On Tuesday 29 May, the European Commission will adopt its legislative proposals on the Common Agriculture Policy (CAP) post-2020, following its presentation, on Wednesday 2 May, of its proposed multiannual financial framework post-2020, which will make provision to reduce the CAP envelope by 6% (see EUROPE 12006).
Three texts are currently being put together: - the 2021-2027 support programme set in place by the member states; - the cross-cutting regulation, and; - changes to the provisions of the regulation on the common market organisations (PMO).
Direct payments. The new structure recommended for direct payments will be a multi-layer mechanism offering the member states flexibility: a base payment respecting conditionality, a payment to young farmers, another for the first hectares and, finally, a voluntary payment for environmental commitments.
The Commission wants fairer direct support, targeting small and medium-sized farmers and those making efforts in favour of the environment as a priority. The idea would be to limit aid to €60,000 per year and per holding, but with the possibility to take account of employment.
Another measure is that the "redistributive" payment would become compulsory.
Greening revised. The three greening measures introduced in 2013 will add to the list of 'best agri-environmental conditions', a mechanism set out in the framework of the conditionality of aid.
For instance, maintaining the ratio of permanent pastures, a minimum amount of non-productive surface area (surface area of ecological interest), crop rotation, the sustainable use of new treatments and a ban on recovering wetlands will be added to the obligations with which farmers must comply.
The total of direct payments granted for voluntary coupled support will not exceed 10% of the member state's envelope, plus a maximum of 3% in the case of protein crops. At least 30% of the rural development fund must be earmarked for environmental and climate objectives.
Additionally, member states complying with their ecological contract will be rewarded with a 'performance bonus' in 2016.
The effect of Brexit. On Wednesday 25 April, the think tank Farm Europe analysed the financial consequences of Brexit on the CAP budget and on farming income.
The real net cost of Brexit will be €2.7 billion a year (in today's values), or 5% of the CAP budget, or 6.5% if all of this decrease falls within the first pillar of direct aid.
Assuming that the CAP budget remains the same in real terms, the immediate impact would be a reduction of 3.6% of average European farm income (with considerable variations between member states): - six member states would suffer reductions of more than 4.5% (among them Slovakia and Denmark); - 14 countries would see reductions of between 2% and 3.5%.
The sectors that will be the hardest hit by Brexit will be field crops, meat and dairy. Farm Europe also states that a drop in the CAP budget representing 50% of the net deficit (due to the UK's withdrawal from the CAP budget), or €1.35 billion, will be a real challenge, with an immediate impact on the average farm income in the order of 1.8%.
In this context, Farm Europe considers that the number one priority must be to secure the CAP budget and increase the efficiency of every euro invested in European agriculture. (Original version in French by Lionel Changeur)