Farmers welcome EU shift of tone but want more money

Farmers' lobby COPA/COGECA has given a broad welcome to a new Commission document on the CAP, but argues that more funding is needed to realise the vision.

The Commission's statement on the roadmap is here: https://ec.europa.eu/commission/presscorner/detail/en/ip_25_530

The farmers state: 'Today, the European Commission unveiled a key communication, long trailed by Ursula von der Leyen, outlining the EU’s vision for agriculture and food policy. This roadmap represents a pragmatic reset based on relevant analysis and grounded observations and proposes an ambitious catalog of future work strands. However, it fails to address the elephant in the room: the future CAP budget and the resources needed to finance this package of measures.

In its assessment of the current situation, the Commission appears to have regained its bearings in agricultural policy and is now speaking a different language. The importance of agriculture—its role and vulnerabilities—within the current geopolitical context is now fully acknowledged. Commissioner Hansen’s approach rightly repositions agriculture as a key strategic asset and a pillar of European sovereignty. Farmers are also recognized as entrepreneurs and innovators who play a crucial role in addressing climate challenges, protecting the environment, supporting the bioeconomy, and contributing to society as a whole. The Commission has also correctly diagnosed the sector’s demographic and economic fragilities, bringing the issues of farm income, competitiveness, innovation, cooperation and generational renewal back to the fore.

Political will, starting with a focus on simplification, also forms part of the picture. We welcome the need for stricter alignment of production standards for imported goods, particularly concerning plant protection products and animal welfare based on stronger and more comprehensive impact assessments, which should be published prior to any major trade decisions. The principle of ‘no bans without viable alternatives’ for plant protection products is explicitly stated, as is the need for a renewed approach toward the livestock sector.

Yet despite these positive elements, today’s announcement misses a fundamental part of the equation. In the current context, it is impossible to ignore the ongoing debate over CAP financing in the next Multiannual Financial Framework (MFF). Last week, Copa Cogeca warned of the dangers of merging funds and establishing single budgetary national plans. However, today’s vision makes no mention of the CAP budget and references to the second pillar and its funding are simply absent from the final version of the communication. The complementarity between the EAGF delivering on support and the EAFRD facilitating multiannual measures and investment is crucial for the sector and must be maintained.

Let’s be clear: ambitions and proposals will amount to little without a robust CAP. One which supports active farmers - regardless the size - and is backed by an increased budget in the post-2027 MFF. This budget must include automatic corrections for inflation and the growing responsibilities placed on agriculture. Without this, Europe’s farming communities will face significant challenges, and the vision for the sector’s future risks becoming a hollow promise.

How do we get older farmers to exit in favour of younger ones?

Generational renewal in agriculture is a hot topic in Brussels (and in the UK in the context of the APR debate) and Alan Matthews summarises his views given in a recent submission to a Commission looking into the topic in Ireland: http://capreform.eu/addressing-generational-renewal-the-situation-in-ireland/

He concludes: 'allocating yet more funding to young farmer measures mainly provides support to those who have already succeeded in entering the farming profession. There is mixed evidence on the extent to which it actually allows or facilitates more young people to enter farming. Here the principal barrier is gaining access to land, and this requires the exit of older farmers. Without giving a clear financial incentive for earlier transfer, the generational imbalance between young and old farmers will hardly improve.'

Future pathways for the CAP

An important report on the next reform of the CAP has been produced for the European Parliament Agri Committee: https://www.europarl.europa.eu/RegData/etudes/STUD/2025/759316/CASP_STU(2025)759316_EN.pdf

The report notes: 'The European agri-food system is facing an increasing number of challenges. Most of these challenges were already present when the current CAP was discussed. Other challenges, such as global food security on the European continent and the autonomy of European agriculture, have been put back on the agenda due to the Covid-19 crisis, the war in Ukraine, world geopolitical tensions and agricultural protests.'

The report helpfully distinguishes five future pathways: Within the two “production” pathways (Pathways A and B), there is a second trade-off between Pathway A (Intensification and exports)based on price competitiveness and Pathway B (Support for all types of farms)which aims at maintaining productive capacity by supporting farm incomes for all types of farms Within the three “climate and environment pathways, Pathway C (Resource use efficiency through the optimisation of current production systems), contrasts with Pathways D and E, which require much more profound changes (land-sparing for Pathway D vs land-sharing/agro-ecology for Pathway E).

The report comments: 'The dominance of transnational companies in food value chains is high and increasing (Howard, 2016). Industrial concentration is very high in the global agricultural commodity market, agri-food industries and farm input suppliers(seeds, pesticides, farm equipment, etc.). Multinational firms have a strong incentive to lobby against measures at the EU border.'

The report also notes: 'The growth in the economic power of multinational companies gives them increasing power over political processes. Interest groups that are financially and politically powerful are able to discredit their rivals on policy decisions (see, for example, Oreskes and Conway, 2010). The EU and MSs should strengthen the rules on the integrity and transparency of lobbying to improve the trade policy-making process.'

The usual suspects continue to subsidise

The OECD Agricultural Policy Monitoring and Evaluation Outlook 2024 has just been published and provides a comprehensive analysis and global reference on government support to agriculture across 54 countries, which shows that total support to agriculture averaged USD 842 billion per year during the 2021-23 period.

Support remains concentrated in a few large economies, with China, the United States, India and the European Union representing 37%, 15%, 14% and 13% of the total respectively. Although public support for agriculture has declined since 2021 it remains near historic highs and is still not sufficiently directed at critical innovation, productivity and sustainability goals, according to a new report from the OECD.

In this context, the share of estimated support dedicated to general services such as innovation, biosecurity or infrastructure averaged only 12.6% of total support in 2021-23. While it has been fairly stable since 2020, this share is well below the 16% seen at the beginning of the 21st century. These services are key elements in countries’ efforts towards sustainable productivity growth – the ability to produce more with less while reducing demands on the environment.https://doi.org10.1787/74da57ed-en

Why Mercosur deal concerns EU farmers

The EU deal with Merocsur has not gone down well with European farmers and this analysis refers to some of their concerns as well as the drivers of the deal: https://ukandeu.ac.uk/eu-and-mercosur-bloc-breakthrough/?mc_cid=60623adc76&mc_eid=a47fa58ca7

New EU farm supremo sets out his stall

The EU’s new agriculture chief is pushing for more of the bloc’s generous subsidies to be doled out to low-income farmers rather than big agribusinesses. Christophe Hansen told the Financial Times that the seven-year €387bn Common Agricultural Policy (CAP) should no longer reward the biggest landowners and instead focus on small farms, as discussions get under way on the bloc’s finances for the next decade.

[This, then, is a move towards treating the CAP as a welfare payment, but it is not an efficient instrument for delivering such payments.   What about international competitiveness and efficiency?]

 “We all know that the CAP budget will not be higher,” he said. “There is a lot of pressure because we have a lot of political priorities in the European Union so we need to better target the support to those most in need.”

The new EU commissioner, who took office on December 1, said his reform of CAP would not amount to a “revolution” and would not move “entirely” away from hectare-based payments. But changing the allocation would constitute the most significant overhaul in the history of the 62-year-old subsidy programme, which represents a third of the bloc’s annual budget.

The largest farms in the bloc have traditionally received most of the funding, with an analysis by the Institute for European Environmental Policy, a Brussels-based think-tank, estimating about 80 per cent of the direct payments go to roughly 20 per cent of farms.   [My view is that this is a lazy application of the Pareto rule and the actual figure is lower].

