A major step has been taken towards finalising CAP reform after European policymakers resolved a series of outstanding issues.
Under the agreement, reform will give individual countries unprecedented flexibility in deciding how payments are made to farmers. Payments will be reduced to larger farms, although an absolute limit on how much money can be received will be voluntary (see box).
The long-awaited political deal marks a major step towards the final CAP reform package. It paves the way for transitional arrangements to be introduced from 1 January 2014 before a new CAP comes into force a year later.
- Individual countries will be able to transfer up to 15% of direct payments to rural development measures. It won’t need to be co-financed. DEFRA is expected to take advantage of this measure in full, meaning farmers in England will have to work harder for support.
- Basic support payments worth over €150,000 Euros to individual farms will be compulsorily reduced by at least 5% and the money used to fund rural development measures. To take account of employment, salary costs may be deducted before the calculation is made.
- An absolute upper limit on direct payments will be voluntary and down the the discretion of individual countries. This allows member states and regions to introduce capping if they wish, but it is not expected to be implemented in the UK.
Once reform is in place, farmers will almost certainly have to work harder to receive support – in England at least. DEFRA intends to use 15% of direct payments for rural development measures -– despite NFU claims that doing so will leave English farmers at a competitive disadvantage.
Agreement between the European Commission, farm ministers and MEPs was reached on Tuesday (24 September). The European parliament’s agriculture committee is expected to rubber stamp the deal on Monday (30 September) before a vote by all MEPs later this autumn.
European farm commissioner Dacian Cioloș said a swift formal vote would allow transitional arrangements to be adopted and applied. “This is important for European farmers as it provides them with greater certainty for the coming year.”
NFU policy director Martin Haworth said it was important that implementing rules were quickly settled. “Farmers need to be able to plan their businesses. Our focus will now turn to DEFRA to ensure the way reform is applied in England allows our farmers to compete fairly.”
In Scotland, rural affairs secretary Richard Lochhead has already announced that EU funding due to finish at the end of 2013 will continue for another year. It includes direct payments worth about £500m and “as much as possible” of Scotland’s £1.2bn rural development programme.
A consultation by the Welsh Assembly government on its proposals for direct payments is due to end on 8 November. Farmers fear a two-tier system favoured by the government would pay just £42/ha for moorland compared to £204/ha for more productive land.