CAP Debate Moves Forward In Brussels

25 May 2011
SNP MEP and full member of the European Parliament's powerful Agriculture Committee, Alyn Smith has today (Wednesday) fought his way through an Icelandic ash cloud to get to Brussels to support a report on the shape of the future Common Agricultural Policy (CAP).

The report, subject to some 1267 amendments, was approved today by the Parliament's Agriculture Committee by 40 votes to 1 with 2 abstentions.
Overall the report, drafted by Bavarian Christian Democrat Albert Dess, has much to be welcomed by Scottish producers. A full briefing on today's vote is available below.
The report will now go to the full Parliament plenary session in June where it is likely to be substantially unchanged. The report will be instrumental in the European Commission's formal reform proposals due in the Autumn.
Smith said:
"This report was always going to be a compromise, but I think it has worked out pretty well for Scottish farming, and indeed the Scottish government.
"Most importantly, the Committee cheerfully rejected the UK Treasury-Defra view that direct payments should be phased out and that the budget should be cut. This just underlines how isolated the UK government is in European negotiations.
"Of particular benefit for Scotland was the successful passage of one particular statement in the report which calls for a fairer allocation of both Pillar One and Pillar Two budgets across and within member states. Scotland currently sits as the fourth lowest Pillar One allocation in the EU and the lowest Pillar Two allocation, so should the European Commission now take steps to balance the allocations out, we have a lot to gain.
"We may well eventually see a "green top up" to direct payments in the first Pillar and this still needs a fair bit of clarification. However if this is designed properly and recognises the substantial achievements made by our farmers then I don't think we have much to fear and it could well be an elegant mechanism to reward ongoing best practice. The Committee today made it clear that we would like to see an element of choice for farmers in the types of programmes that they can apply, and that there should not be an additional payment, control or sanction system for farmers to deal with.
"The report also praises the contribution of LFA schemes and calls for them to be retained as a tool against land abandonment, and "emphasises that the fine tuning of criteria must lie with Member States, and regional and local authorities." This is crucial. Scotland, with such a high percentage of LFA, needs the power to adapt this scheme to best serve our needs.  
"There are only two clearly negative elements in the final report. First, the Committee approved the principle of capping direct payments, through the proposal of applying "degressivity" to direct payments based on employment and sustainable practices. Second, the statement on export refunds was simply not strong enough in calling for their unilateral abolition.
"However, all in all this is a solid piece of work, and has been a good step in the right direction for Scottish farmers. We shall have to wait and see what the full Parliament makes of it next month."

A full briefing on today's vote is available below.

  • Aims: "Food security remains the raison d'être of agriculture" - however CAP support must help farmers supply public goods such as ecosystem services, landscape management and rural economic vitality as well as food production. The rules need to be clear for the long term so that European farmers can plan their investments.
  • Budget: The report "calls for the continuation of a strong and sustainable CAP with a budget commensurate with the ambitious objectives" and that adequate financial resources are necessary. Payments must deliver clear public benefits in a transparent manner for society, such as public goods whose costs are not offset by market prices.
  • Direct payments should be retained. The historical reference values are "outdated" and should be gradually replaced after a transitional period with "better targeted" and "fair" payments which "take account of the specific production conditions in the Member States", with "special measures" per region. The notion of a uniform EU-wide flat rate is rejected. Payments must be more fairly distributed between Member States and regions, with each Member State receiving a "minimum percentage" of the EU average direct payments.
  • Small farmers: There will be a "specific, simplified aid scheme" for small farmers, who will be defined by the Member State on the basis of criteria set by the Commission.
  • Coupled payments: Although the overall trajectory of decoupling payments should continue, "well-coupled premiums" should continue to be paid "in certain areas in which there is no alternative to the established, cost-intensive forms of production" to promote the livestock sector, area-based environmental measures and territorial cohesion.
  • Capping: The report welcomes the Commission's attempt to provide some sort of upper ceiling for direct payments, and proposes a system of degressivity of direct payments which take into account employment and sustainable practices.  
  • Payments should be reserved for active farmers which the Commission should define based on the concept of farmers who produce and maintain GAEC, with the range of land tenure and land management taken into account. 
  • Greening: "Additional incentives" are needed to encourage farmers to adopt environmental practices that go beyond the cross compliance baseline and complement agri-environment programmes. There should be an EU-wide incentivisation scheme, linked to the payment of direct payments, to assist farmers in engaging in sustainable agricultural practices, which should also be linked to a simplified and streamlined cross compliance system, without an extra payment, control and sanction system. Such a scheme would consist of a priority catalogue of measures (which would be 100% EU financed), and participants would implement "a certain number" of measures based on a regional list on the basis of an EU list: such measures would include crop rotation, feed efficiency plans, permanent pastures and buffer strips.
  • Cross compliance needs to be significantly simplified and streamlined: it must be "risk-based and proportional". The report suggests a number of measures, including exchanging of best practices between paying authorities, interoperable databases, penalty systems which have tolerance levels and apply proportionality, and linked to performance criteria. There should also be a critical review of hygiene, animal health and marketing standards to "end the disproportionate burdens imposed on SMEs".
  • Market Intervention: Market instruments should be "flexible and effective", and "act as a safety net". They could include specific supply management instruments, "if employed fairly and on a non-discriminatory basis". National risk insurance instruments, and private sector instruments such as insurance, futures contracts and mutual funds could be promoted as options by Member States. There should be a special reserve budget line as a rapid reaction tool against severe crises in the agricultural markets. The position of primary producers can be strengthened through assisting the management capacity and bargaining power of producer organisations, through greater transparency in food prices, action against unfair commercial practices and the appointment of food chain ombudsmen.
  • Export refunds should be phased out in parallel with partner countries.
  • Rural development should contribute to the well-being of the whole rural community, through investments in rural infrastructure, on-farm renewable energy and food security. "Subsidiarity and flexibility" should apply when designing programmes, as regional authorities "are best placed" to decide on the programmes.
  • LFA: The report praises the contribution of LFA schemes and calls for them to be retained as a tool against land abandonment, and "emphasises that the fine tuning of criteria must lie with Member States, and regional and local authorities." LFA will remain entirely in Pillar II.
  • Young farmers: The report calls for a number of measures to improve the situation of young farmers, including changing the rules governing the national reserve to gear them more to young farmers; access to land, grants and favourable loans; and training.
  • Modulation: Adequate resources must be available for both pillars and so both compulsory and voluntary modulation should be abolished.
  • For the moment, the Water Framework Directive should not be in cross compliance. 
  • Various attempts to revive the issue of milk quotas were defeated.
  • A successful amendment calls for the CAP not to fund the production of food from cloned animals or their descendants.