issue in CAP talks

The general feeling from last week’s Farm Council and subsequent ComAgri meeting was that there needs to be more compromise from all sides in the forthcoming trilogue talks between the European Commission, Parliament and Council if they are to get the job done at the June 24-25 Farm Council as planned, reports Agra Europe

‘Greening’ remains one of the key talking points, with environmental groups again urging decision-makers not to ‘green-wash’ the CAP earlier this week, but many MEPs are still wary of the ‘double payment’ quandary should 30% of Pillar Two direct payments be linked to these measures.

Greening itself has not yet been tackled in the trilogues, yet EU Farm Commissioner Ciolos reiterated last week that an ‘equivalence’ system must be 'credible' and 'avoid double funding'. The measures must be 'clearly defined' and constitute a 'clear baseline' for Pillar Two agri-environment schemes, he added.

In England the concern among farmers is that Pillar Two measures will be maintained at the expense of the Single Farm Payment.

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.

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.

CAP reform assessed

Here is a thoughtful and detailed look at the CAP reform proposals from the slow food movement: Slow Food

In particular there is a detailed consideration of the greening proposals. Their general view is that the proposed reforms do contain some significant gains for sustainability.

Irish presidency searches for consensus

Monday’s Farm Council meeting in Brussels kicked off with Irish agriculture minister Simon Coveney reaffirming that his country’s Presidency’s 'ambitious' aim will be to reach a consensus among member states on a 2014-2020 CAP by March 18-19 this year, with European Parliament approval by June reports Agra Europe. He believes there are '30 or so' elements of the reform proposals still dividing member states, which he stressed was a 'manageable number', while EU Farm Commissioner Dacian Ciolos said the proposed timetable was 'difficult but not impossible' (which means that it probably is unattainable).

Coveney urged his fellow ministers to start moving from 'fixed' to 'compromise' positions so the Council can reach a common position. 'This hasn't happened yet and it needs to start happening now,' he warned, noting wide support for Dublin's work programme and the 'extraordinary' job by the Parliament's agriculture committee (ComAgri) to establish its negotiating position last week.

Ministers raised a number of lingering individual concerns at Monday’s meeting, notably the need to make the 'greening' requirements of the proposed reforms simple and workable and the risk to certain sectors posed by the planned equalisation of subsidies within member states or regions by 2019.

The plan to tie 30 per cent of direct payments to new environmental requirements - and for recognition of 'equivalent' measures - remains a big concern for many countries, with the Dutch delegation warning there is still 'a lot to do' at both a technical and political level. The UK, Denmark, Latvia, Estonia and Slovenia all reiterated calls for states to have more flexibility to implement greening, though French agriculture minister Stéphane Le Foll urged ministers to focus on reaching a compromise based on the Commission's proposals.

'Greening' remains controversial

Last week’s informal Farm Council meeting in Cyprus – the first since the summer break – reminded decision-makers that gaining consensus over the ‘greening’ requirements for direct payments is one of the biggest obstacles for CAP reform.

As Cypriot farm minister Sofoclis Aletraris admitted to Agra Europe at the meeting, while the greening of the CAP is a desire for all member states, the exact definition of what ‘greening’ means, or should mean, varies across the EU. Indeed, it's a bit like being in favour of motherhood and apple pie. No one is likely to argue for 'browning' the CAP, but the devil is in the detail.

One of the issues is the impact on profitability. The current chair of the EU Farm Council also admitted that greening will be a “tax” for farmers and that the final system must ensure that farming is still profitable to avoid people leaving the profession.

EU Farm Commissioner Dacian Ciolos insists that progress on reaching an agreement is being made and that the European Commission plan to link 30 per cent of farm income support to three EU-wide environmental requirements is now better understood by governments and farmers than it was before. That doesn't mean they like it any more and it has been my view that is a rather blunt instrument as a means of achieving environmental objectives.

Ciolos again defended the plan at the meeting and reiterated the EU executive’s offer of ‘equivalence’ − whereby a farmer involved in Pillar Two agri-environment/climate or national certification schemes would qualify for one or more greening requirements − to satisfy the many critics.

Greening is not a measure against increased production but rather a way of maintaining sustainable production in the medium-term by protecting water, soil and biodiversity, he argued.

There is an underlying tension here between economic and environmental sustainability. Reconciling them is not easy and arguably needs a more fine grained approach with more sophisticated policy instruments.

