Brussels, 24/08/2011 (Agence Europe) - The European Commission is due to adopt a package of legislative proposals on 12 October on the reform of the common agricultural policy (CAP) after 2013, when the EU's current multiannual financial framework comes to an end. The first suggestions as to what will be included in the proposals have already leaked out into the press: the removal, by 2019, of historical bases (reference to production over previous years) in calculating aid, a cap of aid to farmers, the greening of some direct aid and crisis and price volatility management measures.
Price volatility has hurt several sectors, including the dairy and, more recently, beef sectors, over the last few years. The Agriculture Directorate General, under Commissioner Dacian Cioloº has been calling for the past year for a “tool box” so that uncertainty of income and price volatility can be more effectively managed. This tool box, which would be optional and co-financed by national budgets, would, according to leaked papers, include insurance contracts, mutual funds to which farmers could contribute to protect themselves against health crises or extreme climate events, and also compensation in the event of loss of over 30% of average income over the previous three years.
Greening. The Commission will also propose that payment of a proportion of direct aid be conditional on certain environmental obligations being met. This “greening” could affect up to 30% of aid, according to the proposals on the next multiannual financial framework (2014-2020), set out by the Commission in July. Conditions that have to be met could be diversification of crops (at least three different varieties, each covering more than 5% of the farm's arable land), maintaining permanent meadows, and devoting 5% of land area to environmental purposes.
Sharing of aid. The Commission is recommending a change to the way in which direct payments are made, with aid being redistributed and better targeted. Discussions within the Commission are continuing on the thorny issue of the formula for dividing out the CAP budget among older and newer member states. The countries which have recently joined the EU believe that the current system of apportionment, based on past records of production, works against them. The Commission is proposing to replace this system with a uniform method of calculation by 1 January 2019, but remains somewhat vague over the criteria that will have to be taken into account.
The Commission has yet to reach a decision on how to define “active farmers”, to whom it intends to reserve CAP aid in future. At the end of June, the EU Court of Auditors was critical of the fact that sports and leisure clubs, rail companies, airports, schools and campsites had received agricultural subsidies.
Capping. Also with the aim of better sharing out support among farmers, the Commission plans to progressively cap aid, from €150,000 upwards. Direct aid will no longer be able to exceed €300,000 per annum. The cap will affect 20% of the aid within the range of €150,000 to €200,000. For aid of between €200,000 and €250,000, the cap will rise to 40%, then to 70% for aid of up to €300,000 and 100% beyond that. The proposals will take account of the number of employees so as not to penalise large, job-creating, farms. “Environmental” aid will not be affected by this cap.
It should be noted that a number of countries, including the United Kingdom, Germany and the Czech Republic, oppose the capping of aid. Presidency conclusions (of 17 March) on the reform of the CAP after 2013 speak of the firm opposition of some member states to the introduction of an upper limit on direct payments to individual large farms. (L.C./transl.rt)