Brussels, 04/04/2012 (Agence Europe) - EU member states are divided over aid ceilings for large farms and a majority of them support the new aid payments proposed by the European Commission relating to reform of the common agricultural policy (CAP): aid to young farmers, a payment scheme for small farms, and special aid for vulnerable sectors.
With a view to the EU agriculture ministers' debate on 26 April in Luxembourg on reform of direct payments, experts from the Special Committee on Agriculture (SCA) initiated technical discussion, on Monday 2 April, on a number of measures foreseen relating to small farmers, young farmers, the “coupled” option, and the capping of aid for large farms. The SCA on 16 April will continue the debate on these specific aspects of the direct payments regulation: disadvantaged regions, “active farmers” and payment rights. On 23 April, the SCA will be devoted to the following: greening of direct payments, eco-cross compliance and flexibility between Pillar 1 (direct payments and market spending) and Pillar 2 (rural development programmes) of the CAP.
Measures for young farmers. The Danish Presidency takes the view that it will be up to agriculture ministers to take a stance on whether the “young farmers” regime should be voluntary or compulsory. Many delegations (including those of France, Poland, Sweden, Germany and Romania), among those who took a stance at the SCA, were in favour of voluntary measures.
Again at the SCA, a very large majority of member states - including France, Germany, Italy, Spain, Hungary, Poland and the United Kingdom - support the measures proposed by the Commission in favour of young farmers. One can sum up by saying that these countries consider such measures are the only way to reverse the trend of an ageing population in rural areas. The Commission suggests that aid should be provided for young farmers under Pillar 1 (direct payments and market spending) of the CAP. Several delegations - like Poland, Sweden and the Netherlands - consider such measures should come under Pillar 2 of CAP (rural development). Others, like Germany, take the view that, even though the second pillar is the most appropriate for such measures, the first pillar is acceptable if the system is voluntary or if, as France and the United Kingdom say, there is enough flexibility to “juggle” between the two pillars.
By “young farmer”, the Commission means any natural person who is managing a farm for the first time, or who has set up a farm over the five years preceding the first introduction of a request under the basic payment system. A young farmer must also be under 40 years of age at the time of making the request for aid payments. The age-related criterion is well accepted by most member states except, for example, Romania, Bulgaria and Greece, in particular, who call for an upper age limit to be set. The Commission provides certain maximum limits for its support to young farmers, including an average size for farms that must be below 25 hectares. Countries are more divided over the criterion relating to agricultural surface area (less than 25 ha). Some consider it to be fair, like Ireland, Austria and the Netherlands, while others, such as Italy, Finland and Slovenia, want the geographical diversity of the countries to be taken into account and for a higher limit to be set. The limit for the funding of such measures (under 2% of the country ceiling), is deemed correct by some countries, like Hungary and Austria, while other are calling for an increase in this percentage and for more leeway at the national level.
Support for small farmers. It comes as no surprise that many delegations (Poland, Spain, France, Romania, United Kingdom and Sweden) have noted that measures proposed must be simplified, given the sizeable administrative burden that they entail. Some countries (Poland, the Czech Republic, Romania and Italy) have mentioned the risk of large farms being split into smaller fragments if such measures are taken. The question of excluding the small farm payment scheme from eco-cross compliance obligations (payment of aid on condition that certain criteria, especially environmental criteria, are respected), gives rise to divergence. Some countries (Germany, Poland, the Netherlands and the United Kingdom) underline that small farms must comply with the same obligations as the others, while other countries (Italy, Greece, Portugal and Austria) consider that the low surface area of small farms (less than 3% of cultivable surface area) should allow them to be exempt from such heavy administrative measures. Most delegations (Poland, Sweden, France, Germany, Romania and the United Kingdom), who spoke out at the SCA, call for these measures to be voluntary.
Voluntary coupled support. According to the Commission's proposal, member states may grant coupled aid (aid that maintains a link with volumes produced) for farmers under certain conditions. Coupled aid may be granted for the following sectors and productions: cereals, oilseeds, protein crops, grain legumes, flax, hemp, rice, nuts, starch potato, milk and milk products, seeds, sheepmeat and goatmeat, beef and veal, olive oil, silk worms, dried fodder, hops, sugar beet, cane and chicory, fruit and vegetables and short rotation coppice. Voluntary coupled support is favoured by most EU countries (including Poland, Spain, France, Finland, Italy and Romania) because it is a useful tool for supporting a number of fragile sectors. Only a few delegations from so-called liberal countries (such as Sweden and the United Kingdom) consider this kind of aid runs counter to the uncoupling reasoning that should steer the CAP.
Some countries, like Germany and Poland, have underlined the risk of creating competition distortion. Others, such as Hungary, Poland, Italy and Finland, consider the list of eligible products is too limited and that other products could be added. And then still other countries, such as France, Spain and the Czech Republic, believe a state should enjoy greater latitude for determining which vulnerable sectors should be given support.
Aid capping. The Commission's proposal is as follows: - the amount of direct payments to be granted to a farmer under this regulation in a given calendar year should be reduced as follows: - by 20% for the tranche of more than €150,000 and up to €200,000; by 40% for the tranche of more than €200,000 and up to €250,000; - by 70% for the tranche of more than €250,000 and up to €300,000; and by 100% for the tranche of more than €300,000 (aid capping at €300,000). As usual, EU countries were greatly divided over the capping principle. Many remain highly sceptical (for example, Sweden) or are opposed to the measure (United Kingdom, Czech Republic, Germany, Romania). Other delegations (France, Spain, Italy, Finland, Bulgaria) consider the capping is legitimate even though the system proposed appears very complex. It also seems a constant problem for several countries to take into account the cost of work. Delegations in favour of capping (Italy, Austria) spoke of the possibility of using a lump sum approach to simplify matters. Poland and the United Kingdom evoked the risk of farms being split into smaller parts. (LC/transl.jl)