 Nearly 6mn farmers and landowners received direct payments in 2022, according to the European Commission. Discussions around the next EU multi-annual budget, which is due to run from 2028, have shifted towards a much greater focus on defence spending in recent months in response to Russia’s invasion of Ukraine and Donald Trump’s return to the White House. The US president-elect has threatened to pull out of Nato if allies refuse to spend more on the military.

Any CAP reduction will be met with fierce resistance from farmers who took to the streets of Brussels and other European capitals last year to protest against stringent environmental regulations, red tape and unfair prices. European Commission president Ursula von der Leyen in September vowed to ensure farmers receive “fair and sufficient income” and preserve farming amid financial and environmental pressures. Hansen, a centre-right Luxembourgish politician, said the commission should encourage farmers to look at “alternative income” streams.   [Historically there has been a suspicion that farm commissioners from Luxembourg are susceptible to French pressure].

While “producing and selling a tomato” was good, “it makes you vulnerable because it’s your only income”, Hansen told the Pinl ‘Un. Farmers could grow crops for biofuels or use their land for solar panels and other renewable energy sources. Planting trees that could be monetised as carbon credits should also be considered, he said.   [Farmers in the UK have been diversifying for decades].

Part of the commission’s response to the protests was to water down environmental standards that farmers were required to meet in order to access CAP support, despite widespread outcry from green groups. Von der Leyen on Tuesday is set to put forward further measures aimed at helping farmers sell their products at a better price.

The proposals, if agreed by EU lawmakers and member states, will make written contracts between farmers and food companies mandatory and allow more co-operation between national authorities to manage cross-border disputes.

Hansen said he also intended to ease competition rules to promote products from young farmers and require greater transparency in retail pricing. “Big retailers use certain products to attract the consumers and they use the weak position of the farmers in the supply chain,” he said. Christel Delberghe, director-general of the retail industry body EuroCommerce, said introducing stricter pricing rules would result in “inflation. What else?”

[Farmers in the UK have certainly been turned into price takers by supermarkets, but changing the balance of power is not easy because consumers demand cheap food]. 

The limits of Dutch lessons for farmer protests

This article by a political scientist looks at the impact of farmer protests in the Netherlands and their implications for the UK: https://ukandeu.ac.uk/farmer-protests-lessons-from-the-netherlands/?mc_cid=6bb3292f21&mc_eid=a47fa58ca7

What it doesn't mention is that the Netherlands has a very pure system of proportional representation which makes it easy for insurgent parties with a narrow support base to win legislative seats.

Doing the Brexit walk

In a thorough and authoritative analysis, Alan Matthews examines the repurposing of the English agricultural budget since Brexit, noting that the only other developed country to attempt such extensive changes is New Zealand: http://capreform.eu/agricultural-policy-reform-in-england-and-the-2024-uk-budget/

There has been a much greater reallocation to agri-environmental funds in England than in the CAP.

Benelux countries increase net contributions to CAP

Alan Matthews takes a look at net contributions to the CAP: http://capreform.eu/how-net-balances-might-influence-member-state-views-on-the-size-of-the-next-cap-budget/

He notes: 'Instead of the smooth transition from the largest net contributors to the largest net recipients as we move from left to right [on the chart], the general picture is now more jagged even if the general pattern is maintained.

The two smallest Member States, Luxembourg and Malta, with relatively limited agricultural area relative to the rest of their economies, now appear as the largest net contributors in relative terms.

More significant in economic terms is that, despite the huge significance of Germany’s absolute net contribution to the CAP, in relative terms the contribution of the Netherlands and Belgium is even greater.'

New farm commissioner in EU

The outgoing EU agriculture commissioner reviews his five years in office which appear to be ones of problem free achievement: https://agriculture.ec.europa.eu/common-agricultural-policy/cap-overview/highlights-2019-24_en?s=09

The new commissioner, Christophe Hansen, is from Luxembourg, often perceived to be amenable to French concerns.  Food has been added to his portfolio, but animal welfare goes to health.   His biography is here: https://commission.europa.eu/document/download/1af2336d-a010-4ac0-b8de-81a23772a5ac_en?filename=CV%20Hansen.pdf

In 100 days he has to produce a vision for agriculture and food, so good luck with that.

Agriculture needs to cut emissions

The EU’s chief climate scientist has warned that the bloc will miss its climate targets if it does not force the agricultural sector to pay for its greenhouse gas emissions. Ottmar Edenhofer, chair of the European Scientific Advisory Board on Climate Change, told the Financial Times that it would be “almost impossible” to achieve the European Commission’s proposed aim of cutting emissions by 90 per cent by 2040 without a levy on agricultural emissions.

 “[Over] the last 15 years, the emissions in the agriculture sector remained quite stable,” Edenhofer said, while other sectors had cut their climate impact. “The price signal is important because without the price signal, it is very unlikely that, basically, we can reduce emissions,” he added.

Farming makes up 12 per cent of the EU’s emissions, of which about two-thirds comes from meat and dairy production. But it is one of the few sectors in the EU to have so far avoided strict climate legislation, including sectoral emissions reduction targets, in part because of farmers’ ability to stage widespread and disruptive protests.

Earlier this year, tractor blockades and demonstrations by farmers in many European capitals catalysed a rethink in the EU about how it was approaching efforts to decarbonise farms. It prompted the commission to retract a proposed law on pesticides and delete recommended targets from a document outlining how the bloc would reach its 2040 goal.

But the issue of making either farmers or other parties in the food chain pay for emissions has risen up the agenda as Brussels starts to outline its priorities for the next five-year mandate starting later this year.

 Denmark has also been lobbying Brussels to introduce an EU-wide system after it announced the world’s first carbon tax on farm emissions in June. EU officials are weighing options including a levy on food processors that would also include incentives for farmers to use their land as a carbon sink.

But a report on the future of farming in the EU that stemmed from consultations between food and farming industry groups as well as environmental NGOs, published this month, said it was “premature” to come to a conclusion about pricing agricultural emissions.

Strategic dialogue report

The final report of the Strategic Dialogue on the Future of EU Agriculture is now available: https://agriculture.ec.europa.eu/common-agricultural-policy/cap-overview/main-initiatives-strategic-dialogue-future-eu-agriculture_en#strategic-dialogue-report

'There is consensus among members of the Strategic Dialogue that economic, environmental and social sustainability in the agri-food sector can reinforce each other, especially when supported by coherent policy measures.'   One can but hope for the latter.

“Business as usual, be it economic, social or environmental, is not an option,” said the report.. “Bold and swift action at all levels is needed” to tackle the “multiple crises” affecting farmers, including increased impacts from extreme weather such as drought, from inflation and from low-cost global competitors.

Among other proposals of the report are schemes to encourage consumers to cut their meat intake, including through tax incentives and labelling, and to help farmers move away from livestock farming, including a controversial suggestion to introduce voluntary buyout schemes for farms in areas with high levels of intensive animal farming.

The most significant recommendation is a major overhaul of the EU’s CAP subsidy scheme, which was first launched in 1962 and consumes a third of the bloc’s multiannual budget. Instead of allocating direct support to farmers according to the amount of land they own and linking that to mandatory environmental standards, the report recommends that subsidies should go to “the active farmers who need it most” based on their “economic viability”.

The report proposes that farmers receive incentives within the CAP to green their practices, as well as from a “Just Transition Fund” that is outside the CAP budget and is dedicated to longer-term changes such as converting farms to “regenerative” or organic methods. There should also be a loan package of up to €3bn from the European Investment Bank that prioritises young farmers.

