CAP: What is different and what remains the same in Pillar I and Pillar II?

The details of the new Common Agricultural Policy (CAP) were announced today, Tuesday, July 21. There are a number of changes in the new CAP compared to the current, with one such change being the format of the “two-pillar structure”.

The European Council has “agreed” the CAP budget for the next seven years (2021-2027) as part of the wider Multiannual Financial Framework (MFF).

CAP has a “two-pillar structure” – consisting of Pillar I and Pillar II. These two pillars are the sub-headings of CAP, helping to divide the elements of the policy.

Same, but different…

One of the changes announced by the council in its official document is that although in the new CAP these two pillars will still perform their functions similar to how they currently do, a change has been made to their format.

There will be a new delivery model introduced, which will bring both pillars under a “single programming instrument” – namely the CAP Strategic Plan.

The aim of this new plan is to contribute to “simplification and flexibility for EU member states”, according to the council.

Pillar I: Direct payments and market measures

Pillar I concerns direct payments and market measures. According to the council, it will “contribute to a higher level of environmental and climate ambition”.

The measures under Pillar I include the continuation of external convergence of direct payments – essentially, narrowing the difference between actual and average direct payments to farmers across the EU.

Also under Pillar I, it was announced that there will be the introduction of capping of direct payments “on a voluntary basis at the level of €100,000 for large farmers”. This capping will only apply to the Basic Income Support for Sustainability (BISS), the scheme that is replacing the current Basic Payment Scheme (BPS).

There will also be a replacement for the current Agricultural Crisis Reserve, which will now be the Agricultural Reserve. The intention of this reserve is to “provide support for the agricultural sector for the purpose of market management or stabilisation, or in the case of crises affecting agricultural production or distribution”, as outlined in the council’s document.

This reserve will be established at “the beginning of each year in the European Agricultural Guarantee Fund [EAGF]” according to the council.

Pillar II: Rural development

Pillar II exists with the aim to aid development in rural areas through economic and social schemes.

Through the European Agricultural Fund for Rural Development (EAFRD), there will be €77,850 million allocated.

Through the EAFRD, member states facing “particular structural challenges in their agriculture sector; or which have invested heavily in Pillar II expenditure; or which need to transfer higher amounts to Pillar I to increase convergence” will be allocated additional funds, according to the council’s document.

Ireland’s potential additional fund allocation is €300 million, as stated by the council.

Contrary to Pillar I, which is entirely financed by the EU, Pillar II is co-financed by the EAFRD, along with regional or national funds. These co-financing rates vary, according to the region and measure concerned.

Schemes that are currently in place in Ireland co-funded under CAP and national funding include GLAS and TAMS.

‘A reformed and modernised CAP’

Earlier today, a ‘reformed and modernised’ CAP budget was announced for the next seven years by the European Council. A figure of €356.3 billion (in what the council refers to as ‘2018 prices’) has been allocated under the heading of ‘Natural Resources and Environment’.