Agriculture ministers meeting in Luxembourg reaches agreement.
EU negotiators clinched a deal on the Common Agricultural Policy (CAP) on Friday which will reform its huge farming subsidy programme, aiming to make it greener and support smaller farms.
CAP, worth around a third of the EU’s 2021-2027 budget, will spend €387bn ($474 billion) on payments to farmers and support for rural development.
The new rules will apply from 2023.
Farming accounts for 10% of EU greenhouse gas emissions, but the 27 EU member states and the European Parliament have squabbled for three years over what to do about it.
Roughly 80% of CAP payments go to 20% of the beneficiaries, with big landowners and agro-industrial firms receiving much of the cash.
The reform is also intended to route more money to smaller farms.
Here are the key parts of the deal:
- Eco-Schemes, Green Standards;
The new CAP would require countries to spend 20% of payments to farmers from 2023-2024, and 25% between 2025-2027, on eco-schemes that protect the environment.
Any funds below those limits that are not spent on eco-schemes must be spent on green measures in other areas.
Eco-schemes could, for instance, mean restoring wetlands to absorb CO2, or organic farming.
Parliament had wanted a 30% share, while member states’ starting point was 20%.
All payments would be tied to minimum environmental rules, such as farmers setting aside 3% of arable land for areas where nature can thrive, or rotating crops annually to boost soil health.
Some EU lawmakers said the rules contained loopholes that failed to align farming with the EU’s climate targets. Campaigners said the deal lacked a clear definition of an “eco-scheme”, thus failing to ensure that money would not go to more polluting farming practices.
- National Plans;
Each country must submit a plan for spending its share of the CAP to the European Commission, which will assess whether it meets legally-binding EU targets.
These could include the bloc’s aim to cut net greenhouse gas emissions 55% from 1990 levels by 2030 but are unlikely to include targets that are not yet legally binding, such as halving the use of chemical pesticides by 2030.
- Small Farms;
A major goal is to stop the decline of Europe’s small farms.
The draft agreement would oblige each EU country to redistribute a minimum of 10% of payments to farmers to smaller farms.
Countries could dodge this requirement if they use other methods to distribute the funds fairly – which member states had pushed for in the talks.
Parliament had pushed, unsuccessfully, for an annual cap of 100,000 euros per beneficiary.
- Who Counts As A Farmer?
The new CAP says countries should use criteria like income tests to define who is an ‘active farmer’ and can receive subsidies – another attempt to stop large businesses and landowners sucking up money.
Parliament wanted a stricter definition that would exclude large-scale processors of agricultural products and stop funds going to non-agricultural businesses such as waterworks.
Countries must give roughly 3% of subsidies to young farmers, under the age of 40, to help attract new talent.
The deal also creates a €450m crisis fund in case agricultural markets are disrupted by an emergency such as a pandemic.
(Source – Irish Examiner – Reuters – 28/06/2021)
CAP: What’s The Deal With Eco-Schemes?
The deal on the future of the Common Agricultural Policy (CAP) has received extensive coverage since it was agreed last Friday (June 25).
Since then, the details of the agreement have become widely known. One particular aspect of the agreement carries huge importance in terms of how farmers will be paid when the new policy comes into effect in 2023 – namely eco-schemes.
Eco-schemes will be a new feature of CAP. These schemes are mandatory for member states to introduce but voluntary for farmers to take part in.
However, the eco-schemes are funded through Pillar I, meaning they will comprise a proportion of the budget for direct payments.
As has already been reported, the deal will require member states to ringfence 25% of their direct payments budget for eco-schemes. This 25% figure applies across the whole period of the new CAP – 2023 to 2027.
For eco-schemes, a ‘learning period’ will be in place for the first two years – 2023 and 2024. During this period, there will be a ‘floor’, whereby member states will be required to allocate at least 20% of their direct payments budget to eco-schemes.
During the learning period, ringfenced funding for eco-schemes that are not paid out (for example, in the case of a low-uptake of the schemes by farmers), can be partially or wholly re-allocated to other areas of CAP.
In 2023 and 2024, member states will be allowed re-allocate up to one-fifth of unused eco-scheme funds per year (up to 5% of the annual national direct payments budget, and 10% of the combined 2023 and 2024 direct payments budget).
However, any unused funds below the 20% floor in the learning period will have to be compensated for by the end of the CAP in 2027.
This can be done by one of the following three “compensation mechanisms”: compensation in Pillar I (direct payments) by directing an increased amount of funds to eco-schemes; compensation in Pillar II (rural development) by transferring funds over from Pillar I for environmental and climate interventions under the second pillar; or through an outright loss of those funds not used during the learning period.
Speaking at a press conference today, Minister for Agriculture, Food and the Marine Charlie McConalogue said “we have to get a good balance on eco-schemes to max the uptake to the level of funding that’s available”.
“It’s going to be important that we frame eco-schemes that are accessible for farmers. I want to create a situation where farmers are able to participate and avail of the funding under the eco-schemes.
“We have engaged through the CAP consultation committee with some proposals around how we would do that. There’s a lot more work and detailed engagement involved with farmers over the next few weeks in relation to tying down how we can ensure that the schemes are accessible and that farmers take them up,” the minister observed.
(Source – Agriland – Charles O Donnell – 30/06/2021)