The Common Agricultural Policy post-2013

The fifth major reform of the Common Agricultural Policy (CAP) was completed in 2013: the new regulations have been published and the necessary delegated acts are gradually being adopted. The arrangements for implementing the first pillar of the new CAP in the Member States are known, and the rural development programmes are in the course of being approved by the European Commission.

Legal basis

Articles 38 to 44 of the TFEU, basic acts and multiannual financial framework: see Fact Sheets 5.2.1, 5.2.2, 5.2.3, 5.2.4, 5.2.5 and 5.2.6.

2014, a transitional year between the old and the new CAP

2014 was a year of elections and new appointments in the EU institutions (for the period 2014-2019), in particular the European Parliament, elections to which were held in May. It was also a transitional year for the CAP, during which the Member States prepared to implement the new provisions, which give them a significant amount of leeway. For example, henceforth it will be for the Member States to make certain crucial choices on matters including the internal convergence system for direct aid, the level of coupled payments, and whether to introduce the redistributive payment (see table given below). The rural development programmes were also compiled, within the framework created by the new regulation. Regulation (EU) No 1310/2013 ensured that there was a seamless transition from the old to the new CAP. Most of the provisions of the new CAP entered into force on 1 January 2015.

The CAP in the EU’s 2017 budget

The EU budget for 2017 (Official Journal L 51 of 28 February 2017) contains a total of EUR 152.9 billion in commitment appropriations (at current prices). Direct payments account for 25.9% of commitment appropriations for 2017 (EUR 39.6 billion) and rural development measures for 9.3% (EUR 14.3 billion). In total, the CAP accounts for 37.6% of the 2017 EU budget (EUR 57.5 billion).

Implementation of the new CAP

The basic regulations underlying the new CAP were published in December 2013. Since then the Commission has been working on drawing up delegated acts, which are non-legislative acts of general application which supplement or amend certain non-essential elements of a basic act (see Fact Sheets 1.3.8 and 5.2.1). The first series of delegated acts was adopted by the Commission in March 2014, then forwarded to the Council and the European Parliament for scrutiny. Their entry into force was subject to no objections being voiced by either Parliament or the Council within a two-month deadline (renewable once). In April 2014, partly in response to requests from Parliament, the Commission adopted a declaration in which it undertook to evaluate compliance with the obligations on Ecological Focus Areas (EFAs) after the first year of the scheme’s application. This assessment is ongoing. Other delegated acts were adopted subsequently (for example, in April 2015, delegated Regulation (EC) No 215/560 concerning the system of authorisations for vine planting) or are being drafted. Implementing acts for the CAP are also regularly adopted, again by the Commission, in respect of measures requiring uniform implementation in the Member States.

Furthermore, four ‘waves’ of CAP simplification were implemented by the Commission from March 2015. The September 2016 ‘omnibus’ proposal (see below) also has the stated aim of simplifying the CAP.

a.First pillar (P1)

The table below gives an overview of the diversity of arrangements for implementing the new direct payments scheme, which is the result of the choices made by Member States.

Net transfers between the two pillars (P1 to P2) stood at some EUR 4 billion for the period as a whole.

  Transfer from P1
to P2
Transfer from P2
to P1
Redistrib. payment Payment for areas subject
to natural constraints
Optional coupled support Small farmers scheme
BE X   X (Wallonia)   X  
BG     X   X X
CZ X       X  
DK X     X X  
DE X   X     X
EE X       X X
EL X       X X
ES         X X
FR X   X   X  
IE         X  
IT         X X
CY         X  
HR   X X   X X
LV X       X X
LT     X   X  
LU         X  
HU         X X
MT   X     X X
NL X       X  
AT         X X
PL   X X   X X
PT         X X
RO X   X   X X
SI         X X
SK   X     X  
FI         X  
SE         X  
UK X       X  
Total 11 5 8 1 27 15

The application of the new direct payments scheme within the Union also differs with regard to the minimum conditions for direct payments, the implementation of the clause concerning active farmers, and whether or not basic payments are subject to a ceiling. Lastly, as regards the greening of direct payments, five Member States (Austria, France, Ireland, the Netherlands and Poland) have indicated that they wanted to give farmers the option of complying with their obligations by adopting equivalent practices. Moreover, the choices of land area type eligible for designation as Ecological Focus Areas vary considerably within the Union (the commonest being areas of nitrogen-fixing plants a category which is eligible in every country except Denmark, whereas only eight countries have included terraces in their lists).

b.Second pillar (P2)

Over a one-year period (between December 2014 and December 2015), the Commission approved all 118 rural development programmes drawn up by the 28 Member States. Twenty Member States chose to implement a single national programme, and eight opted to use more than one programme (so as to reflect their geography or administrative arrangements, for example) (5.2.6).