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/

National state aids on the up but hard to track

National aids to agriculture have increased, but they are difficult to track and more transparency is needed: http://capreform.eu/greater-transparency-needed-in-national-aids-to-agriculture/

Alan Matthews estimates that national state aids led to additional transfers of €9 billion to farmers.   He forecasts: 'It is likely that relying on Member States to provide national aids will continue to be a feature of future crises.'

He notes: 'This is an extremely murky area as, despite the obligations on Member States to report State aid and other aid to farmers, there is no central registry which keeps track of these amounts.'

New food security report

The EU has brought out a second report on the state of food security in the EU: https://agriculture.ec.europa.eu/document/download/a91b3841-6021-489e-b877-7f0f5278c88c_en?filename=efscm-assessment-spring-2024_en.pdf

It highlights weather and cost concerns on supply side and high food prices on demand side.

Farmer protests and the EP elections

Alan Matthews writes here about farmer protests and the 2024 European Parliament elections: https://www.intereconomics.eu/contents/year/2024/number/2/article/farmer-protests-and-the-2024-european-parliament-elections.html

He states:'This article looks at the origins of this recent wave of farm protests and asks whether a crisis situation exists in European farming as the Commission has suggested. It examines the measures that have been adopted and proposed in response. These measures, while consistent with the previously existing trend to roll back elements of the Green Deal, are in themselves limited in scope.'

'While signalling a willingness to respond to farmers’ concerns, they are unlikely to significantly change their situation. More radical changes have been put on the table, and these elements will play a role in the European Parliament elections in June 2024.'

Look out for an article from him to appear soon online from Political Quarterly.

Ministers retreat in face of farmer protests

Ministers have urged the EU to increase funding for the €60bn-a-year Common Agricultural Policy subsidy scheme in a bid to quell protests as Belgian farmers blockaded roads and set fire to tyres in central Brussels.

The CAP, which consumes about a third of the EU’s joint budget and is the oldest of the bloc’s policies still in operation, is designed to provide a steady stream of income to farmers in order to ensure food production. But as farmers staged their latest protests on Monday over rising costs and environmental regulations, ministers gathering in Brussels to discuss emergency measures to placate farmers said more money was crucial.

Charlie McConalogue, Ireland’s agriculture minister, told the Financial Times that the CAP had “eroded” in real terms over the past years and “must be strengthened in terms of its funding”. “Food security and supporting food production [should be] put very much back at the centre of . . . European budgetary considerations,” he said, a call echoed by ministers from France, Poland and other eastern European countries, according to diplomats present at the talks.

The CAP accounts for €386.6bn of the bloc’s €1.21tn common budget, which runs from 2021 to 2027.  Is this really a good use of available funds? Some 80 per cent of the scheme’s money goes to just 20 per cent of farmers, it is claimed, although I think this is a lazy application of the Pareto rule.

The debate over its increase comes amid heated discussions over priorities for the EU’s joint budget, with governments reluctant to contribute more due to stretched national finances and a need to spend more on defence after Russia launched its full-scale invasion of Ukraine two years ago.

Renationalisation?

Piet Adema, the Dutch agricultural minister, told the Financial Times that instead of boosting the CAP, member states should be allowed more flexibility in how the funds could be used, i.e., renationalise the policy but said consumers should also accept the need to pay more for their food.   But consumers are struggling with a cost of living crisis.

Adema said: “There should be more transparency in the whole food supply chain: where are the earnings made, where are the losses made and how can we influence that?   Indeed, but there are powerful forces that would oppose that, both input multinationals and large scale food processors.“The amount of money you pay for your food compared to 20 or 30 years ago relatively has gone down so when we as a society want our farmers to produce honest sustainable goods, we have to pay for them.”

Farmers have not only called for more funds but also a relaxation in environmental regulations and a reconsideration of trade deals that they say are allowing cheap food imports to undercut prices for EU producers.

Brussels mayhem

In Brussels on Monday, hundreds of tractors blockaded streets close to where ministers were meeting. Some drove at riot police and destroyed barbed wire barricades set up around the main buildings. Several protesters threw manure and brandished placards with slogans such as “leave a future for our children, don’t kill our parents”.

Police used water cannon to douse burning tyres. The demonstrations follow weeks of protests across EU countries including France, Germany, Italy, Poland, Romania and Spain. Farmers blocked a major motorway in Poland on Monday and threatened to continue their blockades for more than 20 days unless their demands were met. French President Emmanuel Macron missed a G7 meeting at the weekend as he spent 13 hours meeting farmers at the country’s annual Salon de l’Agriculture trade show. He called for “calm” after facing protests at the event. “We’re not going to be able to fix the farming crisis in a few hours,” he said.

Ministers in retreat

Ministers agreed that proposals put forward by the European Commission last week aimed at cutting red tape for farmers trying to access CAP funds were “a step in the right direction”, said David Clarinval, Belgium’s deputy prime minister told the Pink ‘Un, but “more ambitious measures” were needed.

The commission has already withdrawn a flagship proposal to cut pesticide use and deleted emissions reductions targets for agriculture from a document outlining options for future EU climate policy. Agriculture will be on the agenda of the EU leaders’ summit in March, one EU diplomat said. In a letter to the commission on Friday, Copa Cogeca, the main farming lobby group, said the bloc’s environmental agenda had resulted in “a regulatory tsunami, with too many rushed consultations, top-down targets lacking assessment, and proposals pushed through without feasibility studies”.

But Via Campesina, one of the groups behind Monday’s protest, which represents small food producers and agricultural workers, said: “Putting a stop to various measures aimed at protecting the environment is an easy solution that meets the needs of agribusiness players. Administrative simplification measures are necessary, but obviously insufficient to guarantee an income for our farms.”

Why farmers are protesting

Some excellent in depth analysis of why farmers are protesting across Europe and how they relate to climate change: https://www.carbonbrief.org/analysis-how-do-the-eu-farmer-protests-relate-to-climate-change/

Look out for some further analysis that will appear soon in Political Quarterly.

Commission backs down on greening agriculture

The European Commission has thrown in the towel on plans to cut climate change emissions in agriculture: https://www.euractiv.com/section/agriculture-food/news/eu-commission-backtracks-on-agricultural-emissions-cuts/

The recent farmer protests across Europe have undoubtedly been a factor, but there has also been concern about far right gains in the upcoming European Parliament elections which could undermine the European project as a whole.  The desire of Urusla von Ley en to secure a second term as Commission president is also part of the context: https://neighbourhood-enlargement.ec.europa.eu/news/speech-president-von-der-leyen-european-parliament-plenary-conclusions-european-council-meetings-2024-02-06_en.

Reducing climate change emissions in agriculture are not an optional extra.   In France, for example, they account for 12 per cent of emissions, far exceeding the contribution of agriculture to GDP or employment. Unfortunately, governments in general have a tendency to back away from effective measures of climate change once they threaten current lifestyles or working patterns.   This is in spite of increasing evidence of  a climate emergency.

Apparently the intention is to have a policy that covers the food sector as a whole which is not without merit but undermined if other measures are dropped.   The Greens are calling for a windfall tax on the profits of agri-food companies.

The plan to halve pesticide use by 2030 is to be dropped.   This is, of course, not directly related to climate change.  It would have an impact on production.   Biological alternatives to synthetics are being developed and are increasing market share, but there are not enough of them and they are not suitable for all crops. This policy might also have been onerous for farmers in terms of form filling.'  According to von Leyen, the pesticides measure has become a symbol of polarization.   Shares in Bayer, the EU's biggest pesticides producer, rose by 2 per cent.

Animal welfare rules are set to be watered down and unpopular (and largely ineffective) set aside requirements abandoned.

