Towards a post-2020 Common Agricultural Policy  

The fifth major reform of the Common Agricultural Policy (CAP) was completed in 2013 and entered into force in 2015. Currently, the European Institutions are committed to adopting a new reform before the 2019 European elections.

Legal basis  

Articles 38 to 44 TFEU, basic acts and multiannual financial framework: see Fact Sheets 3.2.1, 3.2.2, 3.2.3, 3.2.4, 3.2.5 and 3.2.6

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 Regulation (EU) No 1305/2013. The new CAP entered into force on 1 January 2015.

The CAP in the EU’s 2018 budget  

The EU budget for 2018 contains a total of EUR 156.1 billion in commitment appropriations (at current prices). Direct payments account for 26 % of appropriations (EUR 40.1 billion) and rural development measures for 9.1 % (EUR 14.3 billion). In total, the CAP accounts for 37.6% of the 2018 EU budget (EUR 58.1 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 3.2.1). Their entry into force is subject to no objections being voiced by either Parliament or the Council within a two-month deadline (renewable once). Implementing acts for the CAP are also regularly adopted 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
optional
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

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) (see Fact Sheet 3.2.6).

Preparations for the CAP after 2020  

The ongoing work on the post-2020 CAP is proceeding in parallel with in-depth reflection on the future of the EU with 27 Member States, without the UK. The Bratislava European Council of September 2016 drew up a roadmap reflecting this, leading to the Rome Declaration of March 2017 and the publication by the Commission of a White Paper on the future of the European Union and several discussion papers.

In this context, the CAP budget is under pressure (particularly given that Brexit will leave a gap of EUR 13 billion in the EU budget after 2020) and the number of initiatives relating to its future is growing. At an informal meeting in May 2016, the Dutch Presidency of the Council of the European Union launched the debate about this. In September 2016, the Slovak Presidency held an informal meeting in Bratislava on unfair trading practices in the food supply chain. A ministerial meeting on the future of the CAP was held in September 2016 in Chambord, on the initiative of France. More recently, the Maltese Presidency launched the debate on the agricultural challenges related to climate change and the management of water resources and the Estonian Presidency focused on risk management strategies. In parallel, in 2017, a number of Member States presented ‘non-papers’ on improving the functioning of the food chain and the future of coupled payments.

In addition to this, the task force set up in January 2016 to reflect on the future of agricultural market policy presented its final report in November 2016. Legislative proposals will be tabled on this basis in the spring of 2018.

On the Second Pillar, the ‘Cork 2.0’ conference in September 2016, 20 years after the initial conference in the same city, led to the adoption of a declaration highlighting ten key policy guidelines for the future of rural development policy in Europe. 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. In principle, the aim was to make technical adjustments to the basic acts in force. Ultimately, at the instigation of the European Parliament, this has become a real mini-reform CAP. The European Parliament drew on the recommendations of the Agricultural Markets Task Force to table supplementary amendments aimed at strengthening the CMO (common organisation of the market) mechanisms. An agreement with the Council was reached in October and the text published in December 2017 (Regulation (EU) No 2393/2017, OJ L 350). The agreed improvements concern: the field of action of producer organisations; improvements to agricultural insurance and income stabilisation tools; the rules on green payments and payments to young farmers; and the definition of ‘active farmer’ (allowing very flexible application to Member States).

What is more, during the debate on the State of the Union in 2016, Mr Juncker announced a communication on modernisation and simplification of the CAP. In preparation, the Commission launched a public consultation on the future of the CAP in February 2017, which was concluded in May 2017. The Communication entitled ‘The Future of Food and Farming’ was published on 29 November 2017 [COM(2017) 713].

The Communication of November 2017  

There is a risk that the new challenges facing the Union (security, defence, migration) may put pressure on CAP funds. The Commission discussion paper of June 2017 on the future of the EU’s finances sets out five scenarios, four of which would involve a smaller agricultural budget. It also mentions the possibility of co-financing of direct payments.

The Communication of November 2017 proposes some avenues for the future reform of the CAP while confirming the continuation of direct payments and of the two pillars, as well as greater consistency with other Union policies in areas such as trade, migration, research, climate change or sustainable development.

The Communication outlines the priority areas which the future CAP must address (young farmers, countering market volatility, knowledge-based agriculture, sustainability and resilience of agricultural holdings). However, it remains very vague in operational terms. The most concrete proposal on the CAP mechanisms concerns a fairer distribution of first-pillar aid. It advocates capping direct payments, introducing degressive payments for large farms and using redistributive payments. On the other hand, the Commission is silent on possible co-financing of direct payments and on measures against crises and to rebalance the agrifood chain.

But what is at the centre of the communication is agricultural governance. It proposes a radical change in the implementation model of the CAP, focused on results and on subsidiarity, giving Member States a much more prominent role in the deployment of CAP programmes. In the future, the EU should set the substantive parameters (CAP objectives, main types of intervention, basic requirements), while the Member States should devise strategic plans in order to attain the specific objectives and targets decided jointly.

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 has adopted a large number of prospective reports (on price fluctuations, jobs in rural areas, innovation, unfair trading practices, etc.). The European Parliament has already started discussions on the Communication of November 2017 and it will draw up an own-initiative report (Dorfmann report) before submission of the legislative proposals for the new CAP, which are expected in June 2018. Parliament is also 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 and trade agreements.

 

Albert Massot