Political Agreement on the CAP – is this really a paradigm shift for the environment?

Achieving a political agreement on the CAP reform last week was undeniably a huge achievement given both the controversial nature of some of the proposals and that this was the first full reform involving co-decision with the European Parliament as well as 27 Member States.

However, recognition of this achievement does not detract from the fact that this is a deeply disappointing reform for the environment. It is of course highly significant that, in principle, greening has been made much more central to the Pillar 1 and that 30 per cent of farmers’ direct payments is now intended to be focussed on the environment. This is an important principle which can be built on in future reforms. There is also much more emphasis on the need to take action to address climate change. However, in practice, the content of what will be required of farmers diminished steadily as the negotiations proceeded, as did the proportion of farmers who would be affected by the greening measures. At the end there was some relief that a solution had been found to avoid the misuse of taxpayers’ money through double funding the green measures both in Pillar 1 and again under rural development policy.

In stark contrast to the Commission’s original proposals, the introduction of the Ecological Focus Area (EFA) measure into Pillar 1, which could have engendered a real change in the management of cultivated areas in the EU, now only applies to five per cent of arable areas over 15 hectares. Permanent crops are no longer included. This may rise to seven per cent if ‘justified’ following an evaluation in 2017. The final list of features agreed as forming part of an EFA has been extended considerably and now includes: land laying fallow, terraces; landscape features, including those adjacent to eligible agricultural areas covered by arable land; buffer strips, including those covered by permanent grassland; agro-forestry and new afforestation supported under EAFRD; strips of land along forest edges without cultivation; short rotation coppice; areas with catch crops or green cover established by the planting and germination of seeds; and nitrogen fixing crops.

Significant exemptions are also in place which apply to all farms: where over 75 of the eligible agricultural area is permanent grassland, used for the cultivation of grasses or other herbaceous forage or with crops under water; and where over 75 per cent of the arable area is used for the production of grass, herbaceous forage, land laying fallow or cultivated with leguminous crops. On these last exemptions alone, Eurostat figures indicate that 34 per cent of land would be exempt from the requirements and potentially more once the area under 15 hectares is taken out of the equation.

The weak environmental content of the reform is not limited to Pillar 1. Cross compliance standards of Good Agricultural and Environmental Condition have been cut back. Some have been replaced by the Pillar 1 greening measures (now with their reduced coverage) but a proposed new standard to protect important unploughed carbon rich soils and wetlands from cultivation was removed. In addition the Water Framework Directive and the Sustainable Use of Pesticides Directive have been removed from the list of SMRs, although the Commission may propose a revision to the regulation to propose their introduction once they have been fully implemented in all Member States. It is difficult to judge when this will be. However, more positively, the European Parliament won a concession that these two Directives must be covered by the Farm Advisory Service to raise farmers’ awareness about their obligations under these both these pieces of legislation.

In relation to rural development policy, the core element of the CAP for delivering funding to achieve real environmental change on agricultural and forest land, as well as rural areas more generally, there is likely to be a real issue with the level of funding available to deliver what is needed. Not only has the overall rural budget suffered a disproportionate decrease compared to that for Pillar 1, but governments have the option to reduce it yet further by shifting a large proportion of their rural development budget to shore up direct payments to farmers (up to 25 per cent for some countries – although this has yet to be formally agreed as part of the Multi-Annual Financial Framework).

For the moment, rural development policy remains the most important part of the CAP from an environmental perspective. Although the budget remains a concern, there are some positive elements. Governments can still transfer a proportion of their Pillar 1 budget to Pillar 2 to increase funding for rural development measures, but this is now voluntary, whereas previously it was compulsory. Member States which have clear opportunities to create sound schemes to pay farmers for public environmental goods should be making full use of this facility. In addition, at the last stage of the negotiations, it was agreed that Member States would be required to allocate a minimum of 30 per cent of their much reduced rural development budget to environmental and climate focussed measures, something that had been proposed by the European Parliament but had not found favour with either the Council or the Commission. This goes beyond the requirements in the current EAFRD, but the range of measures that can be used to make up this percentage has been extended to include investments in physical assets that contribute to environmental or climate objectives. This should be rigorously enforced and evaluated.

There are many elements of redistribution of Pillar 1 direct payments in the reform, including the external and internal convergence, the provisions for small and young farmers, ANC farmers, coupled supports and the various degressivity ideas still not finalised. Combined, these probably will have significant effects on individual farms' payment levels in both directions; there are too many uncertainties and it is too early to judge if, on balance, this will help or inhibit environmentally sensitive land management.

Taken as a whole, does this package really represent the ‘paradigm shift’ towards a fairer and greener CAP that the Agricultural Commissioner has claimed? In practice it is questionable how much additional environmental value will be delivered by the new CAP. The commitments that remain are certainly a far cry from what is needed to address the serious environmental deficit facing Europe over the coming decades. Yet again the fact that a healthy and resilient natural environment is essential for the long term productivity and prosperity of rural areas does not appear enough to justify funding to ensure its protection. To what level will climate change and environmental degradation have to fall before it is accepted that these market failures are the real justification for the bulk, rather than the tail end of agricultural policy?

This reform has done little to stop questions about the rationale for providing large scale support for agriculture in Europe. This debate must continue and urgently in the face of future environmental, economic and climatic pressures on Europe’s land resource. While significant efforts will be focussed on sorting out the implementation of this reform in the coming months, attention also needs to turn to the future of policies for land management in Europe. A fundamental review is needed and before 2020.

For more information, go to the European Commission website.

1 comment posted

  • Daye Tucker Carbeth Home Farm July 6th, 2013

    If large scale support for agriculture is removed will food prices rise? Could food price rises be a good thing leading to respect for food and less wastage? Estates have traditionally integrated their land use and the environment has benefited. More recognition of the environmental benefits produced from estates, by LINK and Scottish Government would be welcome.

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03 Jul 2013