Why farmers are in revolt

It's been no surprise to see French farmers blocking motorways.   Such demonstrations are part of the political culture of France and farmers are particularly likely to resort to them.

However, all over Europe farmers are in revolt.   In the Netherlands they have given support to an insurgent party while Polish farmers are threatening to block the border with Ukraine to halt grain shipments.

All this is happening when farmers receive quite generous subsidies with the CAP still accounting for around a third of the EU budget.    Admittedly, input prices went up sharply in recent inflation.

The grievances cited by the farmers are many but among them are imports which under cut them and are produced used pesticides no longer permitted in the EU.   The EU's whole green agenda is seen as a threat, not least because of the form filling burden it imposes.

Four per cent set aside is unpopular as the land still has to be maintained and it does little to boost biodiversity.

Farmers have attracted some support from the public, not least in France where gastronomy is so central to the national identity.

So what is the answer?   There isn't a simple one.  Blocking imports would harm developing countries and put up prices for consumers.  Up to now the CAP has not been modified to take account of climate change and the green agenda was intended to address this and other environmental issues such as biodiversity.   It cannot be abandoned.

Over ten years ago I wrote an article emphasizing the importance of policy instruments in the CAP and the need for them to be better designed - more closely related to policy objectives while imposing fewer transaction costs on farmers.

However, simplification has long been a call in the CAP and not much progress has been made.  Indeed, complexity is almost what defines the policy, deterring policy outsiders from probing too closely.

Alan Matthews has an interesting perspective.   He argues that the evidence shows that farmers have made steady gains in their income from agriculture over the last two decades (since 2005) and agricultural income levels have been at their highest in the past three years, despite higher input costs: http://capreform.eu/what-is-actually-happening-with-agricultural-incomes/

EU green thrust irks farmers

No surprise perhaps to seem them on the streets, but French farmers have begun blocking motorways and targeting government buildings to express anger over rising costs and what they call suffocating red tape at both a national and EU level.

 “To attain our objectives, violence is not the answer, but some farmers have simply had enough,” said Arnaud Rousseau, head of the country’s biggest farmers’ union, FNSEA, on France Inter radio on Monday. He promised further demonstrations until farmers’ concerns were addressed. 

The government has said for months it would introduce legislation to help farmers but on Sunday pushed back the proposal for a few weeks, saying it wanted to improve it.  The movement in France, the biggest agricultural producer in the EU and a main recipient of the bloc’s Common Agricultural Policy subsidies, comes as similar protests have occurred in recent weeks in Germany, the Netherlands, Poland and Romania.  In the Netherlands, farmer discontent over fertiliser curbs helped boost an insurgent party..

Although farmers’ rage has sometimes been touched off by national measures such as a fuel tax subsidy cut in Germany, there is also a broad consensus against the EU’s “farm to fork” strategy that aims to reduce pesticide use and impose new rules to take climate change into account in farming practices. 

Withdrawal of tax break angers German farmers

As Germany faces a budget crisis, German farmers are furious at the withdrawal of the tax exemption for agricultural diesel.   Farmers blockaded large parts of central Berlin with a convoy of tractors yesterday.

The measure is expected to save the state about €900m a year and was apparently agreed over the head of farm minister Cem Ozdemir who has publicly criticised it.  It is estimated that the average farm will have to pay an additional €6,000 a year in tax as a result.

'Red' diesel was retained in the UK after Brexit.

More on this hee: https://unherd.com/thepost/germanys-farmer-protests-spell-trouble-for-olaf-scholz/

Progress on greening CAP 'stalling

Progress on the greening of the CAP is stalling according to the OECD: https://www.euractiv.com/section/agriculture-food/news/tie-farming-subsidies-to-performance-oecd-tells-eu/

The OECD calls for a more results oriented CAP.

UK agricultural policy after Brexit

My article with Alan Greer on the impact of Brexit on agricultural policy in the four nations of the UK is available to view free online: https://www.tandfonline.com/doi/full/10.1080/13501763.2023.2204118

The CAP after 2027

The debate about the CAP post 2027 is starting and Alan Matthews looks in depth at an IEEP paper on the green transition: http://capreform.eu/how-to-advance-the-green-transition-in-the-next-cap-post-2027/

Pessimism about pesticides regulation not justified

With the European Parliament scheduled to vote on the Sustainable Use of Pesticides Regulation in November, this open access article by JRC scientists sets out why fears of negative impacts on production are overblown: https://www.nature.com/articles/s43016-023-00834-6

Recent studies have estimated the potential yield impacts of pesticide reductions in the European Union. While these estimates guide policy design, they are often based on worst-case assumptions and rarely account for positive ecological feedbacks that would contribute to sustainable crop yields in the long term.

'Protecting crop yields is critical to safeguarding food and feed security. Studies on the potential yield impacts of a reduction in pesticide use and risk in the EU estimated adverse effects. As shown here, the literature suggests that these estimates are upper bounds for several reasons that must be acknowledged in research on the impacts of a pesticide reduction: the full 50% reduction does not fall onto feed and food crops; the heterogeneity in pesticide use across farms, areas and crops can be exploited in reduction plans; risk-based indices allow for progress by substituting active substances; the expansion of the area under organic farming may deliver progress; the SUR facilitates agronomic and technological alternatives to pesticides; and ecosystem services supporting sustainable crop yields will benefit from lower pesticide use. Finally, the SUR improves the availability of data on pesticide use and, in doing so, addresses a bottleneck in research and policy-making concerning more sustainable food systems.'

EU in retreat over animal welfare?

The EU is considering scrapping plans to impose regulations designed to improve animal welfare in the farming industry over concerns about the impact it could have on food inflation, according to senior officials.

The European Commission had promised to act after public pressure to stop practices such as the use of cages for livestock, the killing of day-old chicks, and the sale and production of fur. But concerns that the proposed changes could add to food costs, which rose sharply after Russia invaded Ukraine last year, have led Brussels to reconsider the plans.

Three EU officials with knowledge of the matter told the Financial Times that the Commission had dropped the proposals completely — along with a sustainable food law designed to boost green food production across the bloc. But another official said it was reviewing the animal welfare plan and would propose a scaled-back version.   This sounds like a trial balloon to judge reactions.

“Some in the commission are worried about the cost,” said Joe Moran, director of European policy for Four Paws, an animal welfare campaign group. The legislation is among the few remaining parts of the EU’s Green Deal climate package, laid out in 2019 to pivot the bloc to a more sustainable economy. But ahead of EU-wide elections in 2024, conservative politicians have pushed back against the environmental regulations.

Typically, the reaction of farm organizations is to call for more subsidies.  Pekka Pesonen, secretary-general of Copa-Cogeca, the EU farmer’s group, told the FT it could support many of the changes as long as they received financial aid to implement them, and if imported meat was subject to the same standards. That would in effect ban many imports from trading partners such as Brazil, Ukraine and Thailand. Such a measure would also be opposed by trade commissioner Valdis Dombrovskis.

The UK was one of the strongest advocates of animal welfare measures and its voice is no longer heard in the EU.

British farmers think things were better when the EU made policy

The voting behaviour of UK farmers in the Brexit referendum mirrored that of the population as a whole, but quite a few are now regretting their choice according to a Farmers' Weekly survey of 950 farmers and those in ancillary industries. 

Two-thirds of those surveyed thought that the UK was better off when the EU devised policy, ironically a view strongest among those growing non-supported crops such as potatoes, sugar beet and fruit.

