EU green light for ‘simpler and fairer’ CAP post-2018

Rules to simplify the European Union’s (EU’s) farming policy, boost farmers’ bargaining power and better equip them to face risks have been endorsed by the European Parliament’s Agriculture Committee.

The update of the Common Agricultural Policy (CAP) rules, provisionally agreed by the parliament’s and council’s negotiators on October 12, and endorsed by the council’s Special Committee on Agriculture on November 15, was today given a green light from the parliament’s Agriculture Committee by 39 votes in favour, to five against.

The decision is aimed at supporting “simpler and more flexible” EU farming policy rules and strengthening farmers’ position in a fairer supply chain.

To boost farmers’ bargaining position in the food supply chain, and ensure its fair functioning, the approved text allows all recognised farmer organisations to plan production and negotiate delivery contracts on behalf of its members without falling foul of the EU’s competition rules.

Collective negotiations have so far been allowed only for milk, olive oil, beef, cereals and arable crops producers.

It will also provide farmers with better tools to face market and production risks.

Due to a series of agricultural crises in recent years, MEPs insisted that farmers must be given better tools to protect themselves from both market volatility and unforeseen production risks – such as adverse weather conditions, plants pests or animal diseases.

To this end, new laws will:
  • Introduce a sector-specific Income Stabilisation Tool (IST) so that losses incurred by farmers could be calculated for the type of production that was hit and they could be compensated (even if their other productions did not suffer).
  • Update current rules for: crop, animal and plant insurance; mutual funds; and for the IST to increase compensations and make them accessible to more struggling farmers.
  • For insurance and sectorial IST, compensation of up to 70% (up from 65%) should be available for those who lost more than 20% (down from 30%) of their annual production (for insurance) or income (for the sectorial IST).
  • For mutual funds and the general IST, the maximum level of compensation will be also increased from 65% to 70%, but it will continue to be available to those who lost more than 30% of their annual production or income.
  • Untie the commission’s hands in times of crises by allowing it to move quickly with exceptional actions, without the need to activate first the public intervention and private storage measures.
  • Allow member states to grant coupled support to their ailing sectors, which are particularly important for economic, social and environmental reasons – regardless of whether or not they experienced a drop in their outputs. Coupled support is currently limited to sectors struggling with maintaining previous levels of production.

More flexibility for active and young farmers

The agreed text gives member states more flexibility to define an active farmer; i.e. a person eligible for EU farm subsidies. EU funding will continue to be reserved for those who carry out the minimum farming activities.

However, as of 2018, national governments could relax existing requirements to make blacklisted entities – i.e. businesses by default not recognised as active farmers – eligible for EU subsidies, or even do away with the blacklist completely.

MEPs ensured that member states would be allowed to increase young farmers’ top-ups from 25% to 50% of the basic payment entitlement; but within the same range of first hectares (25-90).

Young farmers could now benefit from the top-up for a full five years regardless of when, during this period, they apply for it.

Background and next steps

The CAP-related articles of the so-called “Omnibus” regulation were split from the non-agricultural part of the draft law on EU spending by the November 16 decision of parliament’s Conference of Presidents to ensure speedy entry-into-force of new EU farming policy rules.

The agreed text now needs to be confirmed by the European Parliament and European Council as a whole – probably during its December 11-14 plenary session in Strasbourg. It should enter into force as of the beginning of next year.