Recent initiatives

More and more initiatives centred around the future of CAP are being set up. At an informal meeting in May 2016, for example, the Dutch Presidency of the Council of the European Union launched the debates on the future of the CAP after 2020. In September 2016, the Slovak Presidency held an informal meeting on unfair trading practices in the food supply chain. Another informal meeting on the future of the CAP was held in September 2016 in Chambord, on the initiative of France. More recently, in March 2017, some Member States presented a ‘non-paper’ on improving the functioning of the food supply chain.

In addition to this, the working group created in January 2016 to reflect on the future of agricultural market policy presented its final report in November 2016.

As part of the mid-term review of the multiannual financial framework 2014-2020, the Commission adopted an ‘omnibus’ legislative proposal on 14 September 2016 (COM(2016) 0605) covering a large number of European policies, including the CAP. It thus relates, therefore, to the implementation of the income stabilisation tool, access to financial instruments under the Second Pillar, and the definition of ‘active farmers’. The European Parliament drew on the recommendations of the Agricultural Markets Task Force to table supplementary amendments aimed at strengthening the CMO mechanisms.

The Commission is in the process of publishing delegated and implementing acts to simplify the application of greening and deal with the management of the fruit and vegetable markets. What is more, President Juncker announced in a letter of intent to the Presidents of Parliament and the Council on the State of the Union in 2016 that a communication is to be published on modernisation and simplification of the CAP. In preparation, the Commission opened a public consultation on the future of the CAP in February 2017, which is due to conclude in May 2017.

On the Second Pillar, a ‘Cork 2.0’ conference was held, 20 years after the initial conference in the city of Cork, which led to the adoption of a declaration highlighting ten key policy orientations for the future of rural development policy in Europe.

Prospects for CAP reform in 2020

Will the trends apparent in the recent reform of the CAP be confirmed in 2020? Issues up for discussion may include whether direct payments should continue to be given greater financial priority than rural development, and what proportion of the budget should be earmarked for market measures. The role of the crisis reserve may also be reviewed in the light of the experience gained between 2014 and 2020. Risk management measures do not so far loom very large in the CAP: will they assume importance? The future of measures to promote business cooperation among farmers, particularly in sectors where supply control measures have been discontinued (milk, sugar, wine) is also likely to be a key issue.

There is then the question of the co-financing of direct payments, which could result in the creation of a single support pillar for farming and rural development — a topic which the last reform did not address, mainly because of the economic crisis. The question of how the CAP funds are to be coordinated with the rest of the European Structural and Investment Funds will probably be raised, as will that of expenditure on agricultural research and innovation.

Another question will be the future structure of direct payments, in particular the relative importance of each of their parts components, such as support for the production of public goods. Will there be plans to convert the basic payment into a flat rate amount per hectare for each farming sector? The future of production-related payments, and of the redistributive payment, is also sure to be discussed. With that in mind, whichever model for the implementation of direct aid prevails between 2014 and 2020 will probably have an influence on the future direct aid model adopted. The definitions of active farmers and small farmers may also be reviewed.

Finally, the new CAP will probably be influenced by the outcome of the Brexit negotiations and the new approaches of the Trump administration to international trade and multilateral environmental agreements (e.g. COP21 on combating climate change).

Role of the European Parliament

The 2014-2020 reform of the CAP was the first in which the European Parliament was involved as a co-legislator. With this initial experience under its belt, Parliament will make sure that it plays a central role in the forthcoming reforms. The European Parliament’s Committee on Agriculture is working on a large number of forthcoming reports (price fluctuations, jobs in rural areas, innovation, unfair trading practices, etc.). Parliament is also keeping a close eye on the adoption by the Commission of CAP-related delegated acts, to which it may raise objections. Alongside this, Parliament is continuing to play its role as co-legislator in connection with a large number of issues relating to the new CAP, in particular the revision of the multiannual financial framework 2014-2020 (the ‘omnibus’ regulation).

Guillaume Ragonnaud / Albert Massot

06/2017