Brussels, 22/03/2013 (Agence Europe) - Now that the Council and European Parliament (EP) have adopted their positions on reform of common agricultural policy (CAP), it is time for negotiations. Starting on 11 April, talks promise to be tough, especially on capping and on internal convergence (as well as the percentage of aid that can be coupled), greening (sanctions), support for young farmers, and the common market organisation (sugar, reference price, strengthening of farmers' position in the supply chain, etc.).
The least that can be said is that the Council and Parliament are not on the same wavelength when it comes to CAP reform. The following are the main challenges to be overcome in negotiations.
Direct payments. First subject: capping of aid. The EP and Commission advocate a compulsory scheme: capping of farm subsidies at €300,000 per farm with a scaling down with effect from €150,000. The European Council, however, has decided in the compromise on the multiannual financial framework 2014-2020 that capping should be voluntary. The EP does not accept the European Council's fixing of measures that fall within the legislative remit.
On the subject of internal convergence (redistribution of aid between farmers within one and the same country), the Parliament and Council should, in time, agree on greater flexibility on this matter. The Commission would like to have more ambitious convergence.
On greening (crop diversification, maintenance of pastureland and areas of ecological interest), the EP may accept the flexibility requested by Council. Differences mainly concern sanctions in the event of failure to comply with the greening provisions. The Council has adopted sanctions that are more severe than those endorsed by MEPs. According to the Council mandate, a farmer would lose 100% of his greening payment, plus 25% of the “environmentalisation” payment deducted from his basic direct payment, i.e. 125% in total. MEPs consider that sanctions should not go beyond doing away with the greening payment.
The EP supports the Commission's proposal to have a compulsory scheme for young farmers, while the Council considers such a scheme should be optional.
On coupled aid, the EP calls for 15% and does not want a restrictive list that would give member states freedom of choice on the sectors concerned. The Council is pushing for 12% and provides a list of products eligible for coupled aid (cereals, meat, olive oil, etc.).
Rural development. Double financing will be the trickiest subject under discussion. Despite opposition from the United Kingdom, Sweden and Finland, the Council has agreed to the principle of financing agri-environmental measures not only under direct aid (first pillar) but also under rural development (second pillar). The EP rapporteur on rural development, Luis Manuel Capoulas Santos (S&D, Portugal), considers such double financing unacceptable. The Commission backs the EP on this. The NGOs consider the decision will allow farmers to receive twice as much in payment for the same agri-environmental activity.
Common market organisation. The EP has adopted a more ambitious position than the Commission on this regulation, while the Council is very close to the initial proposal. The EP is concerned that the Council wishes to dodge a number of co-decision areas, including with regard to fixing the reference prices of products or programmes for the distribution of fruit, vegetables and milk in schools. The Council has approved extension of the sugar quota system until end 2017, while the EP hopes to keep the scheme in place until end 2020. The EP provides for additional provisions not taken on board by Council, including integration into the regulation of measures that the Commission may take in the event of market tension (putting sugar back on the Community market).
The EP proposes to review reference prices for beef and veal and olive oil, which is not prescribed in the Council mandate.
On competition, the EP goes further than the Council so that the exceptions enjoyed by the agricultural sector are effectively applied.
MEPs seem to agree on the subject of wine when discussing the new system for authorisation of vine plantation. They remain in discord, however, on the date when such a system should apply. The Council is calling for 2024, while the EP is in favour of 2030.
When it comes to the strengthening of the role of producer organisations (POs), the EP is in favour of compulsory recognition of POs in all sectors. The Council would like this only for sectors already covered by this obligation such as fruit and vegetables, olive oil, and milk. Unlike the Council, the EP hopes to extend to all sectors the systems of contracts provided for in the dairy sector (between producers and dairies). Also, the EP provides for a system to encourage milk producers to reduce their milk production by 3% in the event of crisis, which the Council has rejected for now.
Finally, the Council is opposed to the general marketing standards proposed by the Commission, in contrast to the Parliament.
The Commission calls for greater internal convergence.
The level of ambition proposed by the Agriculture Council on internal convergence is extremely low and therefore not acceptable, said Dacian Ciolos, Agriculture Commissioner. He considers that the level of ambition is below that of the European Council for external convergence between member states. To ensure that internal convergence is not just a theoretical concept, but a tangible reality by 2019, an absolute minimum objective must be set for internal convergence in the way that it was set for external convergence, he argues. Furthermore, the addition of flexibility (first threshold just 10%) and greening in proportion to aid gives results that require no comment, the commissioner said, deploring that, if he takes the case of a very agricultural country with considerable dominance of pastureland, this would mean that under 1% of the direct payment envelope would be redistributed in 2015.
The Council, like the European Council, opts for voluntary capping of aid. The Commission, however, reproaches the Council for wanting to change its position on the degressive nature of aid payments (reduction of aid for large farms). The commissioner felt that this must exist and be compulsory throughout the EU.
On the subject of young farmers, the European Parliament has strengthened the Commission's proposals. The latter, like the EP, defends a Community approach, i.e. an approach that is not optional.
On greening, the Commission is opposed to double financing, as is the EP. Ciolos considers the equivalency provision proposed by the Council to be complex, and considers that it will result in major sanctions and major dangers of a refusal of clearing. In a word, he said, he considers that there is still very much to do on this. Regarding areas of ecological interest, the Council's position is also along the right lines, the commissioner said, adding they are still, however, far from agreement. The 7% were not questioned by the European Council and, Ciolos said, he cannot conceive conceding to this level of ambition.
On the subject of sanctions in the event of non-respect of greening rules, Ciolos welcomes the fact that the Council has taken the decision to set in place a sanctions regime that goes beyond suspension of the 30% of greening payments. A “credible” rate must now be determined. The Commission is on the whole pleased with the Council mandate on sugar (upcoming end to quotas, end 2017) and planting rights in the vine sector, except on the subject of applying the new system at such a distant time in the future. The Council trusts that this new tool will take effect on 1 January 2019 and that it will follow on from planting rights until 31 December 2024. (LC/transl.jl)