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Is the EU’s New Common Agricultural Policy Greener?

In October 2011, under the leadership of the EU Commissioner for Agriculture and Rural Development (Dacian Ciolos), the European Commission proposed four legislative texts to reform the instruments regulating the European agricultural markets, the payments farmers are entitled to receive, the measures promoting rural development and the new principles (e.g. transparency) which should be driving this public policy. At the time, these proposals were welcomed by most civil society actors and also, to some extent, by the Greens who recognised the Commissioner’s attempt to change the paradigm underpinning this malfunctioning policy. For the first time, it was acknowledged that a diversity of actors and farm structures should be supported, a high priority should be put on the sustainable use of natural resources for agriculture and that new instruments should be implemented to “re-organise our food chain”.

It was also the first time that the European Parliament (EP) took part – on equal footing with the Council – in the (re)design of the CAP. In concrete terms, this meant that it could change the legal texts framing the way we produce, consume and exchange food. The EP is composed of representatives of different political groups, with different political priorities, but who, collectively, have the mandate to represent the interests of the EU citizens who elected them in the first place. In the case of the CAP, the public consultation launched by the European Commission in 2010 revealed that EU citizens want to keep a strong agricultural sector in Europe, but in a way that is sustainable for the environment and fair for the people. In other words: “green”. With 55 MEPs, this is precisely what the Greens have been fighting for in the negotiations on the future of the CAP which took place between November 2011 and November 2013.

Did they succeed in making the CAP greener? Yes and no.

If we mean “greener compared to the current situation”, maybe they did. But if we mean “greener compared to what the Commission proposed two years ago”, the answer is: maybe not. For the purpose of this article we will look at both interpretations and will focus on the new environmental measures (“Greening component”) and the new schemes favouring young and small farmers, as a symbol of the new farming paradigm the Greens believe in.

The Greening component: a glass half empty or half full

Originally, the Commission proposed to tie 30% of all direct payments to three specific measures:

  • Maintaining Permanent pastures
  • Ensuring Crop rotation – a farmer must cultivate at least 3 crops on his arable land none accounting for more than 70% of the land, and the third at least 5% of the arable area
  • Maintaining an “ecological focus area” of at least 7% of farmland (excluding permanent grassland) – i.e. field margins, hedges, trees, fallow land, landscape features, biotopes, buffer strips, afforested area.

Although they would have wished to go further – for example by imposing a stricter and more ambitious crop rotation scheme or by tying 100% of payments to the greening requirements – the Greens were mostly satisfied with the Commission’s proposal. Unfortunately, this soon changed. As the negotiations were progressing, the greening component became the centre of most attention, drawing criticism and resistance from all sides, but mostly from the farming lobby who saw in the greening an additional threat to the “competitiveness” of Europe’s agriculture. As a result, and under the pressure of the dominant political forces inside but also outside the EU institutions, the greening component became weaker and weaker, more and more flexible, and less and less mandatory due to the increasing number of exemptions the Member States could benefit from.

In fact, it is fair to say that, if it weren’t for the Greens –and an alliance of environmental actors outside the European Parliament – the greening component might have disappeared completely. But it survived, albeit in a watered-down version, and stayed mandatory. Concretely this means that if farmers don’t comply with these new environmental measures, they can see their payments cut by up to 30%. This was one of the biggest successes for the Greens in reforming the CAP.

Greening payment as adopted in the final agreement

  •  Mandatory Greening in the 1st pillar
  • Crop diversification (instead of crop rotation) – farmers are obliged to cultivate 30% of their land with other crops than the main crop
  • Ecological Focus Area at 5% (instead of 7%) – but pesticides and fertilisers can still be used in EFAs
  • Permanent pasture not entirely focused on grass but on “what is grazed” and optional ban on conversion of carbon- and nature- rich pasture.

However important this victory is, it needs to be balanced with an equally symbolic (and dramatic) loss.

