The European Union (EU) Commissioner for Agriculture and Rural Development has said he supports an increase in the Common Agricultural Policy (CAP) budget.
Commissioner Janusz Wojciechowski told the first meeting in 2023 of the European Parliament Committee on Agriculture and Rural Development (AGRI) that he will “propose an increase in the CAP budget during the mid-term review of the 2021-2027 MFF (Multiannual financial framework) 2021-2027”.
Members of the committee on Agriculture and Rural Development met in Brussels today (Monday, January 9) to discuss at length the impact that inflation was having on the current CAP budget.
The commissioner said stronger CAP budgets are needed and at the end of 2023 the commission will publish its first report assessing all CAP strategy plans.
He said it was of crucial importance that “CAP support provides sufficient incentives to producers to remain compliant with the growing and costly obligations”.
Inflation and CAP
Members of the AGRI committee highlighted during the meeting that the current policy was established on the basis of 2% inflation. But current data from the European Central Bank suggests the value of the current “CAP will drop by €85 billon” taking it down to the level of the 2007 CAP.
Some members also pointed out that in their opinion the current CAP was built around “political priorities that were not really helping producers”.
They pointed to “climate change” as a political issue while other members called for a “broad drop in agricultural taxes” energy tax breaks and a drop in taxes in agricultural products which they claimed would lead to a drop in agricultural costs.
Commissioner Wojciechowski acknowledged that the CAP budget had “difficulties catching up with inflation” and right now there was a “large discrepancy”.
“We cannot ask farmers to give us more for less, I believe it will be very difficult for us to implement our tasks in farming in Europe by the year 2027,” he told committee members.
“If we look at the value of farming production in the European Union which has increased mainly due to inflation right now it grew from €440 billion last year to €536 billion – which means that our annual CAP budget accounts for just 10% of the annual production value in farming in the EU.
“Indeed this amount will not have such an impact on farmers’ incomes similar to what we saw in the previous years and I believe this is an issue that we should start worrying about,” Commissioner Wojciechowski warned.
He said evidence suggested that some organic farmers in Europe were “starting to think about perhaps returning to conventional farming”.
“What worries me is that the decline of the percentage value of the CAP payments in the total farming income is going to lead to specific problems,” he added.
He recounted a conversation to the AGRI committee which had taken place recently when he met with farmers in Poland.
Commissioner Wojciechowski said a farmer told him that he was really thinking hard about whether the amount he was receiving from CAP would be affordable for him and whether it “would pay” him .
He said the farmer had to decide whether it would make sense for him to accept the restrictions imposed by policy regulations and whether it made sense for him to adhere to the requirements.
Or the farmer, had told the commissioner, that perhaps it would be a better idea for him “to forgo the CAP payments and just go ahead and produce without the restrictions”.
“I am afraid that we are close to the limit where many farmers might decide to make the switch, we are asking a lot from farmers, we asking them to make a lot of effort in terms of the environment.
“But at some point farmers will start to figure out whether it pays, whether makes sense to exclude four per cent of the production area and bear the cost and receive the payment from CAP,” the commissioner added.
He said some farmers might now think that it would make “more sense” for them to fully use their production potential .
Commissioner Wojciechowski added:
“I am absolutely convinced that we really need to look at that. The size of the budget might not be sufficient to motivate farmers to take up those challenges.”