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Opportunity to sharpen CAP proposal

For the Common Agriculture Policy (CAP) to deliver on environmental and climate goals, policy makers must specify targets and ring-fence funding for green interventions.

The Commission’s CAP proposal was published in June 2018 and will be processed in the European Parliament over the coming months, with a possible plenary debate and vote in the second half of April. More than 7000 amendments have been tabled. The Council is expected to present a partial position (articles not related to the budget) in June.

According to the European Court of Auditors (ECA), who published an opinion on the proposal in November, there are plenty of opportunities for improvement. They note that the Commission has stated that environmental and climate objectives would be given a high priority and that there are several tools in the policy architecture with potential to address these objectives. However, according to the ECA, in order for the environmental and climate objectives to be effective they must be more clearly defined and translated into quantified targets. Otherwise it will be difficult to assess whether a greener CAP has been achieved.

The ECA also address the issue of climate accounting and find the Commission’s estimates of the CAP’s contribution to EU climate change objectives to be unrealistic. For example, they assume that 40 per cent of the direct payments will be spent on climate measures, since farmers need to comply with conditionality. However, most farmers would in practice need to do very little or nothing more than they already do to be in line with the requirements. ECA also write that this type of optimistic accounting “could lead to lower financial contributions for other policy areas, thus reducing the overall contribution of EU spending to climate change mitigation and adaptation”. And they suggest that only areas where farmers actually apply practices to mitigate climate change, such as protecting wetland and peatland, should be included when estimating the contribution to climate change mitigation.

Another important piece of criticism is that despite all the claims about renewal, many policy options remain the same. Not least direct payments, which are still the biggest item on the budget. This type of area-based funding is justified primarily by the objective to “Support viable farm income and resilience across the EU territory to enhance food security”. The ECA means that there is a lack of comparable statistics on farmers’ income from EU countries, which will make it hard to assess where interventions are most needed. There is also a lack of evidence on what effect direct payments have on farmers’ income. They are also sceptical about the second part of the objective – food security. They say “the objective’s relevance to the European context is questionable. To ensure future food security addressing climate change is likely to be more relevant than supporting farm income”.

The Institute of European Environmental Policy (IEEP), a Brussels-based think tank, focuses on eco-schemes, a new type of policy intervention in the proposal, in a report published in January. Eco-schemes are to some extent superseding the greening practices of the previous CAP, as an environmental feature in the first pillar. In the proposal, eco-schemes are mandatory for member states and voluntary for farmers. The main difference from greening is that the exact design is left to member states. This flexibility means, according to the report, that if well targeted and tailored, and backed by a strong budget, eco-schemes have the potential to contribute to maximising environmental and climate benefits.

“If member states are serious about using the CAP to respond to the pressing environmental and climate challenges facing the agriculture sector, they could logically use the eco-scheme to transform the majority of their direct payments into genuine payments for eco-system services,” the report states.

But this freedom entails a risk that less ambitious member states will set the budget for eco-schemes close to zero, since there is no minimum spending set on this intervention. The IEEP identifies the “lack of ring-fencing of CAP funding for the eco-scheme” as the “single greatest weakness of the proposal”. And they call for EU lawmakers and member states to maintain the 30 per cent minimum level of spending on environmental and climate issues set out in the 2014–2020 CAP budget.

Kajsa Pira

ECA, Opinion No 7/2018: concerning Commission proposals for regulations relating to the Common Agricultural Policy for the post-2020 period: https://www.eca.europa.eu/en/Pages/DocItem.aspx?did=47751
IEEP, CAP 2021-27: Using the eco-scheme to maximise environmental and climate benefits: https://ieep.eu/publications/cap-2021-27-using-the-eco-scheme-to-maximis...

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