Brussels, 04/07/2011 (Agence Europe) - The financial framework proposed by the European Commission for the period from 2014 to 2020 “is a good result for the CAP (future common agricultural policy) in the current economic climate”, according to European Agriculture Commissioner Dacian Cioloº. The Commission has proposed freezing agriculture sector expenditure at its 2013 level - €371.7 billion over the seven years, compared with €417 billion for the current 2007-2013 programming period (inflation adjusted to 2011 values). It is planned that the percentage of the EU budget devoted to the CAP should drop on average from 39.4% to 36.2%.
Chairman of the European Parliament (EP) agriculture committee Paolo De Castro has said that what is being proposed by the Commission “is not a freeze but a concealed reduction in CAP resources, especially for the single payment scheme”.
According to the Commission's 2014-2020 financial framework proposal, €281.8 billion would be allocated to direct aid and agricultural market measures over the seven-year period and €89.9 billion to rural development. This funding will be complemented by a further €15.2 billion: €4.5 billion for research and innovation on food security, the bio-economy and sustainable agriculture (in the common strategic framework for research and innovation), €2.2 billion for food safety, under Heading 3 (security and citizenship), €2.5 billion for food support for the most deprived persons, under Heading 1 (smart, inclusive growth), €3.5 billion in a new reserve for crises in the agriculture sector and up to €2.5 billion in the European Globalisation Fund. This gives a total of €386.9 billion for agriculture in the EU.
Provision of food to the most deprived would, then, fall within the remit of the European Social Fund, with intervention stocks being used to support the scheme. The European Globalisation Find could, in future, be used to address the consequences of market opening (for example, the impact of an agreement with Mercosur).
“It is a budget which will allow us to carry out substantial reform of the CAP”, said Cioloº, speaking about the proposals for the next financial framework. These proposals somewhat prefigure the legislative proposals on the reform of the CAP, which the Commission is due to adopt in October 2011, on the greening of the common agricultural policy and capping of aid to farmers.
Greening of direct payments. To ensure that the CAP helps the EU deliver on its environmental and climate action objectives, beyond the cross-compliance requirements of current legislation, “30% of direct support will be made conditional on 'greening'”, the Commission document states. This means that all farmers will have to adopt environmentally friendly practices which will be defined in legislation and verifiable. This greening will shift the agriculture sector significantly in the direction of greater sustainability, with farmers receiving payments to deliver public goods to their fellow citizens.
Convergence of payments. To ensure a more equal distribution of direct support while taking account of the differences that still exist in wage levels and input costs, the levels of direct support per hectare will be progressively adjusted, the Commission says. This will be achieved in the following way: over the period all member states with direct payments below the level of 90% of the average will close one third of the gap between their current level and this level. “This convergence will be financed proportionately by all member states with direct payments above the EU average.” Equally, the allocation of rural development funds will be revisited on the basis of more objective criteria and better targeted to the objectives of the CAP. This will ensure fairer treatment of farmers performing the same activities. To enable the CAP to respond to the challenges related to the economic, social, environmental and geographical specificities of European agriculture in the 21st century and contribute effectively to EUROPE 2020 objectives, the Commission will bring forward proposals to permit flexibility between the two pillars.
Capping. The Commission advocates capping the level of direct payments “by limiting the basic layer of direct income support that large agricultural holdings may receive, while taking account of the economies of scale of larger structures and the direct employment these structures generate”. The Commission proposes that the savings be recycled into the budgetary allocation for rural development and retained within the national envelopes of the member states in which they originate.
The Commission considers that these new points can be accommodated under the current two-pillar structure of the CAP. The future CAP will, therefore, contain a greener and more equitably distributed first pillar (direct aid and market spending) and a second pillar (rural development) that is more focused on competitiveness and innovation, climate change and the environment.
Reactions. COPA-COGECA has said that the Commission's proposals are “a reasonable starting point”. COPA President Gerd Sonnleiter said: “This is nevertheless a tight budget especially given the huge challenges facing EU farmers”. He welcomed the fact that the Commission has provided more money for research and crisis management measures “but more emphasis needs to be put on green growth, not green constraints”.
European Coordination Via Campesina called for a higher budget for the EU and argued for maintenance of the same level of agricultural budget and for a financial transaction tax. It called on the Council and the European Parliament, however, to agree post-2013 CAP reform that is “more legitimate socially, environmentally and internationally than the current proposal”.
The European Council of Young Farmers (CEJA) welcomed the proposal not to cut the EU budget for agriculture during the 2014-2020 period, but remains concerned over allocation of funding. Greater attention must be paid to young farmers in the next budget CEJA says. (L.C./transl.rt)