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The new CAP: fairer and more coherent, but as complicated as ever

New policy framework will not make it easier to follow

The new Common Agricultural Policy for the period 2021-27, as proposed by the European Commission today (June 1), has a number of virtues as compared with its immediate predecessors – but the much sought-after goal of CAP simplification will remain elusive, if the policy framework outlined by Commissioner Phil Hogan is any guide.

It is true that the new CAP is more coherent, more internally logical, and easier to evaluate than previous versions have been. At least, it holds that status at present – whether it remains so once the Council and Parliament have finished wrangling over the details, and exacting the inevitable compromises that will result from that process, is another matter entirely.

But a policy built around three core regulations, 27 national ‘CAP strategic plans’, nine thematic objectives, and 26 points of aid payment ‘conditionality’ can scarcely be described as ‘simple’.

In a sense, the new CAP’s most radical innovation – the widely-trailed creation of over-arching policy programmes for each member state – will make the whole of the CAP much more like the current Pillar Two, in terms of its devolved structure. This will bring benefits, but it will not serve to make the workings of the CAP any easier to follow.

Preparing for a more volatile future

Such considerations are, of course, less important than the question of whether or not the new CAP will help to prepare Europe’s farmers for a more economically volatile and environmentally challenging future. And on this score, Hogan’s new policy blueprint makes some useful steps in the right direction.

Capping payments per farm at €100,000 (with a degressive tailing off of access to aid entitlements between €60,000 and €100,000) will not revolutionise the structure of European farming, but nor was it ever intended to do so.

It still remains unclear to what extent the provision to allow employment costs to be deducted from the aid total for capping purposes will negate the overall thrust of the proposal.

But the key thing is that the Commission is planning finally to dismiss the fiction that the aid paid on the 1,000th hectare of a large landowner is economically equivalent to that which is paid on each of the hectares owned by a small mixed farmer. By paying out less of the former, member states will have a little more to allocate to the latter; and that, in the context of a Brexit-straitened budget, could be of crucial political significance.

The allocations to each member state for Pillar One and Pillar Two, which are set out in the Annex to the new Regulation, show the extent of the reductions which each member state faces as compared with the current CAP, although these figures are advisory only at this stage, as member states will have the option of transferring up to 15% of their allocations between Pillars, or potentially up to 30% from Pillar One to Pillar Two if required.

Other helpful innovations have been included in the Commission’s proposal, including a trebling of the Horizon Europe budget for agri-food scientific research, a shift in the focus of agri-environmental measures from “rules and compliance to performance and results” (in Hogan’s words), and a requirement for annual performance reports to ensure that member states are delivering on their strategic objectives.

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A scramble to reach agreement

The big elephant in the room, however, is the timetable for the ambitious legislative process which the Commission has now set in motion.

Much of 2019 will be a write-off in terms of legislative action, with the Parliament rising in early spring to prepare for elections, and the Juncker Commission’s own term of office coming to an end in the autumn of next year. Given that fact, and the inter-linkage (now explicitly recognised by the Commission) between the CAP process and the parallel process to agree the Multiannual Financial Framework for 2021-27, the chances of the CAP package being finally agreed any time before early 2020 look very slim.

The chances are therefore very high that 2021 will effectively become a re-run of 2014 – when farmers were drawn into a one-year ‘transition’ period in which they were caught in limbo between old and new regimes.

 

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