POLICY PRIMER

New EU farm plan seeks to put national capitals at the helm

Many doubt that the Common Agricultural Policy shake-up will result in tangible improvements for the environment.

Brussels is preparing to take a great leap backward from setting farm policy this year.

Responding to years of farmers’ gripes that the EU’s Common Agricultural Policy is a Kafkaesque nightmare of excessive bureaucratic interference, the European Commission is planning to relinquish much of the day-to-day spadework of administering the €58 billion-per-year policy to member countries.

According to a draft paper on the future policy obtained by POLITICO, the buzzword for the new CAP is “subsidiarity”: Brussels jargon for turning over control to the national capitals.

The European Commission would simply set out a broad vision for the Continent’s agriculture — on areas ranging from market oversight to environmental rules — but let EU governments devise their own country-specific plans to avoid some of the CAP’s historical failings. While the idea is gaining some momentum, there are big questions about whether the new format will work any better.

The biggest criticism of the CAP, which accounts for a whopping 40 percent of the EU budget, has been that it primarily aided big landowners through a system of direct payments based on acreage at the expense of smaller, more ecological farming. Granting more control to individual countries is supposed to give more prominence to subsidies that come with strings attached. Simply put, both small- and large-scale farmers will face challenges under the new greener CAP as they will have to contribute more to environmental and rural development schemes to earn their cash.

There are other areas where the new structure could prove more effective than diktats from Brussels, and some elements of the current CAP are regarded with almost universal derision. The so-called three-crop rule, for example, requires arable farms across the bloc with plots of over 30 hectares to grow three separate crops in order to promote biodiversity and combat soil erosion.

Farmers have long argued the policy makes no sense since it vaporizes the profits of smaller businesses, which switch crops annually anyway. Even many environmentalists admit that a previous strategy — crop rotation — is more effective. Brussels also provokes anger and distrust by sanctioning farmers who flout the rules.

So the big new idea in the forthcoming reform is to eliminate these highly centralized features of the CAP that just fan farmers’ hatred.

“The current CAP delivery system relies on detailed requirements at EU level, and features tight controls, penalties and audit arrangements. These rules are often very prescriptive, down to farm level,” the Commission said in the paper, adding that diverse climates across Europe make today’s highly centralized system inefficient. “Both farmers and citizens should be enabled to benefit … with a less prescriptive framework,” it said.

Shifting pillars

There are immediate concerns about whether the CAP’s structure is ready for this kind of transformation.

The current CAP is divided between direct subsidies from Brussels to farmers — so-called Pillar 1 payments — and rural development funds, or Pillar 2.

The Commission is seeking to put more emphasis on the rural development cash, rather than old-style, automatic Pillar 1 handouts based on acreage. Brussels says a “new delivery model” will allow countries greater leeway to pull money out of Pillar 1 into Pillar 2.

Theoretically, this increased focus on Pillar 2 should force farmers to act greener to earn their subsidies. The main problem is that Pillar 2 activities are hard to police, and it’s not clear how that would change in the new model. The European Court of Auditors in November found that the EU’s rural development system is plagued by implementation delays and that vague planning means the schemes often fail to deliver quantifiable results.

Pekka Pesonen, secretary-general of the Brussels farm lobby Copa & Cogeca, told POLITICO that although farmers “in principle” back plans to award more powers to national governments, their experience of rural development policy showed the need for some caution. “The communication only gives direction and the devil is in the details,” Pesonen said.

Alan Matthews, professor emeritus of European agricultural policy at Trinity College Dublin, commented in a recent blog post that the Commission’s plans aren’t likely to reduce bureaucracy for farmers. He added, however, that the idea of repatriating some powers was nonetheless positive and would probably deliver better results.

Green groups like the European Environmental Bureau believe that giving more power to member countries in the area of “greening” — CAP policies designed to help the environment — would do very little to improve the role farmers play in soil quality and biodiversity.

“It is important that the future policy is focused on actual results and delivery,” said Faustine Bas-Defossez, a policy expert for agriculture at the EEB. She added that allowing flexibility for countries to adapt to differing needs was used in the past as a “smokescreen to systematically water down environmental ambition.”

“Member states cannot have more freedom and flexibility without there being a strong and robust accountability mechanism to ensure the policy delivers results. We can’t have one without the other,” she said.

The key question, then, will be whether countries actually implement radically greener policies and make big shifts away from Pillar 1. In the current CAP, more than 70 percent of payments go to Pillar 1. A mere 1.5 percent is targeted at investments in sustainable organic farming systems, according to the Research Institute of Organic Agriculture.

Focus on ecology

Adding to the conundrum is an entrenched belief that some of the existing environmental rules, such as setting aside 5 percent of arable land to create so-called ecological focus areas, are widely flouted. While farmers receive money to set aside land aimed at improving biodiversity, many of them plant protein crops in these areas instead of hedges, bushes and trees.

In the Commission’s communication, it is clear that countries would have to police this more closely. They “would be accountable for providing credible performance reporting, underpinning the assurance of the budget.”

A report released in November by BirdLife Europe, the EEB and the Green and Socialist groups in the European Parliament concluded that the current CAP did not do enough to halt environmental degradation, reduce biodiversity loss or address climate change.

“We need a proper assessment of the impact of subsidies on the ground. Without such an evidence-based approach it will be impossible for the Commission to justify continuing to pour such huge amounts of EU taxpayers’ money into the CAP,” Bas-Defossez said.

This article is part of the spring policy primer.