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Wednesday, September 25, 2013

Political agreement on last remaining points about the reform of the Common Agricultural Policy (CAP)

Agriculture - Fisheries, Administrations States,

On September 24th 2013, a political agreement was reached by the European Commission, the Council of the EU and the European Parliament on the few last remaining points following the political agreement from the 26th of June 2013 about the reform of the CAP.

A new orientation has been forecast: the CAP will be fairer, will enhance the position of farmer in the food production chain, and will be greener and finally more efficient an... Read more

On September 24th 2013, a political agreement was reached by the European Commission, the Council of the EU and the European Parliament on the few last remaining points following the political agreement from the 26th of June 2013 about the reform of the CAP.

A new orientation has been forecast: the CAP will be fairer, will enhance the position of farmer in the food production chain, and will be greener and finally more efficient and transparent. The 26th of June agreement was dealing with four points: the direct payments, the market management mechanisms, the rural development and a horizontal regulation. The 24th September agreement completes them and should be formally approved by the Council of the EU and the European Parliament. The legal acts on the overall EU budget for 2014-2020 should also be adopted.

Direct Payments, that are the repartition of funds between Member States and per farmers within Member states, will be characterized by a clear and genuine convergence of payments, not only in Member states but also within each Member states. A Greening payment will be introduced and will be linked to rewarding farmers for the provision of environmental public goods.
About “Capping” and “Degressivity”, the external Convergence as well as the transferring funds between Pillars, agreements have finally been found in September:
- the “Degressivity” of direct payments is compulsory and the “Capping” voluntary: this means the compulsory reduction of at least 5% for the amounts above 150 000€, that each individual farm holing can receive.
- the external Convergence will be characterized by a progressive adjustment of national envelopes for direct payments in order to benefit from a minimal financing level by 2019. The Member States where the average payment is below the EU average will see a gradual increase of the amounts whereas the ones who receive above average amounts will be adjusted accordingly.
- Member States will have the possibility of transferring up to 15% of their national envelope dedicated for Direct Payments to their “rural development” envelope and conversely. They won’t need to be co-funded.

The market management mechanisms have been modified in order to improve the orientation of the EU agriculture market as regard the global markets competition. Public intervention and private storage aid (aid to compensate the costs of storage) are revised to be more responsive and more efficient to deal with the external uncertainties to which farmers have to face. In this context and in order to enable the European Commission to take emergency measures to respond to general market disturbances, new safeguard clauses are introduced for all sectors. A Crisis Reserve will fund these measures. On wine products, the planting rights will be replaced, from 2016, by a system of authorizations for new vine planting, including more pro. Finally, a new quota system will be applicable to sugar.

The rural development won’t fundamentally change: Member States will continue to design their own multi-annual programmes in response to the needs of their own rural areas. Regions will have to decide the measures to be used. Six priorities have to be taken into account: Fostering knowledge transfer and innovation, Enhancing competitiveness of all types of agriculture and the sustainable management of forests, Promoting food chain organization, including processing, marketing and risk management, Restoring, preserving and enhancing ecosystems, Promoting resource efficiency and the transition to a low-carbon economy, and Promoting social inclusion, poverty reduction and economic development in rural areas. The September agreement specifies that national allocations are included in the Basic Regulation. Adjustments can be done if it is technically necessary or provided by a legislative act. Co-funding rates are also specified: for most of the payments, the maximum EU co-funding rates will be up to
*85% in less developed regions, outermost regions and smaller Aegean islands
*75% in transition regions
*63% in other transition regions
*53% in other regions
The rates can be higher, amongst other, for the measures supporting knowledge transfer or young farmer installation grants.

The horizontal Regulation will include controls, of which requirements will be lowered in regions where previous checks have shown goods results, the Farm Advisory Service with an enlarged list of issues and the cross-compliant, that means a number of statutory requirements relating to environment, good agricultural condition of land, human, animal and plant health standards, etc. Member States will have to provide full transparency of all beneficiaries. And finally, the European Commission will present a report before the end of 2018 on the performance of the CAP according to its main objectives: viable food production, sustainable management of natural resources and balanced territorial development. Hide

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