Green confusion

Agra Europe reports that support has been building in recent weeks for the idea of member states being offered a menu of options for the ‘greening’ of the CAP post-2013, with a majority of member states backing the plan. But EU farm commissioner Dacian Ciolos took the opportunity at last week’s Farm Council meeting to speak out against taking this route, pushing instead for the principle of greening ‘equivalence’.

Ciolos argued that if member states were allowed to effectively pick and choose which environmental actions would be eligible for the ‘greening’ component of the new direct aid scheme, there woud be a risk of creating an unequal state of affairs across the bloc. Some actions which certain member states may deem appropriate for their particular situation may be more or less ‘beneficial’ to the environment than those implemented in others, for example. An alternative view would be that such an approach is compatible with the notion of subsidiarity.

The proposed menu option, which also drew the ire of environmental groups last week, goes against Ciolos’s ideal that 'quality and consistency' should apply across the EU27 when it comes to the next CAP. The three EU-wide measures that the Commission is proposing for the ‘greening’ elements of the direct payment scheme might also be seen as fitting better with the Commission’s push for 'simplification' of the CAP.

This disagreement between the Commission and member states highlights the fact that the EU farm sector is not as united as the Commission no doubt hoped it would be at this stage. But with 27 diverse member states with differing climates, farmland types and political systems around the table – and against the backdrop of one of the worst financial crises Europe has ever seen - the Commission will almost certainly need to show some flexibility. Or to put it another way, there will have to be another messy and incoherent compromise in order to secure agreement.

These greening proposals have always been ill thought through in my view and risk a lose-lose outcome of damaging farm businesses whilst not helping the environment.

Hollande appoints farm minister

One of the first appointments made by President Hollande’s prime minister Jean-Marie Ayrault was to make current MEP Stéphane Le Foll the country’s new farm minister.

A close ally of Hollande, Le Foll’s appointment may prove to be an extremely shrewd move by the new French president as the Socialist MEP has been heavily involved in scrutinising the European Commission’s CAP reform proposals as part of the Parliament’s agriculture committee and is a substitute for the budget committee. I have seen Le Foll in action myself when I have given evidence to the agriculture committee and he is clearly very smart.

Le Foll has also authored a report calling for measures to help EU agriculture adapt to the effects of global warming. It is likely that he will push for a stronger ‘greening’ element at the CAP negotiating table, which will not please some British farmers, as well as a fairer distribution of aid among member states. Of course what is 'fair' is very much in the eye of the beholder.

Good objective, wrong means

Choosing the right policy instrument to achieve your policy goal is of central importance in designing and implementing an effective agricultural policy as I argued in an article in West European Politics in 2010:
Policy instruments

I am very much of the view that environmental policy needs to be embedded in the CAP, but one has to do this in a way that achieves ecological objectives without unnecessarily undermining production.

The Commission's notion of a 'balanced' rotation seems sensible on the surface. After all, farmers rotate their crops for agronomic reasons that have been understood for centuries, at least in principle.

Monocultures of wheat and oilseed rape (canola) crops have been becoming more extensive in Europe and they can have a landscape impact, although personally I quite like the yellow of oilseed rape.

Part of the Commission's motivation seems to be an idea that rotation would cut the pesticide bill, but there are other ways of doing that. It could also disproportionately hit farmers on heavy soil who rely on wheat/wheat/rape rotations.

The proposals require farmers to grow at least three different crops, with none exceeding 70 per cent of the total farm area and the third not less than 5 per cent.

Not only is this meddling in business decisions, it also could hit small farms very hard as only those below 3 hectares are excluded. Member states with many small arable farms may have something to say about this.

In the meantime the Commission really needs to send this proposal back to its Daft Ideas Department and return to the drawing board.

'Greening' measures prove controversial

The 'greening' measures proposed in the Commission's CAP reform plans attracted criticism from several countries at last week's Farm Council in Luxembourg.

Defra secretary Caroline Spelman argued that the measures to take 7 per cent of land out of production amounted to a return to set aside. There was too much focus on taking measures in Pillar 1 rather than proven approaches in Pillar 2: Pillars

The Commission maintains that the measures are aimed at marginal land, but it does seem to be a rather blunt policy instrument. Having said that, not everything done in Pillar 2 has been cost effective by any means.