Bridges Weekly Trade News DigestVolume 16Number 23 • 13th June 2012

EU Farm Support: Rapporteur Calls for Simpler ‘Greening’ Measures


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The EU should maintain but simplify new ‘greening’ requirements for farmers receiving direct payments under the bloc’s post-2013 farm policy, according to a draft report that will be discussed next week by the European Parliament.

The report, by Portuguese Member of the European Parliament (MEP) Luis Manuel Capoulas Santos, proposes easing requirements for farmers to maintain permanent grassland, diversify their crops, and protect ‘ecological focus areas’ in order to receive a new ‘green’ payment under the EU’s reformed Common Agricultural Policy (CAP).

However, the move may not be enough to satisfy farm ministers in the European Council, who have argued that plans to impose uniform conditions on all the bloc’s farmers should be scrapped in favour of a ‘menu approach’, under which each government could choose which environmental measures should apply (See Bridges Weekly, 16 May 2012).

At the same time, it dilutes a number of requirements which the European Commission had argued are important for ensuring meaningful environmental outcomes.

New ‘co-decision’ procedures introduced under the Lisbon Treaty will require both the European Parliament and the European Council to agree on the proposals tabled by the European Commission last October (see Bridges Weekly, 12 October 2011).

The Capoulas Santos report will be discussed next Monday and Tuesday at the parliament’s committee on agriculture and rural development, alongside drafts on the single common market organisation; financing, monitoring, and management; and rural development.

Environmental sustainability: a ‘sine qua non

“The transition to more environment-friendly agriculture in Europe is a sine qua non for the sector’s viability,” the rapporteur observes in an explanatory note at the end of the seventy-page document.

Although his note makes no explicit mention of the impact of EU farm support on developing countries, it does mention the importance of remaining competitive in the global economy.

“European agriculture also has to remain competitive with Europe’s main trading partners, which are highly subsidised and/or subject to less stringent production rules,” Capoulas Santos claims.

In an implicit acknowledgement of environmental groups and others who have argued that taxpayers’ money needs to deliver clear and measurable outcomes for public goods, the rapporteur states that “resources must be assigned to ends recognised to be valuable by taxpayers and society, shared out as fairly as possible among farmers, regions, and member states.”

Greening no longer ‘mandatory’?

The proposal by Capoulas Santos deletes language from the Commission’s original proposal that described the new green payment as mandatory.

Under the new proposals, EU member states would use part of the money they receive from the Commission every year for direct payments to reward farmers for complying with the compulsory practices that the Commission had originally identified - crop diversification, maintaining permanent grassland, and ecological focus areas.

The rapporteur also proposes a fourth category of environmental measures - maintaining “perennial crops associated with appropriate agronomic practices” - in order to ensure that farmers with permanent crops such as olive groves, vineyards, or orchards also receive the ‘green’ payment.

Ecological focus areas

The Capoulas Santos draft would require only those farms that are larger than 20 hectares to maintain seven percent of their eligible land, which excludes permanent grassland, as ‘ecological focus areas’ - such as fallow land, terraces, buffer strips, and forests - rather than all farms, as the Commission had originally proposed.

In order to encourage the creation of ‘biodiversity corridors’, this share would fall to five percent if farmers collaborated with their neighbours to establish ecological focus areas that were adjacent to one another.

The list of areas that would qualify under the new rules is also expanded to explicitly include “hedges or stone walls,” as well as “land planted with nitrogen-fixing crops.”

Crop diversification, permanent grassland

Under the rapporteur’s proposals, farms between five and twenty hectares would need to have at least two different crops, neither of which should cover more than ninety percent of the arable land. The Commission had originally proposed that all farms larger than three hectares would need to have at least three different crops - a requirement which the rapporteur suggests should still apply to all farms larger than twenty hectares.

As under the original proposal from the Commission, farms smaller than fifty hectares will not have to abide by the crop diversification plans if they are covered by permanent grassland, historical pastures, or permanent crops.

Capoulas Santos also proposes extending the green payments to farmers maintaining historical pastures, which he argues “are equivalent to the extent that they are likewise permanent and associated with extensive farming.”

Airports, mining companies are not “active farmers”

The rapporteur proposes that EU member states should be allowed to define who should be eligible to receive direct payments as an “active farmer.”

However, they should exclude from their definition “transport companies, airports, real estate companies, companies managing sport grounds, campsite operators, and mining companies,” according to the proposal.

The Commission had earlier proposed an illustrative list of beneficiaries to whom governments should “refrain from” providing direct payments.

“Green by definition”

The proposal increases “the flexibility of the greening measures by widening the range of eligible options and making the system simpler to implement,” the rapporteur argues.

Some farmers will therefore automatically qualify for the ‘green’ payment - an idea first mooted by the European Commission, which had suggested that organic farmers should qualify as green ‘by definition’.

Capoulas Santos suggests expanding this to allow for farmers enrolled in ‘agri-environment’ schemes and other similar programmes to qualify automatically for the new payments.

Alan Matthews, professor emeritus of European agricultural policy at Trinity College Dublin, observes in an online commentary that “it seems impossible to avoid” many farmers receiving a double payment, under both EU agri-environment programmes and the new ‘green’ component of the direct payment.

Payments to large farms

Building on the Commission’s proposals to cap payments to large farms at a maximum of €300,000, the rapporteur argues that subsidy payments that are less than this amount but more than €250,000 should be cut by eighty percent - rather than the seventy percent originally proposed by the Commission.

Cuts to the subsidies for farms receiving €150,000 and €200,000, and those receiving between €200,000 and €250,000, would remain unchanged.

Divergence across member states

Capoulas Santos also argues that there is a need to speed up convergence among member states, in order to reduce the extent that any given country receives substantially more or less than the European average.

“No member state, under any circumstances, will be 65 percent below the EU average,” he proposes in the report.

“That particular decision will be taken by Foreign Ministers and probably ultimately Heads of State in negotiations over the Multi-annual Financial Framework,” Matthews told Bridges, in a reference to the EU’s separate talks on the budget for 2014-2020. The rapporteur’s proposals could nonetheless be expected to be taken into account, he said.

Amendments due

Following next week’s debate over the draft report, parliamentarians will have until 9 July to table amendments. In principle, these should then be taken into consideration, along with ‘opinions‘ from the parliament’s environment and development committees - although “they might be completely ignored,” one Brussels insider grimly observed.

When the European Parliament returns from its summer break in September, it will then have to reconcile the various proposed amendments, as well as the views expressed by the European Council, ahead of a vote in November.

ICTSD reporting.

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