Omnibus: Provisional deal on simpler and fairer post-2018 EU farming policy 

• simpler and more flexible EU’s farming policy rules
• stronger farmers in the food supply chain
• better tools to deal with production and market risks

The provisionally agreed update of the Common Agricultural Policy (CAP) rules will be part of the final wording of the so-called Omnibus regulation, i.e. new law on EU spending, non-agricultural aspects of which are still being negotiated by Regional Development, Employment, Industry, Transport, Budgets and Budget Control MEPs and the Estonian Council’s Presidency.

Strengthening farmers in a fairer supply chain

Members of the Agriculture Committee insisted from the very beginning of negotiations that farmers’ bargaining position in the food supply chain must be boosted to ensure its fair functioning. To this end MEPs ensured that all recognised farmers’ organisations would be allowed to plan production and negotiate delivery contracts on behalf of its members without falling foul of the EU’s competition rules. Collective negotiations have so far been allowed only for milk, olive oil, beef, cereals and arable crops producers.

Better tools to face market and production risks

In the aftermath of series of agricultural crises in recent years MEPs wanted to give farmers better tools to protect themselves from both market volatility and unforeseen production risks such as adverse weather conditions, plants pests or animal diseases.

To this end the agreement will:

• introduce a sector specific Income Stabilisation Tool (IST) so that losses incurred by farmers could be calculated for the type of production that was hit and they could be compensated even if their other productions did not suffer,
• update current rules for crop, animal and plant insurance, mutual funds and for the IST to increase compensations and make them accessible to more struggling farmers. For insurance and sectorial IST, compensation of up to 70% (up from 65%) should be available for those who lost more than 20% (down from 30%) of their annual production (for insurance) or income (for the sectorial IST). For mutual funds and the general IST the maximum level of compensation will be also increased from 65% to 70%, but it will continue to be available to those who lost more than 30% of their annual production or income,
• untie the Commission’s hands in times of crises by allowing it to move quickly with exceptional actions without the need to activate first the public intervention and private storage measures, and
• allow member states to grant coupled support to their ailing sectors, which are particularly important for economic, social and environmental reasons, regardless of whether or not they experienced a drop in their outputs. Coupled support is currently limited to sectors struggling with maintaining previous levels of production.

Active and young farmers: More flexibility introduced

The deal gives member states more flexibility to define an active farmer, i.e. a person eligible for EU farm subsidies. EU funding would continue to be reserved for those who carry out the minimum farming activities. But as of 2018 national governments could relax existing requirements to make blacklisted entities, i.e. businesses by default not recognised as active farmers, eligible for EU subsidies, or even do away with the blacklist completely.

MEPs ensured that member states would be allowed to increase young farmers’ top-ups from 25% to 50% of the basic payment entitlement, but within the same range of first hectares (25 - 90). Young farmers could now benefit from the top-up for full five years regardless of when, during this period, they apply for it.

Quotes

“Thanks to the Parliament’s ambitious position we managed to use this Omnibus proposal to respond to various difficulties our farmers have been facing. Most of Parliament’s ideas on simplification, risk management and market measures are now included in the final text”, said head of Agriculture Committee negotiators Paolo De Castro (S&D, IT).

“Our farmers will have better tools now to respond to market volatility and environmental risks and to strengthen their position in the food chain. This will make EU’s farming policy fairer and simpler, better tailored to farmers’ needs and thus able to live up to consumers’ expectations”, Mr De Castro added.

“Today we managed to strengthen farmers’ position in the food supply chain. We also achieved a far-reaching simplifications of our farming policy. Member states will be able to decide whether or not they will automatically designate land not ploughed for five or more years as permanent grassland. Top-ups for young farmers will be better tailored to their needs, the definition of an active farmer will be maintained but made more flexible and risk management instruments will be strengthened”, said Agriculture Committee rapporteur Albert Dess (EPP, DE).

“Three additional plants - elephant grass (Miscanthus), cup-plant (Silphium perfoliatum) and honey (melliferous) plants - could now be grown on the ecological focus areas increasing thus biodiversity. Farmers will also be given greater incentives to grow nitrogen fixing crops to stimulate protein crops production in the EU”, Mr Dess added.

“The European Parliament has always aimed at strengthening the position of farmers in the food supply chain to ensure fairer income for them. We managed to allow producer organisations carrying out economic activities to plan production, negotiate contracts and optimise production costs as a derogation from the EU’s competition law”, said lead committee negotiator on Common Market Organisation rules Michel Dantin (EPP, FR).

Next steps

The provisional deal concludes the negotiations between the Parliament, the Council and the Commission on agricultural component of the Omnibus law. All other aspects of the draft financial regulation are still being negotiated by Regional Development MEPs (regional policy component) Employment (e.g. European Social Fund, European Globalisation Adjustment Fund, EU Programme for Employment and Social Innovation) Industry (e.g. Telecom, Space Surveillance and Tracking), Transport (Connecting Europe Facility), and Budgets and Budget Control MEPs (other components).

Following the final deal on all aspects of the Omnibus regulation the agreed text will have to be approved by the Parliament and the Council before it can enter into force.

Thursday, 12 October 2017

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