Prospects for the Common Agricultural Policy 2021 – 2027: Why the CAP needs a radical reform

This article first appeared in Bio Eco Actual, BIOFACH special edition, February 2020 
and online on

https://www.bioecoactual.com/en/2020/01/30/prospects-for-the-common-agricultural-policy-2021-2027-why-the-cap-needs-a-radical-reform/, 30/01/2020

At its inception, the Common Agricultural Policy (CAP) aimed at feeding thousands of Europeans after the damages caused by the Second World War. This goal was reached within a few years, leading to massive overproduction.

Since the 1960’s the CAP is the main support mechanism for farmers in the European Union (EU). As farmers’ average wages continue to decline, food prices remain volatile and climate change impacts crop production, ongoing support for a struggling sector is key. Yet, direct payments, which form the first pillar of the CAP and amount to nearly 75% of the actual CAP budget, are not equally distributed. They are ill-targeted, incentivising farmers to only fulfil the policy’s minimum requirements without contributing to the protection of the environment and climate.

This is why Europe needs a paradigm shift to a CAP that rewards farmers for providing good and healthy food as well as for caring for our public goods, like our soils, biodiversity or water resources. Organic farming contributes to a sustainable food and farming sector while satisfying citizens’ preferences. Yet, a large-scale conversion to organic is only possible if the CAP’s ambition is revised upwards, allowing more farmers to make the necessary additional efforts and investments.

The CAP revision should reward farmers who deliver public goods

The organic movement’s vision for the new CAP
Since its creation, the CAP has undergone significant reforms. The creation of Rural Development (Pillar 2) was crucial for developing organic farming and other sustainable farming practices. In 2013, the new ‘greening’ component was added to the direct payments. However, due to the low ambition of requirements for greening, it has not led to a real change in farming practices. To make the CAP a policy that delivers on social, economic and environmental objectives, it should build on the Commission’s proposal of June 2018 to raise the level of ambition. It should include the so-called ‘New Delivery Model’ and go even further by balancing environmental ambitions with a robust results-based framework.

Result-oriented

Introducing a ‘New Delivery Model’ based on EU-wide results is a major shift. The current management-based system centralises power within the European Commission, while the new model will decentralise power. Granting more flexibility to Member States and regions in designing their own Strategic Plans can help to adapt the CAP to local realities. Yet, this approach can only succeed with a robust European governance in place to avoid fragmentation of the EU’s agricultural sector, to ensure a level playing field and avoid a “race to the bottom” among Member States.

Direct payments, which amount to nearly 75% of the actual CAP budget, are not equally distributed

On top of that, the indicators used to measure the environmental, social and economic CAP objectives should link to actual impacts as much as possible. This would ensure that measures that have a real effect on the ground are financially rewarded. Moreover, the list of CAP indicators should be evaluated and complemented on an ongoing basis. During the design phase of their CAP Strategic Plans, Member States should also be required to analyse the health of their organic farming sector, enabling them to draw strategies for the sector’s further development under the next CAP.

Tackling causes rather than treating symptoms

The CAP revision should reward farmers who deliver public goods and leave behind the logic of compensating farmers only for “lost revenue”. It is important to allow Member States to offer attractive premiums to farmers who wish to do more for the environment and climate. A combination of the different tools of both CAP pillars should be encouraged, such as the multi-annual agri-environmental measures of Pillar 2, for example for conversion to organic farming, and the annual eco-scheme (a new tool that can support sustainable practices, such as organic farming) of Pillar 1.

Avoiding a race to the bottom

Strong common safeguards should counterbalance the increased flexibility of the CAP. Ambitious ‘ringfencing’ of at least 70% of the entire CAP budget across both pillars can avoid a downward spiral for the climate and the environment.  Eco-Schemes should be better defined and favour farming systems that provide many environmental benefits, including organic farming and agroecology. Furthermore, the new CAP should keep and reinforce the ‘no backsliding’ principle that ensures that Member States cannot roll back existing environmental measures or ambitions.

Europe needs a paradigm shift to a CAP that rewards farmers for providing good and healthy food

Challenges and ongoing negotiations
Disappointing vote by the previous Agriculture Committee of the European Parliament

In April 2019, the previous Committee on Agriculture and Rural Development (COMAGRI) voted on changes to the CAP proposal from the Commission. The European organic movement finds that these are inadequate to meet environmental challenges and the needs of the sector. Some positive elements of the AGRI Committee’s vote include the ringfencing of 20% of direct payments for Eco-Schemes and the limitation of the flexibility for moving money from Pillar 2 to Pillar 1. Still, the maintenance of the direct payments model and the will to attribute at least 60% of the Pillar 1 budget to untargeted “income support” shows that the ‘business-as-usual’ approach prevailed with the previous AGRI Committee. Moreover, by removing the former obligatory Ecological Focus Areas (EFAs) and limiting the protection of wetlands and peatlands to Natura 2000 areas, the European Parliament has weakened the minimum environmental requirements that all farmers must respect (the so-called conditionality).

Factors influencing the upcoming negotiations

The composition of the European Parliament has changed with the elections in May 2019. This means that the newly elected Members of the European Parliament will have their say in the reform process before the final vote in plenary in early 2020. At the time of writing this article, a new rapporteur and shadow-rapporteurs are about to be appointed on the three regulations making up the CAP reform, namely the Common Markets Organisation (CMO), the Horizontal Regulation and the Strategic Plans.

It is important to allow Member States to offer attractive premiums to farmers who wish to do more for the environment and climate

Concerning the Strategic Plans regulation, which is the most controversial, new compromise amendments may be added to the original report of the AGRI committee. Negotiations within the European Parliament may also impact the vote as the Committee on Environment, Public Health and Food Safety (COMENVI) is an associated committee under rule of procedure 57. COMAGRI and COMENVI will need to cooperate on the most pressing issues, such as the CAP’s green architecture, to ensure a comprehensive approach and a common position before the trilogue negotiations with the Commission and the Council, foreseen in 2020.

IFOAM EU strives to influence the new compromise amendments in order to ensure that environmental measures from both pillars are ambitious and designed effectively. In addition, we aim at the inclusion in the final compromises of an obligation for all Member States to conduct an analysis of their organic sector’s production, expected demand and needs within the framework of their National Strategic Plans.

 

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