Transition to new EU farm policy: Partial deal on key provisions for after 2020  

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  • EU farm subsidies and rural development funding to continue uninterrupted 
  • Transition period to last for two years 
  • Easier access to risk-management compensations and national aid 
Left to right: Top negotiators Michael NIEJAHR (Commission), Norbert LINS and Elsi KATAINEN (Parliament), and Nikša TKALEC (Council)  

Parliament and Council negotiators reached a partial agreement on the second batch of rules to ensure a smooth transition from current EU farm policy to the future one, on Tuesday.

The provisionally agreed text extends the application of existing Common Agricultural Policy (CAP) rules, which are due to expire at the end of 2020. It ensures the continuation of payments to farmers and rural development beneficiaries and provides predictability and stability for the sector.


Two years long transition period


The duration of the transitional period, starting on 1 January 2021, should be two years, the Parliament and Council negotiators agreed. The Commission originally proposed a one year- long transition period, which both co-legislators considered insufficient due to the repeated delays with the EU long-term budget negotiations and the closely related CAP reform talks.


Easier access to risk-management compensations and national aid


MEPs managed to convince the Council and the Commission to allow member states to ease access for farmers to compensations for severe income drops and for losses caused by adverse climatic events, outbreaks of animal or plant diseases or pest infestations. The threshold for triggering compensations could thus be lowered from 30% losses to 20% losses.


Parliament also pushed through measures that give member states more leeway in supporting farmers, especially during the COVID-19 crisis. These include for instance relaxing state aid rules to allow national authorities to calculate farmers’ due tax on the basis of their multiannual income and even temporarily exclude from taxation money saved by farmers for bad years, and for some member states extending the transitional national aid until the end of 2022.


More time for new climate, organic and animal welfare projects

Thanks to MEPs, the duration of new multiannual rural development projects focused on organic farming, animal welfare and agri-environment-climate measures will be limited to five years. The Commission originally proposed maximum duration of three years and only for organic and climate and environment-related projects.


More effective crisis reserve in the future


During the negotiations, MEPs repeated their call to finance the agricultural crisis reserve from outside the CAP budget. The partial deal does not include changes to its current functioning. But MEPs insisted, in their non-binding political statement attached to the legislative text, that proposals for a more effective, well-funded and cumulative crisis reserve should be revisited once the future EU long-term budget is agreed.


Quotes

“Keeping this file on track and on time has been my key priority, since this is in the best interests of farmers. It gives farmers predictability, stability, financial continuity and a confidence in planning the future for the upcoming two years. It also gives EU member states further tools to help their farmers deal with effects of the COVID-19 crisis”, said rapporteur Elsi Katainen (RE, FI).


“Closing the deal today on prolonging the CAP rules for two more years is a very good news and an important step that gives farmers clarity and legal certainty about their near future. But to finalise this deal and to speed up our work on the CAP reform for after 2022, we need an agreement on the future EU long-term budget. I therefore urge member states to rise to the challenge and finally come up with a feasible position. We need them to act fast”, said Agriculture Committee Chair Norbert Lins (EPP, DE).


Next steps


The text provisionally agreed by MEPs and the Croatian Council Presidency still needs to be updated with relevant figures from the future EU long-term budget, which has not been agreed yet. Once the deal on the 2021-2027 Multiannual Financial Framework (MFF) is reached, the Parliament and Council negotiators will meet again to finalise the transitional CAP rules for 2021-2022.


The final text will then have to be approved by both, the Parliament and the Council, before it can enter into force.

Background

The draft regulation is the second of two proposals tabled by the European Commission to ensure a smooth transition to the post-2020 CAP. The first set of transitional rules was approved by the Parliament in December 2019.


Parliament warned in its 10 October resolution that delaying the future EU’s long-term budget would harm EU citizens and businesses and urged the Commission to table a contingency plan to avoid disruptions in EU funding to beneficiaries.


The CAP reform is closely linked to the work on the EU’s long-term 2021-2027 budget. The future EU farm policy laws will be co-decided by the European Parliament and Council of the EU (agricultural ministers).



Type of document: Regulation