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.

CAP reform proposals 'too complex'

The Court of Auditors has published a report arguing that the proposed CAP reforms are too complex and will not achieve the desired aim of simplification. They might not end the controversial practice of 'sofa farming'.

The Court recognises the efforts made by the Commission to simplify the provisions of the CAP and to address a number of observations made by the Parliament, the Council and the Court. However, the Court considers that the legislative framework of this policy remains too complex.

For example, six distinct layers of rules govern rural development expenditure. With respect to cross compliance, the Court considers that, in spite of the proposed reorganisation, the complexity of this policy continues to make it difficult for paying agencies and beneficiaries to administer.

In spite of the claim that it focuses on results, the policy remains fundamentally focussed on spending and controlling expenditure and therefore oriented more towards compliance than performance. In particular, the specific objectives of direct payments to farmers are not set out in the articles of the relevant regulation, nor are the expected results of those provisions or the type of indicators to be used to measure such results.

With respect to rural development, the Court has underlined the importance of setting out specific concrete objectives that the proposed measures are designed to achieve and of ensuring that support is targeted to rural areas where the aid is most needed. Similarly, the objectives and qualitative and quantitative results that are expected of the implementation of cross compliance obligations as well as of the ‘greening’ component of direct payments are not adequately laid down. The disclosure of such objectives would help focus the policy on delivering the desired results.

The Court has noted the Commission’s intention to direct CAP payments to “active farmers” and to achieve a more balanced distribution of direct payments among beneficiaries. However, the Court considers that the risk persists that payments may continue to be made to beneficiaries who do not exercise any agricultural activity. Furthermore, the Court notes that the redistribution effect of the reduction of the amount aid when such aid exceeds certain levels (“capping”) will be limited.

Furthermore, the Court has doubts as to whether some of these proposed measures can be implemented effectively without imposing an excessive administrative burden on national managing agencies and on farmers. As a way out of this difficulty, the Court suggests adopting a general and simple definition of what constitutes an “active farmer” and to entrust the Commission with the task of managing the implementation of the resulting legislation with a view to reaching the high level objectives set out in the Treaty. These objectives are to increase agricultural productivity as well as increasing the individual earnings of persons engaged in agriculture.

The Court notes that the Commission estimates that the proposed reform is likely to result in an increase of 15 per cent in the costs of managing the direct payment schemes which will be borne by Member States. The Court notes that no information is available on the extent to which such additional costs might be offset by increased management or policy efficiency.

Productionist move at Defra

Rural development programmes should place more emphasis on competitive agriculture and less on environmental considerations, according to new farm minister Jim Paice:
Rural development

In some respects this may be seen as a return to a MAFF-style productionism at Defra, even if the name of the department has not (yet) changed. However, it is often forgotten that there are three dimensions to sustainability: economic, social and environmental. What the balance should be between these is a matter for debate.

The biggest challenge facing Defra is the budget cuts that are going to hit it given the ring fencing of the NHS and lower than average cuts that are likely in defence and education. If it wasn't for coalition politics, one might wonder why Energy and Climate Change needs to be a separate ministry.

Into the lion's den

The Franco-British Council invited me to a large seminar in London yesterday on the Common Agricultural Policy. It was a very interesting day, although it was somewhat disconcerting to be asked questions in French about the policy from its defenders. Those present were a mix of academic and practitioners.

The meeting was conducted on Chatham House terms, but it gave an interesting indication of both current French and British thinking on the future of the CAP. Over the next week or so, I will reflect on some of the arguments put forward. The overall atmosphere was one of constructive dialogue, although one French speaker had to get in a dig about Britain not having learnt anything from BSE.

Much of the discussion focused on Pillar 2 issues in terms of rural development and how the CAP could be developed to meet the challenge of climate change. Indeed, one argument put forward from the British side was that the distinction between the pillars had become unhelpful and what was needed was a blended rural and environmental policy.

I wouldn't claim that the French participants necessarily bought into this, but I think there was an acceptance that there had to be debate about the underlying principles and goals of the CAP and without this one would not be able to arrive at better policy.