MEPs agree position on CAP reform
The new CAP is still in flux, but a large part of the puzzle fell into place last week when the European Parliament’s 754 MEPs voted to agree a “mandate” for its negotiators to enter the next phase of the decision making process. The NFU’s Gail Soutar takes a look at the key elements of the Parliament’s negotiating position.
- Greening
- Coupling
- Modulation
- Cross compliance
- Move to flat rate
- Capping
- Sugar
- Areas facing natural constraint
- Crisis management in dairy sector
- NFU reaction
The EU Commission’s plans to link 30% of the future direct payment to three actions for the environment was supported, but MEPs failed to agree how best to introduce greater flexibility for member states. MEPs agreed that farmers could in theory walk away from the 30% aid but retain access to the remainder of the payment without penalty. The three greening requirements themselves, crop diversification, ecological focus areas and retention of permanent grassland were heavily amended to make them more flexible and less damaging to production.
Farmers with more than 10ha of arable land would have to grow two different crops on that land, and those with more than 30ha would have to grow three different crops. The ecological focus areas (EFA)- EU speak for environmental set aside – has been cut from 7%, to 3% in the first year and 5% in subsequent years. A wide array of features, including nitrogen fixing crops and land used for production but without pesticides or fertilisers could count as EFA. The requirement to maintain existing areas of permanent grassland at farm level has been elevated to a requirement for member states to retain the existing ratio of land under permanent grassland to the total agricultural area at a national, regional or sub-regional
MEPs supported increasing the scope of coupled support to 15% of a member states envelope and broadened the scope to potentially cover all agricultural sectors.
Member states may transfer 15% of their direct payment envelope into their rural development envelope. MEPs defied a recent decision by the European leaders by demanding that this money should be co-financed by national Treasuries.
Despite MEPs on the agriculture committee voting to erase large parts of cross compliance from the future CAP, when it came to the vote of the full house, the majority of MEPs voted to put them back in again, with the exception of the water framework directive and a ban on first ploughing of carbon rich soils. This means that previous gains that would have removed sheep EID from the list of cross compliance measures has been lost. MEPs did however support efforts to make the penalty system more proportionate and have introduced a new yellow card system which should help farmers avoid penalties for minor breaches
MEPs increased the flexibility around the move away from the historical payment system to the flat rate area system. They agreed that by 2019 all payments in a region must have a uniform unit value, but this may deviate from the average unit value by up to 20%. Member states may also take measures to ensure that the level of entitlements activated in 2019 is not more than 30% below that of 2014.
MEPs voted in favour of capping as proposed (with a derogation for co-operatives and bodies that group together payments on behalf of beneficiaries). Any capping monies transferred to Pillar 2 would be required to be match-funded by member states.
Sugar quotas would be retained to the 2019/2020 growing season and MEPs reinstated the powers for organisations like NFU sugar to collectively negotiate on behalf of growers.
Areas facing natural constraint
MEPs called on the commission to present a legislative proposal by 31 Dec , 2014 on the designation of areas facing natural constraints (ANCs). This legislative proposal should provide details on the “mandatory bio-physical criteria and the corresponding threshold values to be applied for the future delimitations, as well appropriate rules for fine-tuning and transitional arrangements
Crisis management in dairy sector
The parliament supported a new crisis management tool in the dairy sector once quotas end in 2015 which would require those producers who had increased production to pay a penalty, whilst an aid would be paid to those famers who had cut production.
NFU deputy president Meurig Raymond, thanked MEPS for their efforts but the NFU remains concerned by a number of elements.
“We have impressed on MEPs the importance of devising a CAP which creates the right conditions for farmers to produce high quality food for a growing population. We are somewhat relieved therefore to see the Commission’s ludicrous proposal to set-aside 7% of land for ‘Ecological Focus Areas’ slashed to 3% by MEPs and that farm level restrictions on ploughing of permanent grassland will not be brought in, in the first instance.
Referring to the decision to increase coupled aid, Mr Raymond said “It is essential, when competing on a single market, that distortions between farmers are kept to a minimum. We are deeply disappointed, therefore, that MEPs have taken a step back in time by supporting increased amounts of coupled support which will lead to market distortions and reduces the industry’s market orientation. Another aspects that deeply concerning is the power to transfer up to 15% of the direct payments envelope to rural development as modulation.
The NFU is also very concerned with measures in the dairy sector that would result in increased market management once the dairy quotas end in 2015. The industry has worked for many years on the basis that milk quotas would end and the sector would be free to respond to market demands. Introducing a measure, which would penalise farmers who had increased production while granting an aid to those who had cut production, is a retrograde step.
The NFU is pleased that MEPs have approving new measures to ease the burden of inspections and bring in more proportionate fines for minor offences. Mr Raymond said “Too often farmers are fined substantial sums of money for mistakes beyond their control. However it is deeply disappointing that MEPs voted to reinstate many of the cross compliance requirements that MEPs on the Agriculture Committee had previously voted to remove, particularly the hugely burdensome and controversial sheep EID regulations.”
Watch a video summary of the main points from EU Parliament