The CAP is notorious for its dual structure in two pillars – where the second pillar (rural development, agri-environmental measures, etc) compensates for the negative effects of the first pillar (direct payments). The latter represents the vast majority of the total CAP budget and is what makes the CAP such a hot potato in budgetary negotiations; in 2013 it channelled €44 billion, from the EU back to the Member States. The second pillar however – with its rural development measures, local programmes and agri-environmental schemes – only represented €14.8 billion in the total EU budget and is co-financed by the Member States. Needless to say that the first pillar is usually much more protected than the 2nd pillar, which is usually the first one to take the hit in case of budgetary cuts.

The Greens’ priority has always been to try and strengthen the 2nd pillar because it has proven to be beneficial not only in environmental terms but also in terms of creating synergies between local actors (through the LEADER programme for example) and keeping our rural areas alive. This CAP reform did exactly the opposite:  under severe budgetary constraints, it weakened the second pillar and strengthened the first. Effectively, the rules of the new policy will allow Member States to transfer up to 25% of their second pillar budget towards their first pillar, which may significantly reduce the funds available for agri-environmental measures and other rural-development schemes. Unfortunately the Greens didn’t manage to stop that.

It’s better to be a young farmer than a small one

Originally the Commission proposed two schemes to encourage the entry of new actors into the sector, i.e. young farmers, and support the survival of the fast-disappearing small farms across Europe. It also proposed to put a limit to the astronomical sums paid to the largest farms by capping the overall payments at €300,000/year. Together these three instruments gave a clear signal that the future of agriculture didn’t lie in the maintenance of the current trend (which gives a comparative advantage to the biggest, largest actors) but rather in the support of a diversity of farming actors.

In concrete terms, the European Commission proposed that:

  • Member States should allocate 5% of their national envelope to support young farmers
  • Member States should/may foresee a lump sum of up to €1,000 to support small farms
  • Direct payments should be capped at €300,000/year

Despite the intense negotiations and the vast campaigns launched by the Greens – supported by a large number of civil society actors – only one out of these three schemes is likely to have a real impact in the future: the young farmers’ scheme.

In short: compared to the current situation, a young farmer would be better off than a small farmer, as Member States will be obliged to allocate 5% of their national envelope to encourage the entry of new actors to the field. However, there will be no legal obligation for them to support small farmers. As for the big farms, they will continue to be just as well-off as they currently are, given that the mandatory capping proposal didn’t make it into the final agreement. This comes as quite a surprise when one knows that the capping measure would have only affected 0.1% farms in the whole of the EU while the small farmers’ scheme could have helped millions of them still active in Europe.

Conclusions

Did the Greens make the CAP greener compared to the current situation?

It is very difficult to tell at this stage whether the new CAP will be more beneficial to the environment than the current one. The transfers of funds from Pillar 2 to Pillar 1 may indeed offset some potential benefits yielded by the greening component in Pillar 1.

Did the Greens make the CAP greener compared to the European Commission’s proposals?

There is no doubt that the initial proposals have suffered from an overall “watering down” along the negotiations process: more and more exemptions and flexibility were introduced, giving more room for manoeuver to Member States to interpret and implement the policy (to avoid some of parts of the greening component for example). This was the overall trend driven by the political majority inside and outside the EU institutions and although the Greens didn’t manage to prevent it, they did, certainly, limit the damage. In a lot of cases, they acted as the protectors of the Commission’s initial proposals, which were closer to their policy ideals than the final outcome is.

Whatever interpretation is given to the CAP reform that has recently been concluded, there is one undeniable achievement that the Greens have clearly contributed to: 30% of direct payments will now have to be tied to new environmental requirements. They may be imperfect but at least they exist and they are mandatory. This was not the case before. Bringing such a new component is particularly remarkable for a public policy like the CAP, which is characterised by “path-dependency”, i.e. an attachment to its current state and a high-resistance to change. In a path-dependent policy, amending existing instruments is likely to be easier than creating new ones. In this sense, the creation of the greening payment can be seen as a real victory, especially in the light of future improvements the Greens may bring to it in future negotiations.

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