Following over 40 meetings in recent weeks, and three days of intensive talks in Luxembourg and Brussels, EU leaders yesterday announced that they had reached an agreement on the broad terms of CAP Reform.

The new Common Agricultural Policy will be introduced gradually over 2014, as the deal struck by negotiators on Wednesday was too late for full implementation in January, the original start date. The broad terms must be rubber stamped and the finer legal points of the new policy will have to be drawn up over the coming months before new measures can be introduced.

image expired

On Wednesday, Dacian Ciolos, the European Agriculture Commissioner who drew up the initial post-2013 CAP proposals in 2011, said "I am delighted with this agreement which gives the Common Agricultural Policy a new direction, taking better account of society's expectations as expressed during the public debate in spring 2010. This agreement will lead to far-reaching changes: making direct payments fairer and greener, strengthening the position of farmers within the food production chain and making the CAP more efficient and more transparent."

He continued, "These decisions represent the EU's strong response to the challenges of food safety, climate change, growth and jobs in rural areas. The CAP will play a key part in achieving the overall objective of promoting smart, sustainable and inclusive growth."

On Wednesday evening, the European Parliament released further information on the broad terms agreed to in trilogue negotiations this week:

Levelling

Direct payments are to be distributed in a fairer way between Member States, between regions and between farmers, the Parliament said, putting an end to 'historical references':

1. Convergence: shifting distribution of the CAP budget will ensure that no single Member State receives less than 75 percent of the Bloc's average by 2019. Within a given Member State or region, farmers' direct payments must also be at least 60 percent of the average payment per hectare by 2019.

Support will be available for small farmers, though this will remain voluntary. The Parliament said in its statement on Wednesday, "Member States will be able to increase support for small and medium-sized farms by allocating higher levels of aid for the 'first hectares' of a holding."

2. Only 'active' farmers will benefit from income-support schemes under the new CAP. The three negotiating parties agreed to a 'negative' list of claimants that will be excluded from claiming subsidies, including sports centres, airports and other non-food producing bodies.

Young farmers will also benefit from increased support. Member States will introduce a mandatory 25 percent aid supplement during farmers' first 5 years in addition to existing support mechanisms for young farmers. This new scheme will account for a maximum of 2 percent of states' direct payments pillar.

3. Member States will also be able to allocate increased amounts of aid to less-favoured areas. It will be possible to allocate coupled payments for a limited number of products, with a specific 2 percent coupling for plant-based proteins, so as to make the EU less dependent on imports in this area.

Balancing farmers' position in the supply chain

A number of measures introduced focus on improving farmers' bargaining position in the supply chain:

1. Promotion of professional and interprofessional organisations will be supported under the new policy, and for certain sectors there will be specific regulations on competition law (milk, beef, olive oil, cereals). Such organisations will be able to increase efficiency by negotiating sales agreements on behalf of their members, the Parliament said.

2. Sugar quotas will be abolished by 2017. Once the quotas end, the sector will be organised through contracts and mandatory interprofessional agreements.

New crisis management tools will be put into place:

1. The Commission will be able to temporarily authorise producers to manage the volumes placed on the market,

2. rovision of a crisis reserve (including a general emergency clause).

3. Under rural development programmes, Member States will be able to encourage farmers to take part in risk prevention mechanisms (income support schemes or mutual funds) and to bring in 'sub-programmes' for sectors facing specific problems.

Greening

One of the most controversial areas of the current CAP; industrial farming lobbyists said greening measures could limit the EU's food production capacity, whilst environment groups warned that the measures, which were fairly basic to begin with, had been diluted as CAP proposals passed through the EU Council and Parliament Agriculture Committees.

On Wednesday, the Parliament claimed negotiations on greening measures had been a success. In its statement, the group claimed, "Between 2014 and 2020, over EUR 100 billion will be invested to help farming meet the challenges of soil and water quality, biodiversity and climate change," though reaction to the reforms has shown the benefit, or otherwise, of their compromise terms remains a deeply contested issue:

1. Compulsory 'Greening' of 30 percent of direct payments will be linked to three environmentally-friendly farming practices: crop diversification (subject to farm size), maintaining permanent grassland and conserving 5 percent (rising to 7 percent from 2018) of areas of ecological interest (though farmers of under 15ha are exempt from this last measure – environment groups said the 'ecological focus areas' rule will now only apply to 63 percent of farmland and 11 percent of farmers).

Parliament suggested that "measures considered to have at least equivalent environmental benefits" would also be rewarded with the greening payments. This too has infuriated environment groups, who have protested against broad exemptions from the greening policy.

2. At least 30 percent of the rural development (pillar two) budget will be allocated to agri-environmental measures, support for organic farming or projects associated with environmentally friendly investment or innovation measures

3. Agri-environmental measures will be stepped up to complement greening practices. These programmes will have to set and meet higher environmental protection targets (in a bid to guarantee against double funding, which caused outrage amongst the taxpayers who foot the €5 billion annual CAP bill).

Green groups have also taken issue with exemptions for farmers from certain EU water and environmental pollution regulations, despite the best efforts of the Commission and some Parliamentarians to bring farming into line with other industries.

Making the CAP more transparent and 'efficient'

Parliament said the new CAP instruments being introduced will be flexible enough o allow Member States to fulfil the common objectives, while "taking account of the diversity of the 27, soon to be 28 Member States":

1. The amount of funding to support research, innovation and knowledge-sharing will be doubled.

2. Rural development programmes will be better coordinated with other European funds and the sector-based approach will be replaced by a more adaptable national or regional strategic approach.

3. A simplified aid scheme for small farmers will be available to the Member States that so desire.

4. Details of all CAP aid will be made public, with the exception of the very small amounts allocated to small farmers.

Parliament also shed more light on the staggered introduction of new CAP mechanisms.  All aspects of the reform will come into effect from 1st January 2014, except for the new direct payments structure ('green' payments, additional support for young people, etc.) which will instead apply from 2015, in order to give Member States time to inform farmers about the new CAP and to adapt computer-based CAP management systems.

The reforms agreed to by negotiators on Wednesday are only provisional; they must now be passed by the full parliament and Member States governments.

Reactions to the reform deal

Reacting to the CAP deal, British MEP and Conservative agriculture spokesperson Julie Girling said the new rules would hurt rather than help British farming; Defra secretary and Agriculture Council negotiator Owen Paterson said on Tuesday that he had attempted to block any measure that went against his market fundamentalism in CAP talks. Girling said on Wednesday, "Old-fashioned market intervention is back in a big way, potentially taking us back to the bad old days of butter mountains and wine lakes."

However, European Environmental Bureau policy officer Faustine Deffossez was equally dispirited when the key reforms were announced. The Bureau, a federation of 140 green and citizens groups from across Europe, "strongly condemned" the deal, particularly the erosion of 'greening' commitments, which it warned would exempt "at least 35.5 percent of EU farmland… from EFAs and 46 percent from meaningful crop diversification."

EEB said "The priority in the end of the negotiations was to strike a deal at all costs and the first in line to be sacrificed was the environment. At a time when EU governments are slashing government budgets, it also leaves the policy without any justification for continuing to eat up up to 40 percent of the EU budget."

The Bureau's agriculture spokesperson Faustine Defossez said, "Today EU negotiators have agreed to ask taxpayers to keep on spending hundreds of billions for the next seven years on a policy which will continue to damage our natural resources and threaten our long term food security. We are aware that some important details still have to be decided in the months to come, but at this stage no cosmetic change could hide this complete failure for people, farming and the environment."