In September 2016, the Commission presented its mid-term review of the multiannual EU budget (2014-2020). Without increasing spending limits agreed with the European Parliament and Council, the package sought to free up additional financing by 2020.

These resources are designed to foster job creation, investment and economic growth and to address the migration crisis. In this context, the Commission presented a legal proposal in the form of an ‘omnibus regulation’ that contained changes to the financial rules applicable to the EU’s general budget, This included amendments to 15 legal instruments concerning multiannual funding programmes, in areas such as structural and investment funds and infrastructure, as well as the CAP regulations.

In relation to agriculture, the Commission’s proposals were named at fine-tuning some elements in the current CAP. They included proposals for a range of policy-related simplification measures through changes to all four of the basic regulations governing the CAP. These are:

• the Direct Payments Regulation (EU) No 1307/2013;
• Rural Development Regulation (EU) No 1305/2013;
• Common Market Organisation Regulation (EU) No 1308/2013;
• The ‘Horizontal’ Regulation (EU) No 1305/2013.

The Commission proposed changes, to direct payments by allowing Member States greater discretion in the application of the definition of active farmer. In the case of young farmers, Member States would be allowed to increase young farmers’ payments. The proposed changes also covered a range of pertinent issues such as greening, risk management tools, markets policy. In the case of the latter, the bargaining position of farmers in the food supply chain was addressed.

In October 2016, the Parliament’s Committee on Agriculture and Rural Development (AGRI Committee) discussed for the first time the ‘omnibus’ proposals, when the Committee was addressed by the Commissioner for Agriculture and Rural development, Phil Hogan. The majority of members welcomed the opportunity to simplify the CAP but concerns were expressed about the procedure of placing all sectoral changes in an omnibus legal instrument along with several other policy areas under the Multiannual Financial Framework (MFF). For this reason, the AGRI Committee requested and obtained from the two 'lead committees' on the omnibus proposal (the Committee on Budgets and the Committee on Budgetary Control), the possibility of defining autonomously the position to be submitted to plenary concerning the agricultural provisions, and of conducting subsequent interinstitutional negotiations in trilogue.

Within the Council, the specific working method to handle the different parts of the omnibus proposal was agreed in December 2016. Four trilogue meetings were held between July and October 2017, resulting in agreement on an overall compromise package. On 6 November 2017, the Council’s Special Committee on agriculture (SCA) agreed on the necessary steps to allow the changes to agricultural legislation to apply from 1 January 2018, and that the agricultural provisions should be split from the remainder of the omnibus proposal. A later entry into force would result in delaying application of some of the simplification measures to 2019. No Member State delegation opposed the split. On 15-16 November 2017, Coreper (on the Council side) and the Conference of Presidents (on the European Parliament side) formally approved the split, allowing the AGRI committee to draw up a separate legislative report for these areas.

The AGRI committee approved, by 39 votes in favour to 5 against, the text of the agricultural component of the omnibus regulation on 22 November 2017. In a plenary session of the European Parliament, held on 12 December 2017, the amendments to the basic regulations governing the CAP were approved by 503 votes in favour to 87 against, with 13 abstentions. Following this vote, the Council subsequently adopted the agricultural provisions of the omnibus regulation. In practical terms the new regulation:

• strengthens the position of farmers in the supply chain: all recognised farmers’ organisations will be allowed to plan production and negotiate supply contracts on behalf of their members without clashing with EU competition rules;
• introduces a new sector specific income stabilisation tool;
• allows Member States more flexibility in defining what constitutes an active farmer,
• allows Member States to increase the direct payment top ups for young farmers;
• simplifies and extends the greening rules for direct payments.

 The adopted regulation entered into force on 1 January 2018.

References:

• EP Legislative Observatory, Procedure file Financial rules applicable to the general budget of the Union: agricultural provisions 2016/0282B(COD)
• Proposal for a Regulation on the financial rules applicable to the general budget of the Union
• Council of the European Union, Presidency report on the State of Play, Interinstitutional File 2016/0282 (COD), 9 December 2016
• European Parliament, Provisional Agreement resulting from interinstitutional negotiations, 20 November 2017
• European Parliament, Simpler and fairer EU farm policy, Press release, 12 December 2017
• European Parliament, Legislative resolution of 12 December 2017 on the proposal for a regulation on the financial rules applicable to the general budget of the Union and amending Regulations (EU) No 1305/2013, (EU) No 1306/2013, (EU) No 1307/2013), (EU) No 1308/2013 and (EU) No 652/2014, COM(2016) 605, 2016/0282B(COD)
• Council of the European Union, Outcome of the Agriculture and Fisheries Council meeting, Brussels, 11 and 12 December 2017
• Regulation amending Regulations (EU) No 1305/2013 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD), (EU) No 1306/2013 on the financing, management and monitoring of the CAP, (EU) No 1307/2013 establishing rules for direct payments to farmers under support schemes within the framework of the CAP, (EU) No 13085/2013 establishing a common organisation of the markets in agricultural products and (EU) No 652/2014 laying down provisions for the management of expenditure relating to the food chain, animal health and animal welfare and relating to plant
• European Parliament, EPRS, Omnibus Regulation - Agricultural provisions, Plenary At a glance, December 2017

Author: James McEldowney, Members' Research Service, legislative-train@europarl.europa.eu