Policy Markets

Brussels Common Policy Reforms Met With Satisfaction

EU – Progress and improvements have been made by the Agricultural Committee in the latest round of CAP reforms but there are still many individual issues that need addressing.

28 January 2013

3 minute read

Alterations made by Member of European Parliaments's (MEPs) earlier this week have been described as creating a fairer and more flexible policy subsidy system by the European farming community.

This is a great improvement on the CAP proposals 18 months ago which were met with widespread disappointment, lobbying organisations have said.

Imperfections have been noted across Europe, however. In the UK the Country Land and Business Association (CLA) has said that funding restructuring possibilities could pose a threat to agricultural competitiveness.

“The UK Government must not use any greater flexibility to switch funds between Pillar One and Pillar Two in a way that could threaten the competitiveness of UK farmers," said Harry Cotterell, President of the CLA.

"The proposals put forward by MEPs could easily lead to UK farmers receiving considerably less than their counterparts on the continent. The Common Agricultural Policy should have rules that, wherever possible, are common to all its members."

Also the target of criticism is the emergence of the potential for recoupling of 10-15 per cent of support payments. This has been called a ‘backwards step’ by the National Farmers Union that will distort the market.

Meurig Raymond, NFU Deputy President speaking on the issue of coupled payments said: “If not closely controlled by the Commission the EU could potentially into hot water with the World Trade Organisation.”

“Similarly MEPs voted to increase the flexibility to move money between the two pillars of the CAP up to 15 per cent, the only slight glimmer in that area, being that MEPs did respond to the incredibly important NFU call that this money would have to be match funded by national treasuries,” added Mr Raymond.

Another issue of contention was the capping of payments for farms taking €300,000 and above. Mr Raymond added that by supporting capping of payments to the largest beneficiaries MEPs are putting UK farmers under disproportionate pressure due to UK farm sizes being larger than the EU average.

Contrastingly, the reaction to fund capping in Spain has been markedly different with the Union of Small Farmers and Ranchers (UPA) stating that the €300,000 cap was too high.

Instead, Spanish concerns focused on the greening element of the reforms. The UPA said crop diversification proposals will put some farmers in difficulty due to restrictions on cropping and rotations.

The general consensus across the Spanish farming community was of satisfaction welcoming the flexibility of the policy. The recoupling of payments has been welcomed by the Coordinators of the Farmers and Ranchers Organisations (COAG) who also approve of updated ‘active farmer’ legislation that will review farm payments further on a member state basis.

Active farmer proposals involve member states listing businesses with land as a secondary interest i.e. sporting locations and airports and assessing the importance of food production to their income and reviewing their payment entitlements accordingly.

The German Farmers Association (DBV) has said that the Agricultural Committee’s proposals have increased Bureaucracy. By implementing greening measures on a EU wide level the EU is creating a complex executive system.

Whilst approving of the greater flexibility proposed for greening cross compliance the DBV has suggested that member state implementation would make CAP enforcement easier.

Confusion over payments has emerged from Scottish politicians who are otherwise generally satisfied with MEPs’ conclusions. Agricultural Spokesman, Alyn Smith, said: ”A double funding passage whereby farmers would get paid twice to do the same thing in the rural development report will need to be cleared up in plenary or in trialogue negotiations or we will have legal issues to deal with before we even begin.”

"If this is the general shape of the Parliament's position as we head into negotiations then I think Scottish farming is sitting in a promising position for the next CAP."

Continued progress is essential to the farming organisations across the EU who will continue working closely with MEPs. More will be decided at the European Parliament’s plenary session on the CAP in March this year.