The RISE Foundation has been campaigning for a greater share of CAP money to be spent on incentivizing and supporting farmers and land managers to produce more of the environmental and social public goods society demands but does not pay for. Last week’s proposals from the European Commission suggest that the Commission has shied away from the bold ambitions announced in the October communication to fundamentally green the CAP and move towards a comprehensive public goods policy. Rather the proposal could better be described as a moderate reform and attempt to better redistribute support between member states and legitimize direct payments. We always felt that second pillar targeted measures tailored to local site conditions and based on multiannual contractual payments with farmers were the best delivery tools for public goods as we argued in our June study for the European Parliament. It remains to be seen whether the green payments in the first pillar, requiring seven per cent of the UAA to be set aside for ecological focus areas will be flexible enough under the annual contract system to deliver substantive environmental improvements over time. At the very least they will now be subject to the same monitoring and evaluation requirements as pillar two payments. However, this could also risk adding further bureaucracy and reduce the incentive of farmers to make use of the 30% dedicated to greening measures.
A second big disappointment for the RISE Foundation is the appearance of the reverse modulation clause offering certain Member States in which direct payments would remain below 90% of the EU average the possibility to transfer funds from the second to the first pillar to top up direct payments. This is a great weakness as it opens the door for member states to further weaken the second pillar, arguably the key element of the CAP for delivering public goods. Furthermore, the proposed rural development budget will suffer a decline in real terms for 2014-2020 even though some countries may decide to take advantage of the option to move up to 10 per cent of Pillar 1 funds to Pillar 2.
On the positive side, the proposed reintroduction of a minimum spend of 25% of RD funds on issues related to land management and the fight against climate change is to be welcomed since it was feared that these funds, if not specifically ring-fenced for spending on green measures, could have been channeled into innovation and modernization spending, creating market distortions and disadvantageous conditions in the market for those member states who wanted to go further with greening. In the leaked versions of the new CAP proposal, no such minimum spending had been designated therefore this is a welcome improvement. Furthermore, there is a real emphasis on innovation and knowledge transfer which is also to be welcomed, although details on practical implementation measures are still lacking and need further specification –especially details of how to strengthen the current farm advisory system. Another encouraging sign comes from the new Multi-annual Financial Framework which has earmarked €5.1billion for spending on research and innovation which, along with the creation of a new European Innovation Partnership initiative for agricultural productivity and sustainability, could give an important boost to the development of solutions to promote increased productivity and sustainability, both of which crucially underpin the long-term competitiveness of European agriculture. However, in terms of global spending on agriculture, keeping the CAP budget constant at 2013 levels would mean a substantial loss of spending in real terms especially if inflation picks up. And this despite the growing need to produce better results for the environment – particularly in the fields of water management and bolstering the conditions to support farmland biodiversity where real improvements impose heavy financial burdens on farmers. Furthermore, the European Global Adjustment Fund of €2.8billionn will do precious little to shelter European farmers from intense competition in the event of a trade accord with the MERCOSUR countries. What is missing from the Commission’s legislative proposal for CAP reform is a vision for European agriculture in 2020 and beyond as regards key issues such as climate change, biodiversity and technology.
We will therefore continue to argue for greater resources from the public and private sector for nature and ask the European Parliament and member states to do their upmost to ensure the focus on public goods production is optimal. The race is on for a green new deal for agriculture!
