Brussels, 25/02/2013 (Agence Europe) - In Brussels on Monday 25 February, most of the “old” countries of the EU gave a reasonably positive welcome to the text of the Irish Presidency of the EU Council of Ministers on the “à la carte” internal convergence of direct agricultural aid. Internal convergence aims to bring in a single fixed-rate payment for farmers in each of the member states. It appears that, with such a flexible internal convergence system, there is something to the taste of most countries.
The new member states (led by Poland), which are dissatisfied with the text on the table, have for their part called for the current simplified system of the single area payment scheme (SAPS) to be kept in place (up to 2020 in some cases). The new member states also support the Parliament amendment allowing countries which benefit from the SAPS to keep 15% of coupled aid (the Commission has proposed up to 10%).
The creation of an “optional redistribution payment” won reasonably broad support at the Agriculture Council.
Unsurprisingly, the so-called “liberal” countries (the United Kingdom, the Netherlands, Denmark and Sweden) took the view that the provisions proposed by Ireland keep in place too high a level of coupled payments (which retain a link with production, whereas decoupling is an essential principle of the latest CAP reforms). This high volume of coupled payments limits the internal convergence of aid, these countries argue.
Council agreement on reform in March?
European agriculture ministers also discussed the text of the Presidency of the Council of the EU on the base payment to farmers regime, one of the most important planks of the reform of the common agriculture policy (CAP). Even though this is shaping up to be one of the most complicated tasks at hand, the Irish Presidency hopes that the Agriculture Council will reach a political agreement next month (18-19 March) on the reform of the CAP. Negotiations with the European Parliament will then take place, and be concluded by the end of June if all goes well. In early March, the EU experts will have their noses to the grindstone over the reform within the special committee on agriculture (SCA).
The Presidency's text is a “major step” towards an “acceptable solution on the central issue of the allocation of rights”, said Dacian Ciolos, European Commissioner for Agriculture. He stressed that many points “go in the right direction, but a few issues are still well below the minimum ambition required” for Commission to support the text.
Internal convergence. France (“100% agreement”), Germany, Spain and Portugal, amongst others, supported the Irish ideas of “à la carte” internal convergence. Basically, Ireland has proposed to model what is earmarked for external convergence (better distribution of aid between member states) on internal convergence (harmonisation of monies received by farmers in a single year). In other words, internal convergence will not be complete by 2019.
The Presidency's proposal gives the member states the option of delaying by one year one of the main elements of the Commission's proposal, that is, achieving a single fixed-rate payment in a single member state or region by 2019 at the latest. It also provides for a less radical first stage, with just 10% (compared to 40% in the Commission's initial proposal) of the upper limit available for the base payment to be allocated uniformly in the first year.
This modification (Article 29 of the initial proposal) also allows the member states to distribute the greening aid as a percentage of the base aid received by the farmer. In this way, Ireland proposes that 30% of the greening will apply not to the national envelopes of the countries, but to the direct payments to holdings. This measure has been contested by Germany, the Czech Republic and Greece.
“In fact, the reduction of the first stage to 10% in conjunction with the variable greening shows a lack of real commitment”, Ciolos stressed. The message sent out is “neither adequate nor pragmatic”. “Although I can understand the point of providing a variable greening, and particularly in order for the farmers which receive the most to be genuinely motivated to make the efforts which could be necessary for the purposes of greening, we will then have to revise the percentage of the first stage to a more credible level”, the commissioner advised.
On the level of convergence to be achieved in 2019, the Irish Presidency provides for the member states to be authorised to go no further than a partial movement towards a uniform value, on the basis of the principle applied to external convergence. “This proposal is clearly not ambitious enough and will not ensure a minimum objective of convergence by 2019”, Dacian Ciolos argues. He opposes the open and voluntary nature of the provisions added by the Presidency on the minimum convergence threshold. The Commissioner observed that the Presidency also retained just some of the principles of external convergence adopted by the European Council, which brought in a minimum aid per hectare (75% of EU average).
Redistribution payment. The changes proposed by the Presidency aim to bring in an optional redistribution payment, which would allow the member states to grant extra on top of the base payment for the first hectares of each farm and, in so doing, to take account of the higher labour intensity which characterises small farms and the economies of scale achieved by large holdings. Ciolos understands the logic of this proposal, which draws a link between the aid allocated, agricultural employment and the economic decisions of farms to upsize and the economies of scale this brings. “A tool of this kind should not lead to anomalies and therefore requires a strict framework with limits both in terms of maximum amount per hectare and of number of hectares affected or financial resources which can be earmarked for this”, he said.
Transition conditions for SAPS countries. Ciolos is sensitive to certain arguments put forward by the countries which receive the SAPS to be given flexibility when determining the value of rights during the transition period up to 2019. However, the text of the Presidency goes too far in his view: he feels that the Presidency's proposal to allow the SAPS countries to use references going back to 2009 “is inadequate”. He defended the reference period of 2013. Ciolos went on to oppose the request of the “new” countries of the EU to keep the SAPS in place until 2020 in certain cases.
Special rights. The Irish Presidency's text provides for the special rights currently in place to be kept. In its current form, the text could even lead to an increase in coupled support in terms of percentage of total support. However, the Commission takes the view that these special rights are an anomaly given the direction taken by the CAP since 2003.
Exclusion of vineyards. France and Italy welcomed the provisions on the exclusion of vineyards. Ciolos noted the concern expressed regarding the obligation to allocate payment rights to land planted with vines. He pointed out that, to date, vineyards are eligible to receive direct aid decoupled from surface area in the framework of the single payment regime. If this land is to be the object of differentiated treatment, this can only be done by means of a provision which is compatible with the WTO. “Allowing the member states to exclude, in 2015, surface area planted with vines in 2011 from the allocation of payment rights, as the Presidency proposes, seems to respond to the criteria of the 'green box'. But let's be quite clear: flexibility on the part of the Commission is possible only if this does not pave the way for other requests for exclusions”, Ciolos warned.
Protein crops, Austria in favour of new strategy. At the Agriculture Council, the Austrian request for a new EU strategy in favour of protein crops was supported by a number of countries (France, Germany, Spain, Romania and Poland). Only the United Kingdom showed caution, reiterating the importance of respecting WTO rules. Austria is calling for the CAP reform to take account of the problem of the undersupply of high-quality protein feed in Europe. Legumes and intermediate crops have positive effects on the environment and the climate and this should be taken into account in the greening requirements and credited as ecological focus areas, Austria argues. (LC/transl.fl)