New EU farm policy supports business as usual

In the coming years the European Union will continue to fund intensive farming practices with only marginal tightening of environmental requirements.

An agreement between the Council of Ministers and the European Parliament on the Common Agricultural Policy (CAP) 2023–2027 was reached on 25 June. As the largest budget item in the EU, around a third of the entire budget, it should have the potential to contribute to real change in the farming sector. Unfortunately, this CAP reform will not contribute to a much-needed sustainability revolution in European agriculture. What it achieves instead are some minor improvements in basic environmental requirements. Along with a great deal of uncertainty about how the member states will choose to implement the new performance-based CAP, as well as the Commission’s capacity to assess their work.

Let’s start with the slight improvements. There are minimum standards that all farms that receive CAP payments must comply with. The new rules prohibit farmers from cultivating peatlands and wetlands – at least after 2025 – since member states can postpone the introduction if they can show that they do not have the right map data. This move is long overdue, as cultivation on peat soils accounts for a disproportionate share of agricultural greenhouse gas emissions.

Another mini-step forward is that the previous requirement of “crop diversification” has been improved to a minimum level of “crop rotation”, which could potentially have a marginal effect on fertiliser use. However, the Commission’s proposal for mandatory use of a Farm Sustainability Tool for Nutrients was abandoned during the negotiations.

The big news in this CAP compared to the previous is the new delivery model: shifting from compliance-based to performance-based monitoring. Actually reviewing what is achieved out in the fields or in the paddock is quite reasonable. The challenging part is that member states need to define targets for a set of “result” indicators. The big risk is that rather than measuring actual environmental results, they measure how many hectares a particular scheme (e.g. for climate) has been rolled out on. The easier and less demanding the scheme, the easier it is to reach the target.

A weakness of this “performance framework” is that it is not clearly linked to any quantitative EU targets, nor is there an obligation on member states to set meaningful targets at national level. The Commission can only base its assessment of the national CAP Strategic Plans on qualitative aspects, which will be very hard to benchmark against the ambition level needed to deliver on environmental objectives.

During past CAP reforms, coupled support (per animal or acre) has been increasingly phased out. This mechanism is being criticised as it can function as direct support for intensive animal production without making any demands on environmental performance. In 2018, sixty per cent of the coupled support (EUR 2.4 billion) went to beef and milk production. However, instead of continuing on the path taken and abolishing this support altogether, the rules for when member states can use coupled support have been relaxed.

However, there are a few caveats that stop member states from totally neglecting environmental concerns. There is a no-backsliding clause that stops member states from spending less on green measures. There are also ring-fencing mechanisms that require member states to spend 25 per cent of the pillar 1 direct payments on so-called eco-schemes, while 30 per cent of pillar 2 should be used for agri-environment-climate schemes.

There is also, what at a first glance looks as a promising ambition, a target that 40 per cent of the CAP-funds should go towards the climate. That would mean 22 billion euro annually in climate investments, but the interpretation of “climate” is ridiculously broad. The climate budget column includes 100 per cent of the support for environmentally and climate-friendly agriculture, which makes some sense, although not all of these are specific climate measures. More questionable is that 40 per cent of the contributions to areas with natural restrictions (e.g. mountainous areas) and 40 per cent of the direct payments to farmers now called “Basic Income Support for Sustainability” and “Complementary Income Support” are reckoned as climate investments. Just days before the new agreement the European Court of Auditor published a report in which they conclude that the CAP funds attributed to climate action in 2014–2020 “had little impact on agricultural emissions”.

A partial explanation for the CAP’s weak environmental performance is that the original proposal was presented back in 2018. This was before the EU stepped up their environmental and climate work by launching the European Green Deal in December 2019. It was followed by the Farm to Fork strategy in May 2020, which includes targets for climate and nitrogen: agriculture should contribute to the effort-sharing decision by reducing net greenhouse gas emissions by 55 per cent, while nutrient loss should be reduced by 50 per cent and chemical fertilisers by 20 per cent by 2030.

The fact that the agreed CAP is insufficient in relation to the European Green Deal was partly acknowledged by Commissioner Frans Timmerman when, during the press conference, he said the agreement “could have gone a bit further, obviously. I am very ambitious, the Commission is very ambitious, because of our green deal and because we believe that Europe is faced with an existential challenge due to the climate crisis and the biodiversity crisis.”

Kajsa Pira