Money quarrels delay a CAP with diluted climate ambition

EU member states have deeply divided opinions on the CAP budget, but agree on weakening the environmental and climate baseline.

In order for the EU’s Common Agricultural Policy (CAP) for 2021¬–2027 to be launched within a year, it had to be more or less fully negotiated by the end of this year. This is not going to happen. Instead, temporary legislation will need to be introduced for 2021 at least.

The biggest obstacle that must be overcome is agreeing on the long-term EU budget, the so-called multiannual financial framework (MFF), for the new period. This not only sets the size of the CAP budget, but also the monetary division between the two pillars, which in turn affects how much money there is for environmental and climate measures.

Right now, there are several areas of conflict. A group of member states known as the “frugal five” – Austria, Denmark, Germany, the Netherlands and Sweden – are pushing for a smaller overall budget. They are major contributors to the EU budget and do not want to increase their fees, which would otherwise be necessary to compensate for the UK leaving. Another group, of eastern and southern member states, is fighting to maintain funding for regional development. Some of them also back the Commission’s proposal to increase the EU budget from 1 to 1.11 per cent of GNI.

At present, agriculture receives around 35 per cent of total spending from the EU budget, and the Commission had proposed to reduce this share to about 28 per cent in the next seven-year framework. According to the proposal, the savings will primarily affect Pillar 2, which includes the rural development programmes and agri-envrionmental schemes.

A majority of member states – Austria, Bulgaria, Cyprus, Czech Republic, Croatia, Estonia, France, Greece, Hungary, Ireland, Latvia, Lithuania, Luxembourg, Poland, Portugal, Romania, Slovakia, Spain and Malta – want to maintain the share of the CAP budget as it is. It is not clear whether they want more money to fall under Pillar 1 or 2, and opinions are probably divided.

At the latest agriculture council meeting in October, the Finnish presidency proposed raising the Commission’s proposal from 28.6 to 30.9 per cent of the total budget.
Jabier Ruiz, senior policy officer for agriculture at WWF’s European Policy Office, said it was “completely deceitful that agriculture ministers are asking for more EU money to green the CAP and, at the same time, drastically diminishing the environmental standards attached to CAP subsidies”.

One of the changes he refers to is the Council’s wish to weaken some of the improvements to the conditionality that have been introduced by the Commission. Conditionality is the basic requirement that farmers must comply with in order to receive direct payments.

Regarding protection of carbon-rich soils, the original proposal requires “appropriate” protection, while the Council wants to dilute this to “minimum” protection. They also want to delay the introduction of this rule to 2024. Since organic soils cover only 1.5 per cent of EU cropland but account for 55 per cent of total cropland soil emissions, this would be a relatively cheap and effective measure to encourage farmers to reduce their carbon emissions.

The Council wishes to get rid of the rule that requires all EU farms to carry out crop rotation. Crop rotation brings many benefits. Famers can reduce their pesticide use. When legumes are included in the rotation, they can also reduce the use of nitrogen fertiliser and this can lower greenhouse gas and nitrogen emissions.

In the European parliament both the AGRI committee and the ENVI committee voted on positions before the elections in May. The AGRI committee managed to erode much of the environmental ambition in the original proposal, for example they wanted to shift some of the conditionality to the non-compulsory “eco-schemes”. The ENVI committee on the other hand came up with several improvements, such as tightening some of the proposed conditionality and introducing a new rule on maximum stocking density.

Since the new Parliament has been assembled, the AGRI committee has decided to keep its report and to negotiate new compromise amendments to somewhat reconcile its position with the ENVI committee’s opinion. We can expect a plenary vote to be scheduled as soon as this process is concluded, likely in early 2020.

Kajsa Pira

Sources:
ENDS Daily 16 October 2019
ENDS Daily 6 November 2019
Politico 4 November 2019, https://www.politico.eu/article/the-eus-budget-tribes-explained/