CAP tracker: Mapping the latest movements on EU farming policy

Welcome to EURACTIV’s CAP tracker, your one-stop shop for all the latest developments on the Common Agricultural Policy (CAP).

Be sure to check back here regularly for your weekly update on all things CAP, including the latest movements on the transitional arrangement and the current policy situation.

All of EURACTIV’s CAP related stories can be found here.

Current situation

MEPs and the rotating EU Council presidency hold by Portugal are currently into negotiations to settle the pending issues in the trilogue, the interinstitutional talks between the two co-legislators.

For the 2014-2020 CAP, the talks led by the then Commissioner Dacian Ciolos took 18 months of trilogue for a total of 56 meetings between Parliament and Council.

First step: CAP budget - After 92 hours of intense negotiations in Brussels, EU leaders agreed on 21 July on the EU’s next seven-year budget, which includes a deal on €344 billion CAP spending.

Second step: the negotiating mandates - The deal on the CAP budget reached by the EU leaders enabled the European Parliament and the Council to kick off negotiations and reach a final deal on the three laws forming the legislative framework of the programme.

After a two-year stalemate, ministers agreed on a common position to start negotiations with the European Parliament in an early-morning deal on Wednesday (21 October).

Meanwhile, MEPs also agreed on the European Parliament's position to start negotiations on a final text for the post-2020 Common Agricultural Policy (CAP). For a blow-by-blow account of the developments from the voting week, check out EURACTIV's live blog.

Scrap the CAP- Subsequently, the Greens wrote an open letter to Commission President Ursula von der Leyen urging her to withdraw “the Commission’s weak and outdated CAP proposal and present a new one that is in line with the EU’s Green Deal.” Greta Thunberg also added her voice to those calling for the CAP to the scrapped. However, von der Leyen put the matter to rest, saying that upcoming negotiations can still result in a reform that makes the programme fit for purpose.

March 'super' trilogue - Portugal’s agriculture minister Maria do Céu Antunes pushed for a CAP breakthrough by the end of March 2021. To do so, she convened a joint negotiation meeting with all three rapporteurs in the European parliament. Although this ‘super trilogue’, as it has been deemed by the rotating Portuguese presidency, did not settle all the issues on the table, negotiators considered it a step in the right direction. For a summary of all of the main issues on the menu at the super-trilogue, see here.

'Jumbo' trilogue - After the super-trilogue, negotiators convened a ‘jumbo trilogue’, in the words of the EU’s agriculture commissioner Janusz Wojciechowski, set to play out on 25-26 May. This was widely expected to be crunch time for the CAP reform, but failed to yield a result as positions were too far apart. 

Talks mainly collapsed on the ring-fencing of the so-called eco-schemes with the introduction of a 'floor' at 18% with full flexibility to transfer unused funds above the floor to other payments. This was widely seen as a provocation from ministers. Meanwhile, ministers also criticised the Parliament's tactics. This ultimately saw a breakdown of talks. 

Final trilogue - After May talks collapsed, negotiators reconvened on 25 June for a final stab at sealing a deal. This resulted in a successful provisional agreement being reached, sealing the fate of the bloc’s farming subsidy programme for the 2023-2027 period and bringing an end to long and tense negotiations between the European Parliament, the EU Council and the Commission.

This deal has been accepted by the Council, but awaits approval by the Parliament, expected during the September plenary session. 

 

Outstanding issues

New green architecture - This is centred around increasing the environmental performance of the CAP. The main issue will be ensuring complementarity between the new architecture and the environmental-climate measures of the EU set out in the F2F. 

Conditionality - Conditionality is part of the greening architecture and will replace the greening payment requirements of the previous programme. Agreeing on a control system and penalties in relation to conditionality will be crucial, as well as establishing derogation on certain categories.