Three-quarters of respondents said that Brexit had been negative for the UK economy and 69 per cent said that it had been very or fairly negative for their own businesses.   If the vote could be held again, there would be an eight per cent swing from leave to remain.   65 per cent said that it made it less likely they would vote Conservative.

Both arable and livestock farmers seemed equally disappointed   Even more negative were those growing vegetables (81 per cent) or keeping pigs  (79 per cent).

A clear majority said that despite pre-Brexit promises of 'a bonfire of red tape' once Britain left the EU, the reverse had been true.   My talks to farmers around the north of England convinced me that some had a very surprising view of the regulations that could be discarded.

The phasing out of the Basic Payment Scheme in England attracted a lot of criticism, it being claimed that farming could not survive without support.    Arguably this shows an industry that had become too reliant on subsidies not tied to outcomes.

How has UK agricultural policy changed since Brexit?

Some thoughts here: https://blogs.lse.ac.uk/europpblog/2023/05/24/how-has-uk-agricultural-policy-changed-since-brexit/

Divergence and continuity after Brexit

My article with Alan Greer on 'Divergence and Continuity after Brexit in agriculture' in the Journal of European Public Policy is now available online: https://www.tandfonline.com/doi/full/10.1080/13501763.2023.2204118

Throughout British membership of the European Union (EU), agricultural policy was largely determined by the Common Agricultural Policy (CAP). This was viewed by the UK as a dysfunctional policy and while periodic reforms meant that the EU moved slowly in the direction advocated by the UK, many of the main policy elements remained in place. The devolved administrations in Scotland, Wales and Northern Ireland have always enjoyed a measure of policy freedom in agriculture and have diverged from England in some areas. This article explores the extent of de-Europeanisation in the agricultural sectors in the UK and the patterns of divergence between them, focusing primarily on the development of policies for agricultural support that will replace those in place under the CAP. Overall, there has been substantial divergence in policy, but also areas of continuity, which means that processes of de-Europeanisation in the UK agricultural sectors has been uneven.

Fallow land boosts biodiversity

Research suggests that fallow land can promote bird biodiversity: https://phys.org/news/2023-04-fallow-bird-biodiversity.html

It is suggested that getting rid of set aside in the CAP was a mistake, but there was a broader set of arguments about that policy.   The current emphasis on food security would make it difficult to reinstate.

Ag committee wants cattle kept out of emission plans

The EU Parliament's Agriculture Committee wants to exclude cattle and other livestock from plans to cut greenhouse gas emissions: https://www.euractiv.com/section/agriculture-food/news/agriculture-meps-ask-to-exclude-cows-from-emission-cutting-plans/

Cattle are responsible for 68-74 per cent of livestock emissions.  Methane from cattle is shorter lived than carbon dioxide but is estimated to be 28 times more potent in warming the atmosphere.

In 2018 methane emissions from enteric fermentation in digestive systems of ruminant livestock continued to be the largest single component of farm-gate emissions. Enteric fermentation is a natural part of the digestive process in ruminant animals such as cattle, sheep, goats, and buffalo.   This is a digestive process as enzymes in their gut break down grass, hay and other feed.  Microbes in the digestive tract, or rumen, decompose and ferment food, producing methane as a by-product.    The gas, which builds up in stomachs, is then emitted largely through their burps

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.

Structural change in EU agriculture

Alan Matthews looks at the evidence on the changing structure of EU agriculture.  Although the number of farms has declined, the area farmed remains broadly stable: http://capreform.eu/tracking-structural-change-in-eu-agriculture/

Commission approves CAP strategic plans

The Commission has now approved twenty strategic CAP plans with eight still to go: https://agriculture.ec.europa.eu/cap-my-country/cap-strategic-plans/approved-csp-0_en

Pesticide pause?

The EU is considering delaying plans to halve the use of pesticides over fears that the move could cut production and raise food prices at a time when they are under pressure from the conflict in Ukraine.

The Sustainable Use of Pesticides regulation intends to halve chemicals use by 2030.  This was always an ambitious project, given the lack of progress in getting biological alternatives developed, registered and on the market - and training farmers in their use.

EU farm lobby Copa-Cogeca is pushing for a range of green initiatives to be delayed or abandoned.

The current Czech presidency does not expect to find a compromise by the end of the year and there is some unease in the European Parliament about the proposal. 

Energy costs hit food supplies across Europe

UK growers are scaling back production in greenhouses as energy costs increase, a pattern that is replicated across Europe.  Crops that require intensive heating in colder climates such as tomatoes, cucumbers and lettuce are the most directly affected.

However, the energy crisis is impacting the EU food supply chain more directly.  Bakers, dairy farmers and other producers, including growers of sugar beet and olives are struggling to pay bills.  The price of inputs such as fertiliser and animal feed has shot up, alongside rising refrigeration and transport costs.

The UK's support plan for small businesses lasts just six months and so far lacks detail.     It is claimed that 75 to 80 per cent of UK salad growers will not plant next year.

In the Netherlands, which accounts for a quarter of world tomato exports, many glasshouses are going dark.  The largest tomato supplier in Sweden and Denmark is also switching off this winter.  Growers in Spain and Morocco may not be able to fill the gap.

In Italy, where growers are already struggling with a drought, it is estimated that a third of farmers are operating at a loss.  Monthly energy bills have typically tripled and fertiliser costs are up fourfold.  Many farmers on fixed contracts are choosing to sell the energy on.

Farmers may increase output of less energy intensive crops such as peppers.

New thinking on agriculture and food policy

My new book on agricultural and food policy is now out.

This book takes stock of the urgent challenges facing food chains globally and provides a critical evaluation of radical new thinking and perspectives on agricultural and food policy. Wyn Grant investigates the principal drivers of change in food and agriculture, including globalization, climate change, the structure of the industry, changing patterns of consumer demand and new technologies.

Rethinking Agricultural and Food Policy provides a comprehensive account of the contemporary challenges impacting the food chain. Chapters explore the various barriers towards positive progress, exposing the deficiency of institutional architecture at a domestic and international level and examining how attempts to reform and revitalize it encounter inertia, embedded production structures, defenders of the status quo and vested interests. Proposing that a holistic, interdisciplinary approach is essential in making progress towards revitalizing policy and encouraging innovation in international governance, Wyn Grant calls for a new agenda to deliver real and necessary change and offer hope for the planet and its people.

Using critical insights from natural and social science to uphold its calls for a holistic, integrated approach to agricultural and food policy, this timely book will be an essential read for policy makers, as well as students taking undergraduate or postgraduate courses in agriculture, food and the environment.

More information here: https://www.e-elgar.com/shop/gbp/rethinking-agricultural-and-food-policy-9781800881204.html

Farm to Fork strategy under threat

The EU's commitment to tackle climate change in the food chain has arguably never been as strong as it should been, in part because of pressure from the agri-food industries, but the Farm to Fork strategy at least outlined a way forward and set some targets.   Now it is under jeopardy as climate change is once again relegated in importance as food security comes to the fore given the historic role of Ukraine as a European 'bread basket'.

Farm to Fork targets included cutting fertiliser use by a fifth (it may reduce anyway because of soaring prices), halving the use of antibiotics and increasing the amount of land farmed organically from 9 per cent to 23 per cent.   Pesticide use has already decreased with many substances banned.

French president Emmanuel Macron has said that the sustainable food strategy was 'based on a pre-Ukraine war world' and should be revised, claiming it would lead to a 13 per cent drop in food production: https://www.euractiv.com/section/agriculture-food/news/macron-wants-to-adapt-eu-farm-to-fork-to-the-post-ukraine-war-world/  

He would, wouldn't he?  He is facing a presidential election in which he needs the votes of farmers, but Italy and Spain have raised similar concerns.

