The level of ambition of the eco-schemes (green programmes), the modalities of capping direct aids, the new control rules or the new cross-compliance provisions are the main ‘hot topics’ of the negotiations between the three EU institutions on the post-2020 Common Agricultural Policy (CAP) (see EUROPE 12588/10, 12586/7). In addition, EU Council and European Parliament negotiators have yet to agree on the details of the transitional measures, with the new CAP due to enter into force from 1 January 2023.
The European Parliament and the EU Council have just adopted their positions, sometimes far apart, on the post-2020 CAP. They must now prepare for the negotiations, which should last at least until spring 2021, on the outlines of this new policy, which has been severely criticised in certain ranks of the European Parliament and by NGOs.
On Monday 26 October, a Commission spokesperson said that the institution supported “the idea that the CAP should in the future have very strong climate and environmental ambitions”. The Commission intends “to work with the EU Council and the European Parliament to ensure that the priorities of the European Green Deal are taken into account in the new CAP”.
Vice-President Timmermans stressed this weekend that it was very important “that we find a balance between our work on the Green Deal and this CAP agreement”, the spokesperson said.
Strategic plans. For the European Parliament (https://bit.ly/3jx4evG ), a 30% share of the direct payments budget will have to be devoted to the eco-schemes.
The EU Council (https://bit.ly/3mq0BK4 ) expects a level of 20%, provides for a two-year ‘trial phase’ (2023 and 2024) and, above all, introduces flexibility, especially at the request of Austria: up to 50% of the funds for the eco-schemes may be transferred to environmental measures under the second pillar (rural development) by Member States which have already spent 30% of their second pillar envelope on environmental or climate measures.
Capping. Also in the regulation on strategic plans, on the MEPs' side, the capping for direct aid should be set at €100,000 per farm (excluding eco-schemes, young farmers and 50% of wage costs). The European Parliament thus supports the Commission's proposal (except for the addition of 50% of wage costs, which is 100% in the proposal). However, if 12% of the first pillar is earmarked for redistributive aid, a Member State could opt out of this capping in the European Parliament proposal.
The EU leaders' agreement (21 July) on the Multiannual Financial Framework (MFF) 2021-2027 provides for a voluntary capping. The EU Council's position is that Member States will be able to cap basic income support from €100,000, with a voluntary mechanism to reduce direct payments above €60,000.
The European Parliament has introduced new provisions to learn, in a certain way, the lessons from the EU subsidy fraud targeting the Czech Prime Minister, Andrej Babiš (see EUROPE 12508/9). An amendment proposed by Monika Hohlmeier (EPP, Germany) and supported by others provides for the Commission to monitor in real time and suspend payments when the total sum exceeds €500,000 in the first pillar for direct payments or €1 million for investments under the second pillar (an exception may be granted, subject to conditions).
‘New Delivery Model’. To simplify, the European Parliament opts for a ‘hybrid’ regime between the current compliance regime and the new performance regime (‘New Delivery Model’) proposed by the European Commission.
Ulrike Müller (Renew Europe, Germany), rapporteur on the horizontal regulation, asked to follow the Commission's proposal.
The EPP/S&D/ECR compromise finally retained incorporates some aspects of the ‘New Delivery Model’ (performance-based controls, single audit system) and retains some current rules (all expenditure and eligibility criteria for obtaining aid and compliance of payments would still be controlled by the Commission).
The EU Council, for its part, has adopted the Commission's approach to the New Delivery Model, with a number of flexibilities: simplification of controls for small farms, in particular in the context of cross-compliance, and maintenance of a threshold of €2,000 of aid below which the financial discipline mechanism (reduction of direct payments to top up the crisis reserve, for example) is not applied.
Conditionality. As regards cross-compliance, an element of the green architecture with the eco-schemes, the European Parliament provided for 10% of arable land to be devoted to non-productive topographical elements that will benefit biodiversity, but with a minimum share of 5% of areas and non-productive elements on arable land “without pesticides or fertilisers”. The EU Council's position is quite similar, but provides for certain derogations (from 5 to 3% in some cases, and exemption for farms of less than 10 hectares).
The European Parliament opted to maintain permanent grassland at national, regional, sub-regional and farm level with a maximum rate of change of 5% (without additional aid) compared to the reference year 2018. The EU Council has made more or less the same provisions.
In addition, the European Parliament provides for implementing crop rotation without consideration of farm size, permanent crops and crops grown underwater.
Contrary to the EU Council's position, the European Parliament (https://bit.ly/3jx4evG ) strengthened the provisions of the text on the common organisation of the market (CMO): better organisation of the sectors, market transparency and, in times of crisis, the ability to rapidly implement incentive plans to reduce production. It will be interesting to see what will be left after the negotiations with the EU Council. (Original version in French by Lionel Changeur)