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Change in the course of EU agricultural policy?

The impact of agriculture on the environment and climate is enormous. Within the European Union, agriculture is the second-largest emitter of greenhouse gases behind the energy sector (including transport) and ahead of industrial processes and absorbs excessive amounts of natural resources.

In December 2019, the President of the EU Commission presented the European Green Deal (EGD). It is very encouraging that agriculture plays an essential role in this “Farm to Fork” strategy.

The common EU agricultural policy

Until now, the Common Agricultural Policy (CAP) has defined the agricultural course of the EU. It is the second-largest category in the EU budget, with around 40%.  

The EU Member States are currently negotiating the Multiannual Financial Framework (MFF) for 2021-2027. According to current proposals, agriculture is facing significant budgetary cuts: although the amount devoted to agriculture will account for a substantial 28.5% of the total future budget, it is still 15% less than in the previous MFF for 2014-2020. The reductions are not only caused by the British outflow as a net contributor, but also by the shift in priorities of the EU’s funding requirements – migration, external borders, digital economy, transport, etc. are increasingly at the center of attention.

A brief introduction to the CAP

Originally, the CAP supported farmers through the price guarantees – today, it is based on two “pillars”: the first is direct payment to farmers and common market regulation for individual agricultural products. Since 1999, the primary pillar has been replaced by a second – “rural development” – which includes a wide range of measures in the field of agricultural development, environmental and climate protection.

The distribution of funds among the two pillars is not identical. About 80% of the total agricultural support goes to the first pillar, while the second one accounts for about 20%. The large sums of money that flow into the first one benefit mainly large-scale farms. In Germany, for example, three-quarters of direct payments were distributed to 1.7% of these farms between 2014 and 2020.

However, it is wrong to claim that measures supporting environmental protection are only included in the second pillar. First-pillar programs, such as higher subsidies for farms with limited land, and linked payments for certain products, are definitely considered useful from the perspectives of environmental protection and nature conservation.

CAP reforms: Beneficial to environmental protection?

The positive effects of the introduction in 2015 of the ecological reform for direct payments within the first pillar, also known as “greening,” are doubted. According to that, farmers receive 30% of their direct payments (the greening subsidy) only if they actually contribute to specific environmental benefits. In a study by the Bertelsmann Foundation from 2017, regarding greening, it is said: “Experts agree that greening is unlikely to lead to a significant increase in the contribution of farmers to environmental services.”

So the CAP has been in a constant state of change. The proposal for an “implementation model” is currently being discussed. This would give Member States much more freedom to design their “own CAP.”

While critics argue that the CAP is being “nationalized” in this manner, supporters emphasize the modernization and simplification that comes with it. Member States should thus be given space within clear guidelines. The objective of the implementation model has to ensure that the national plans of the member states are based on the goal of ethical, sustainable, and climate-neutral agriculture.

Agricultural policy experts criticize the fact that the Commission’s proposal only requires the Member States to report on how much they invest in certain initiatives and how many farmers apply for the programs, but not on the environmental services actually provided. They, therefore, fear that flexibility would lead to a “race to the bottom.”

Furthermore, 3.600 scientists recently signed a joint letter to the EU Commission. In this letter, they conclude that the current CAP policy is damaging to biodiversity and the climate. They also added to the statement a ten-step plan to ensure long-term food security and to address biodiversity and climate change. The scientists also worry that the “already inadequate” environmental standards could be further reduced in the continuing reform process.

Lots of criticism – so what now?

In May 2019, the new leaders of the European Parliament started to review the amendments to the CAP reform approved by the Committee on Agriculture and Rural Development (AGRI) during the previous legislature. It has become evident that the CAP reform will not be finished by January 2021. The AGRI has therefore agreed on a “transitional regulation” – the urgently required CAP reform could thus be postponed until 2023. One reason for the postponement is the failure of Member States to agree on a long-term EU budget for the period 2021-2027, which is necessary for CAP reform to be completed.

Anna-Marie Peter B.A.
studied political science, economics and philosophy in Regensburg. Since December 2019 she is part of the Shifting Values team in Vienna.

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