The European Commission is scheduled to approve next week (12 October) proposals to reform the Common Agricultural Policy (CAP). The plans, prepared by Dacian Ciolos, the European commissioner for agriculture and rural development, and officials in the agriculture department, tailored to fit the funds allocated in the multiannual financial framework proposal for 2014-20, which was published on 29 June. 

The proposals have already been discussed by other Commission departments, and are being scrutinised by agricultural experts from other commissioners’ private offices.

So far in the Commission’s internal discussions, three issues have emerged as the most controversial.

Making direct payments ‘greener’

The multiannual financial framework proposal approved in June earmarked almost €282 billion for direct payments and market support for 2014-20. Recent reforms have decoupled direct payments from actual production so that they do not depend on which crop a farmer cultivates, leaving the farmer free to farm the most profitable crops or animals.

To ensure that the EU’s agricultural policy contributes to tackling climate change and is environmentally sustainable, the Commission wants 30% of direct payments to be made “greener” – conditional on farming taking place in an environmentally sustainable way.

But farmers’ representatives are warning that the additional criteria that farmers must meet will impose extra costs and make European agriculture less competitive. Pekko Pesonen, secretary-general of Copa-Cogeca, which represents European farm unions and co-operatives, said: “The Commission admits that new requirements will entail increases in costs and bureaucratic burdens for farmers. This will make it harder for farmers to respond to the market.”  

As European Voice went to press, the Commission was considering requiring farmers to ensure crop diversity, and maintain grassland pasture and special environmental areas on 7% of cultivated land. Pesonen said his organisation had “serious doubts” about such moves, because they would require farmers to grow the same amount of crops on less land. European farming is already failing to increase productivity at the same rate, he said.

Environmental and conservation campaigners are concerned that the green measures do not go far enough. Ariel Brunner, head of EU policy at BirdLife Europe, said the reforms contained a lot of “green empty labels”. BirdLife would like to see payments to encourage farmers to maintain grassland and special environmental zones.

Capping payments

Ciolos says he aims to boost public acceptance of the CAP and support for rural areas. Around 80% of the EU’s farm support goes to large enterprises, because direct payments are based on past production levels or farm size.

Ciolos is proposing that the maximum amount of direct payments per farm should be capped at €300,000, and even beneath that level payments should be made on a sliding scale. To avoid penalising large farms that employ significant numbers of workers, Ciolos wants to deduct a farm’s labour costs before applying the reductions. The aim is to ensure that direct payments serve as income support for farmers and their workers, while large mechanised farms that employ fewer people would receive smaller amounts of money.

Pesonen says that capping goes against the principle of encouraging farmers to be more competitive, because farms would have their support reduced if they grew above a certain size. The UK and Germany have traditionally opposed capping because they have a high proportion of large farms. The Czech Republic and Slovakia are also expected to oppose the limits because they have a considerable number of large farms that were agricultural co-operatives in communist times.

Inactive farmers

The CAP has been strongly criticised because landowners are entitled to receive direct payments even if they are not ‘active farmers’. A report by the European Court of Auditors on the EU’s spending in 2009, published in June found that farm support had been paid to the likes of sports clubs, airports and campsites.

Ciolos wants to move to a system where only farmers benefit. A definition of active farmers contained in a draft version of the CAP legislation provoked the ire of the Commission’s trade department, on the grounds that it would cause problems for the EU at the World Trade Organization (WTO). Under WTO rules, payments to farmers linked to actual production are supposed to be limited to reducing the distorting effect on global food trade of rich countries – such as the EU and the US – spending large sums of money on their farm sectors.  A spokesman for Ciolos said the commissioner was very keen for the principle of active farmers” to be part of the CAP prop-osals, so that funds only went to producers. He said that Ciolos’s team was still working on the definition.