The farm lobby in the form of Copa/Cogeca have seized the window of political opportunity and called for increased fertiliser imports, pesticide use and cultivation of crops for animal feed.  They have also called for opt outs from ecological schemes and climate-linked animal welfare standards.

The Food Policy Coalition insists that the war in Ukraine is a reminder of how important it is to implement the Green Deal and the Farm to Fork and Biodiversity strategies: https://foodpolicycoalition.eu/wp-content/uploads/2022/03/Joint-open-letter-EU-food-supply-and-solidarity-response-to-the-war-in-Ukraine.-March-2022.pdf

Farm ministers were meeting in Brussels on Monday March 21st.

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.

Risks to the sustainability agenda

It could be 'back to the future' as farm organisations use the war in Ukraine to bang the food security drum.  There are, of course, real issues here, given the importance of Russia and Ukraine in wheat production, but there is a risk of reverting to old fashioned blunt instrument subsidies and downgrading the sustainability agenda.

In particular one could create a false dichotomy between food security and sustainability: https://www.foodnavigator.com/Article/2022/03/07/Ukraine-war-detonates-EU-food-security-debate-but-will-sustainability-be-collateral-damage#

I will write more about this issue in the coming days.

Why we need research across disciplines to change food systems

This call for transdisciplinary research in the transformation of food systems is one I very much endorse and is reflected in my forthcoming book Rethinking Agricultural and Food Policy just submitted to Edward Elgar: https://link.springer.com/article/10.1186/s40100-021-00207-2

Call for EU plant protein strategy

France and Austria have national plant protein strategies and have called for a EU level strategy as part of a drive towards a more sustainable food system: https://info.bmlrt.gv.at/dam/jcr:e056d439-b736-439d-a0a2-fe03a02a5e44/Deklaration%20EN.pdf

Green takes agriculture ministry in Germany

The new food and agriculture minister in Germany, Cem Ozdemir, is a Green and a vegetarian.   However, he is seen as a pragmatist and his appointment has been welcomed by German farm organisations: https://www.politico.eu/article/germany-cem-ozdemir-agriculture-minister-farmers-election-greens/

The new German coalition will not manage to overhaul the CAP national strategic plan before the deadline, but aims for mid-term review and possible revisions.

Green food plan under attack

The European Parliament is due to vote on the Commission's Farm to Fork strategy this week, but is facing a lobbying blitz from farmers, agribusiness and even the US Government.  It is being argued that the strategy will reduce crop yields and force up prices: https://www.politico.eu/article/meps-vote-eus-green-food-plan-farm-to-fork/

Italy fails to make progress on CAP plan

Italy isn't make much progress towards a strategic view of the CAP, even though it could contribute to a fairer and greener policy: https://www.arc2020.eu/italian-cap-plan-in-progress/

Kiwi view of new style CAP

New Zealand has produced a comprehensive and authoritative report on the latest developments in the Common Agricultural Policy: https://www.mfat.govt.nz/en/trade/mfat-market-reports/market-reports-europe/eu-common-agricultural-policy-aims-to-be-fairer-greener-more-animal-friendly-and-flexible/

France still tops CAP money league

Some useful data here about agriculture in each member state and the EU as a whole: https://ec.europa.eu/info/food-farming-fisheries/farming/facts-and-figures/performance-agricultural-policy/agriculture-country/eu-country-factsheets_en

France still receives the greatest share of CAP expenditure, €9,448m or 17 per cent of the total.  Spain receives €6,908m and Germany €6280m followed by Italy on €5,778m.  These four states account for 52 per cent of expenditure.

Poland is the leading East European state on €4615m.   Malta receives the smallest amount at €19m.

German commission calls for CAP reform

A broadly based German commission has called for the reorientation of agriculture and food policy: https://www.euractiv.com/section/agriculture-food/news/german-commission-urges-phase-out-of-cap-direct-payments/

The report calls for a phasing out of direct payments and a reorientation of the CAP in the direction of environmental, animal welfare and climate change goals. 

The timing is a little odd as the EU has recently agreed the next five year plan for the CAP and the challenge now will be to maintain momentum.

CAP deal looks like business as usual

After months of difficult negotiations, a compromise was agreed on the next phase of the Common Agricultural Policy, but inevitably not everyone is happy, not least in France: https://www.euractiv.com/section/agriculture-food/news/france-still-has-mixed-feelings-over-compromise-cap-deal/

The new five year framework starts on 1 January 2023.  Direct payments to active farmers will account for 70 per cent or €192bn of the budget which still amounts to over a third of the overall EU budget.  However, at least 25 per cent of this support should be spent on eco schemes such as organic farming or integrated pest management.   Worthy those these schemes may be, do they represent any kind of strategy for tackling agriculture's contribution to climate change?

There is also a €450m a year reserve to bail out farmers in times of market crisis.  This is a substantial sum and it will be interesting to see how it will be triggered.

For all the bells and whistles such as member states being able to impose caps and reductions on direct payments to larger farms, this does look very much like a 'business as usual' settlement despite claims of a fairer, greener and simpler CAP: https://ec.europa.eu/commission/presscorner/detail/en/IP_21_2711.  Farm organisations have given it a lukewarm reception which suggests that it is not all that bad for their members.

Farmers in Britain are concerned that their competitors will continue to receive direct payments just as they are phased out in the UK.  Their continental counterparts will not be exposed to trade deals that facilitate cheap imports.

Some early reflections on the impact of Brexit

This article appeared in the latest issue of South-East Farmer:

Many farmers breathed a sigh of relief when a last minute trade deal was agreed between the UK and the EU, avoiding the threat of tariffs and quotas on agricultural exports.   Of course, this would have affected some sectors more than others, notably those farming sheep.  Such enterprises exist within the south-east of England, but they are more characteristic of remote hill farming areas in all the four nations of the United Kingdom.

I must admit to having a personal interest as my brother-in-law and nephew are sheep farmers in a remote part of Wales.   They have merged three farms in order to run as lean and efficient an operation as possible.   However, the whole enterprise is reliant on selling sheep for meat and the price they receive is influenced by the 40 per cent or so of total output that goes to mainland Europe.   The price received for wool scarcely covers the cost of shearing, if that, and rental income from properties and telephone masts is very much secondary.   The suggestion made by one politician that sheep farmers could shift to beef ignores the realities of production.

Farmers are generally enterprising and keen to keep input costs under control.   One farmer I know in Yorkshire produces honey with a distinctive taste from the moors, but still principally relies on his contract with a leading supermarket.   The more general point here is that the basic payment received by farmers under the Common Agricultural Policy is being replaced by a smaller domestic payment that is being phased out more quickly than some had anticipated, particularly for larger scale farms.

Other new forms of payment will be available, principally the Environmental Land Management Scheme, although that is still being developed and tested.  Along with other payments, it will fall well short of compensating farmers for the loss of the basic payment which made the difference between profit and loss for many farm enterprises.    It will also involve form filling to obtain, along with monitoring of outcomes, and is likely to be more suitable for farmers in remoter areas.   This is not necessarily a bad thing from an overall policy point of view, but it may prove challenging for, for example, larger scale arable farmers in south-east England.

In areas like the south-east there are, of course, opportunities for diversification that may not exist in remoter areas, particularly those that are less suited to tourism.   In this area as well, farmers have been very innovative in the range of ideas they have put into practice.   There can, however, come a point where one is no longer running a farm business, but a farm that enhances other projects such as wedding venues, restaurants, shops and petting zoos.  [I have just read about a farmer who is made £50,000 by loaning out a goat for video calls].

