A contractual framework for direct payments comprising several levels depending on the objectives and commitments undertaken and also on needs: that is the system proposed for the common agricultural policy (CAP) after 2020 in a study carried out for the European Parliament.
Ahead of a European Parliament agriculture committee workshop on 8 November at which the post-2020 agricultural challenges in the EU will be considered and discussed and preparatory work done for the next reform of the CAP, the Parliament’s policy department has prepared a document that extends to over 300 pages and includes three studies, each by different researchers and academics, on the future of direct payments; the future of market measures and risk management schemes; and the future of rural development.
On the first of these issues, Professor Alan Matthews of Trinity College Dublin recommends a single pillar CAP, with a contractual framework rather than the current direct payments system.
“The current system of direct payments is neither sustainable in the long run nor designed to address the challenges facing farmers and land managers in Europe today and in the future”, Matthews states. He recommends that “payments should be targeted on specific objectives with a clear results orientation” and “restructured around a one-pillar, programmed, multi-annual CAP”. He argues that national co-financing should be required “for all CAP expenditure” and decoupled direct payments “gradually phased out over a pre- announced transitional period”.
Savings should be “redirected to increasing spending on risk management, competitiveness, climate action and environmental public goods”. Matthews proposes that payment entitlements be replaced by “a contractual framework between farmers and public authorities” and that cross-compliance and the greening payment should be replaced with “‘conditional greening’ whereby the receipt of public support would be conditional on enrolling in a basic (shallow) environmental scheme determined by the member states”. Lastly, the allocation of budget resources should be incentive-based so that CAP funding is allocated to member states “based on performance as well as needs”.
Five levels of payment. Matthews proposes a direct payments structure of five tiers, each with its own objective: (1) income stabilisation (transitional income support, risk management schemes and crisis aid); (2) shallow environmental payments (tailored to different farming systems); (3) targeted income support (to maintain farming in marginal farming areas, coupled payments); (4) higher-level environmental payments (targeted at achieving more specific environmental outcomes, such as high natural value (HNV, organic farming, rare breeds, etc.); (5) horizontal competitiveness (rural development and other payments: investment support, knowledge exchange, innovation, marketing, support for young farmers, producer groups, forestry, diversification, infrastructure, LEADER, Horizon 2020.
Under Matthews’ recommendations, this new direct aid system should be complemented by market measures (safety net) and food chain organisation. He provides an estimate of the cost of the system he recommends. By 2025, a budget of €62.7 billion would be needed, with €20.9 billion of this in national co-financing.
Matthews' study can be found at: http://www.europarl.europa.eu/RegData/etudes/STUD/2016/585898/IPOL_STU (2016)585898_EN.pdf (Original version in French by Lionel Changeur)