It is, of course, a personal business decision how far to go down this route.   A note of caution is necessary for late adopters.  Much of the low hanging fruit has already been taken.   The capital costs can be considerable and the skills required can be very different from decisions about what to plant, when to spray and when to harvest.   That said, many farmers manage to both farm and run complementary businesses.

Agriculture was the dog that didn’t bark in the night time in the very long legal text arrived at between the UK and the EU.   Indeed, listening to the discussions during the negotiations, one was left with the impression that fisheries were the really vital sector despite the fact that it accounts for a smaller share of the economy than agriculture.   Fish did enjoy considerable symbolic value in terms of ‘taking back control’.

There was an annex on trade in wine.   This is not really my area of expertise, apart from enjoying it and investing in one well-known business in the South-East.  As with most such agreements, the devil is in detail, but I would have thought that at first glance it was broadly acceptable to those growing grapes and producing wine in England.  [A subsequent article in the Financial Times refers to certification costs which could add £1.50 to a £12 bottle of imported wine.  This, of course, could make domestically produced wine more price competitive, although factors other than price can play a big part in purchase decisions].

In simple terms what the annex says is that EU and the UK should import and consume each other’s wine, although the flow is clearly from the EU direction.   The documentation required is limited to a certificate which can be produced electronically.   The self-certification is limited to eleven relatively straightforward questions.  The agreement will be reviewed after three years, a shorter period than for fisheries.

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.

EU lays down the gauntlet on biodiversity

The EU has set out a new biodiversity strategy.   When I have studied it in detail I will provide some analysis, but for now the summary can be found here: https://ec.europa.eu/environment/nature/biodiversity/strategy/index_en.htm

The full Communication can be found here: https://ec.europa.eu/environment/nature/biodiversity/strategy/index_en.htm

It is clear that a particular vision of farming is inherent in the document which states: 'certain agricultural practices are a key driver of biodiversity decline. This is why it is important to work with farmers to support and incentivise the transition to fully sustainable practices. Improving the condition and diversity of agroecosystems will increase the sector’s resilience to climate change, environmental risks and socioeconomic shocks, while creating new jobs, for example in organic farming, rural tourism or recreation.'

In other words, intensive forms of farming may face challenges.

The Commission's new Green Deal also has implications for agriculture and it has been leaked ahead of publication: https://www.euractiv.com/section/agriculture-food/news/commission-hikes-caps-second-pillar-spending-to-deliver-green-deal/

The recovery plan from Covid-19 'aims to digitalise and modernise the farming sector to increase the EU's resilience and to lower EU's dependency on third countries.'

Something similar may find favour in the UK after Brexit.

How can the CAP reduce GHG emissions?

Climate change has been an absent element of the CAP. A proposal for a third pillar was put forward in the last round of reforms, but was quickly squashed - I suspect by agri-business interests. However, the pressures to do something are now substantial, but what policy instruments should be used?

In that respect an article in the latest Journal of Agricultural Economics is helpful: M Himics et al, 'Setting Climate Action as the Priority for the Common Agricultural Policy: a Simulation Experiment.'

They examine the possibilities of re-directing the direct income support provided to farmers to a direct greenhouse gas reduction subsidy. They find that such a reallocation of financial resources could reduce agricultural non-carbon dioxide emissions (nitrous oxide and methane) by 21 per cent by 2030, compared to a business-as-usual baseline. Two-thirds of the emission savings are due to changes in production levels and composition.

A table lists various technological mitigation options, e.g., feed additives for livestock and breeding programmes to increase ruminant feed efficiency. Crops could use measures such as precision farming and better timing of fertilisation.

The special needs of remote island farming communities like the Orkney Islands would be respected

The greening top up of Pillar 1 would be retained, as would coupled supports for sectors and regions in competitive disadvantage. There would also be support for farmers in areas with natural constraints. My example would be the Orkney Islands which receive coupled support via the Scottish Government.

However, the removal of the basic payment could be associated with accelerated structural change and variable income effects. This does raise questions of political feasibility.

In future member states will have more flexibility to choose from a menu of greening policy options. However, it is not clear how the new CAP design would enable agriculture to meet the EU's emission reduction targets.

One area of difficulty in terms of the article's proposal is the impact on the livestock sector, already under economic pressure. 'The ruminant meat sector is most affected (-10% decrease in herd size and -9% in production), but pig production is also negatively affected.' Prices for beef and sheep and goat meat would go up, but would be offset by increasing imports and decreasing exports.

There would also be a six per cent decrease in the total utilised agricultural area, particularly of fodder activities and a 34 per cent increase in set aside activities and fallow land.

Emission savings in the EU are partially offset globally due to increasing production in less emission efficient trading partners. (Not given as an example, but Brazil comes to mind).

The scheme might also penalise farmers who have already invested in emission-efficient technologies and might require above average financial incentives to achieve further GHG reductions.

The authors argue that 'taking the current status quo of the regional pattern of basic CAP payments as a benchmark for direct agricultural GHG emissions-reduction policy would be suboptimal'. In terms of political acceptability, that might be problematic.

Nearly half of Kiwi greenhouse gases come from farming

Caroline Saunders, the president of the Agricultural Economics Society writes in its latest newsletter: 'Climate change is impacting on agriculture, both through consequences such as extreme weather events and through major changes in policy.'

'New Zealand [where she is a professor] is in an unusual position with 48 per cent of its greenhouse gases coming from agriculture. The New Zealand government has passed a Zero Carbon Bill with zero emissions by 2050. The agricultural sector has until 2022 to show how it will achieve this; otherwise, it will go into the Emissions Trading Scheme in 2025. In the UK, agricultural emissions are about 10 per cent of the total, but the UK also has the ambition of net zero emissions by 2050.

Both countries must work out how to measure the emissions, the point of obligation, the treatment of methane and the methods available to farmers to reduce emissions, and how to support farmers through the transition. There is also the issue of trade and the potential substitution of imports produced with higher emissions (New Zealand has relatively low carbon emission per unit of output).

New Zealand and the UK have strong links and it will be interesting to see how negotiations between the countries address these issues. Given WTO rules, this may be through a new trade agreement and/or through promoting consumer preferences for products with low carbon footprints. New Zealand was the first country to adopt a formal well-being budget in 2019.

Whilst it is early days to see how this will transform policy, it is a step in the right direction. One consequence is a shift in policy thinking to put more weight on the well being of those in the agricultural sector, given the changes mentioned above. A key challenge for the [agricultural economics] profession is to research the distinctive role of government to ensure transitions that consider farmer wellbeing.'

One interesting consideration is how Brexit will affect any future trade agreement which is likely to be sought by the UK. One issue could well be trade offs between financial services (for the UK) and agriculture (for New Zealand).

A new type of CAP?

The French Government has supported the idea of a CAP based on creating farmer employment rather than being based on the area cultivated: Supporting farmers jobs

The second pillar would become a set of incentives and penalties with an emphasis on tackling climate change.

New farm commissioner from Poland

With Phil Hogan promoted to be trade commissioner, the new agriculture commissioner is from Poland. Janusz Wojciechowski is a 64-year old Polish politician and has 15 years of experience in European politics, having been elected to the European Parliament in 2004, a seat he held until 2016 when he went to the Court of Auditors.

He has specific experience in agri-politics at European level, having served as the vice-chairperson of the European Parliament Committee on Agriculture and Rural Development for most of that time.

Wojciechowski was nominated as a commissioner by the Polish government after the countries original nominee for this commission, Krzysztof Szczerski, decided to withdraw his candidacy. This was because, as Szczerski explained in the Polish media after it was first mooted that he would be given the agriculture and rural development job, he felt that someone with experience in agriculture would be better suited to the role.

Wojciechowski started his European political career as part of the European People’s Party (EPP), of which his national party, the Polish People’s Party. However, he was dismissed from the Polish People’s Party after leaving the EPP for the Union for Europe and the Nations, a political grouping that is considered more conservative and eurosceptic.

He will face the challenge of dealing with a reduced farm budget after Brexit.

Intergenerational renewal in farming

An interesting report on the challenge of intergenerational renewal in European farming, an important issue given the current age profile: Farm demographics

The report argues, 'farming as occupational choice often becomes a very particular lifestyle choice. Hence, policies to increase the attractiveness of farming as an occupation should consider the fact that it often becomes a lifestyle choice. Several features of this lifestyle choice are considered unattractive, such as the hard work, often isolated occupational activity and the difficult work-life balance. Policies that address these issues can have a positive impact on the attractiveness of farming and thus enable intergenerational renewal.'

The report recognises that the increasing capital intensive nature of farming raises financing issues for those that do not inherit (and inheritance raises often difficult succession issues). In the UK the reduction in county council tenancies has reduced the availability of one entry route.

Farmers back no deal Brexit

A surprising number of farmers back a no deal Brexit given that many of them would suffer financially as a result. At least that is the case if one believes polls from Farmers Weekly. A health warning is always necessary about these polls as respondents select themselves and the Ns are often small. A poll which purported to show that a majority of farmers backed Brexit in the referendum has nevertheless embedded itself in the public mind.

43 per cent of 'about 300' farmers said they would be happy with a no deal Brexit while 57 per cent said they would not. Concern about leaving without a deal was strongest in Northern Ireland, Scotland and Yorkshire and Humberside. Optimism about farm business prospects is at its lowest level since the survey started a year ago.

A snapshot 24 hour poll found that 53 per cent would choose to leave the EU with no deal if they could vote again. 38 per cent said they would vote remain and just 9 per cent said they would back the withdrawal agreement backed by Theresa May.

It is interesting that the first poll is below a story about the impact of a no deal Brexit on the sheepmeat sector. About one-third of the UK's production of lamb is exported and 95 per cent of this goes to the EU. 40 per cent tariffs and regulatory barriers would almost wipe out exports.

The Government has ruled out culling as a response to such a crisis. It looks as if they favour a combination of a headage payment on breeding ewes and a slaughterhouse premium. The UK breeding flock already reduced by about 30 per cent in the 2017-18 breeding season as farmers responded to an uncertain future.

Mike Gooding, director of Farmers' First, one of Britain's biggest lamb exporters, told Farmers Weekly: 'Essentially, Brexit risks excluding UK produce from the EU market. A no-deal Brexit would result in the same outcome - but with that risk greatly increased.'

He predicted a substantial fall in sheep farming in the UK. 'My own personal view is that there will be far fewer farmers managing what sheep there are in larger flocks - possibly across multiple holdings.'

The New Zealand experience of removing subsidies

Caroline Saunders, the current president of the Agricultural Economics Society, writes about the experience of removing subsidies in New Zealand in the organisation's latest newsletter.

'New Zealand famously removed all subsidies to agricultural producers as part of its post-1984 reforms. Prior to those reforms, New Zealand (NZ) had a relatively high degree of regulation throughout its economy. With a change in government in 1984 accompanied by an exchange rate crisis and a looming fiscal crisis, NZ undertook widespread liberalisation.

The pace and extent of the reform programme was impressive (Paul Dalziel, New Zealand’s economic reforms: an assessment. Review of Political Economy, 2002). In summary, NZ removed all financial controls, floated its exchange rate, undertook major privatisation of state enterprises, relaxed labour market controls, and removed most import tariffs and regulations.'

'The agriculture subsidies were relatively short lived. Until the mid-1970s, support levels were relatively low. However, the introduction of Supplementary Minimum Payments (SMPs) in 1978 – a form of deficiency payment that favoured the sheep breeding flock – followed swiftly by a raft of other measures, marked a rapid escalation in support levels. These measures included: incentives for land development; concessionary livestock valuation schemes; preferential credit for farm purchase; tax concessions; and fertiliser subsidies. Most were phased out in 1984, with some transitional arrangements persisting until 1986.'

'The main impacts were a drop in sheep production and increases in beef and dairy. Farm incomes for beef and sheep farms fluctuated from NZ$23,000 in 1983 to NZ$18,000 in 1984, NZ$34,000 in 1985 and $15,000 in 1986 before rising again to around $25,000 from 1987 to 1990. The impact of the reforms on fertiliser use was significant, since fertiliser subsidies had been in existence since 1963. Between 1986 and 1991, fertiliser use fell considerably, from around 2 million tonnes per annum, to around 1.2 million tonnes. The real value of farmland doubled from 1972 to 1982, then falling from 1982 to 1988 by 58 per cent.'

'The New Zealand experience of liberalisation of agriculture offers some useful insights. There were clear changes in land prices and production decisions in response to the changes in incentives. However, some caveats also need to be observed, notably that New Zealand had a relatively simple and short-lived support system and the removal of subsidies was accompanied by liberalisation throughout the wider economy. The impact was felt by those who had changed or bought farms during the period with subsidies, and subsequently had debt that was not sustainable after the prices fell. The changes also happened within a generation, which certainly would not be the case in the UK.'

Why are there more GIs in Southern Europe?

Geographical Indications (GIs) can be seen as a way of giving consumers more information about the provenance of niche food products, but they can also be seen as protectionist instruments. The EU has the most GIs in the world (makes the Americans suspicious) but they are concentrated in the south of the EU.

In the Journal of Agricultural Economics Martijn Hysmans and Johan Swinnen explore this phenomenon. They set out a series of hypotheses for further testing, although some already look more likely runners than others.

Historically, GIs were first developed in the EU wine sector. 89 per cent of wine GI are to be found in the south of Europe, but southern member states also account for 70 per cent of food GIs (excluding wine).

H1 relates to better and more differentiated food in the south, but there is little evidence to support this (and see the discussion of Scotland below). There may be some evidence for H2 that more GIs are to be found in regions with low productivity, leading to protectionist lobbying. H3 is that globalisation may have an effect, although I would word it rather differently in terms of resistance to globalisation by informed consumers leading to a search for authentic local products.

H4 is that the decline of traditional protectionist instruments may lead to their substitution for new instruments. But why particularly GIs?

I found H5 and H6 on spillover effects persuasive. Economic spillover relates to the use of the knowledge and capabilities derived from the development of wine GIs. H6 relates to the political capacity to design successful lobbying strategies.

No Terroir in the Cold? But what about Scotland?

A farm on Sanday in Orkney which, as the name implies, has particularly good topsoils.

Scotland is one of the more northerly places in the EU, particularly in the Highlands and Islands. There are currently 15 GIs in Scotland. Four are cheeses and three are fish products and, of course, Scotch whisky is there. Four are from the northern isles of Orkney and Shetland, three from Orkney. Orkney has a very well organised farming community with its own farming magazine (Orkney Farmer) and was a pioneer in relation to action on the cattle disease, BDV.

One of the products from Orkney that has a GI is cheddar cheese ('Orkney Scottish Island Cheddar') which might often be regarded as a commodity product. However, the cheese has its own special method of production: Our tradition

There has been concern that Brexit might threaten the system of GIs seen as key to the success of traditional food and drink products in Scotland: Scottish Parliament. In particular, there has been concern that a future trade deal with the US might threaten GIs.