Social conditionality - As well as environmental conditionality, there is also an issue related to social conditionality, whereby CAP subsidies would be conditional upon farmers’ upholding working and employment standards. Social conditionality is one of the Parliament’s red lines in these talks, who voted through amendments supporting this back in October 2020, but lacks support among agricultural ministers, who say that this is "outside the remit of the CAP", adding concerns that this may create added red tape for farmers. Amid the controversy, the Portuguese Presidency has set out options for the inclusion of social conditionality in the CAP.

Eco-schemes - This innovative system is particularly important in delivering environmental goals, but an excessive or insufficient uptake of eco-scheme by farmers could result in a loss of funds. Their mandatory or voluntary nature is yet to be decided.

Ring-fencing of eco-schemes - Namely the percentage of direct payments budget that will be earmarked for environmental-friendly agricultural practices. The Portuguese presidency recently filed a final proposal on this matter, but MEPs are yet to be convinced

Crisis reserve and other exceptional measures - After the COVID-crisis, there is a high likelihood that an improved mechanism to deal with extraordinary market crises could be introduced, but positions of the European Parliament and EU farm ministers on the issue remain far apart

Definitions are also set to be a crucial issue. Definitions for what constitutes genuine farmers, young farmers, permanent grassland and permanent pasture, eligible hectare and arable land are all as yet undefined, but these will provide the basis for eligibility for measures, as well as categories exempted from conditionality or eligible for training/skills.

Wine varieties - You may not know it, but there are seven varieties of grapes that are forbidden in Europe, known as American grapes: Vitis Labrusca, Noah, Othello, Isabell, Jacquez, Clinton and Herbemont. The next CAP will decide whether to open the market to these grape varieties, as well as enforcing stricter rules on wine labelling

Good agricultural and environmental conditions (GAEC) numbers 9 and 10, on the maintenance of non-productive features and permanent grassland

Budget

The farming budget for 2021-2027 will amount to €344 billion, roughly €20 billion more than what the EU executive earmarked in its proposal in July 2018, although significantly lower than the 2014-2020 CAP budget which totalled €383 billion, even without the UK contribution.

The agreed budget allocation for direct payments to farmers and market-related expenditures, which together form the first CAP pillar, is now €258.6 billion.

The rural development support, considered as the CAP’s second pillar, was put at €78 billion with an extra €7.5 billion coming from the ‘Next Generation EU’ stimulus plan (NGEU), for a grand total of €85.5 billion.

The €7.5 billion top-up coming to the EU’s farming subsidies programme from the bloc’s post-COVID stimulus plan should be made available as quickly as possible, according to the Agriculture Commissioner Janusz Wojciechowski.

More info on the CAP budget deal are available at this link.

National strategic plans

A core aim of the European Commission is to delegate more responsibility to member states in planning CAP investments and policies.

This means that member states will now be directly responsible for CAP – its design, implementation and evaluation – allowing for a more flexible and targeted approach to the CAP.

Through these plans, countries will set out how they intend to meet the 9 EU-wide objectives using CAP instruments while responding to the specific needs of their farmers and rural communities.

In this way, the Commission aims to simplify and modernise the CAP, shifting the emphasis from compliance and rules towards results and performance.

The process of developing a strategic plan begins with two steps.

First, a SWOT analysis (an evaluation of the strengths, weaknesses, opportunities, and threats) must be prepared based on an assessment and prioritisation of needs. These are obliged to involve feedback from stakeholders through various mechanisms.

Second, an ex-ante evaluator must be chosen who is required to appraise the assessment of needs, including the procedures used to involve stakeholders.

Member states are currently undergoing this process, and are set to forward draft strategic plans to Brussels by the end of 2020. These plans are then due to be presented during 2021 and will, in principle, be implemented from 2022 onwards.

Transitional period

As the CAP reform will not be concluded before the start of the 2021-2027 programming period, MEPs and member states "informally developed a common understanding" on interim measures based on the current rules, in order to avoid EU farmers being financially exposed.

Although provisional, the compromise reached at the end of June involves all the essential aspects of the transitional CAP file. As a consequence of the deal, the coming into force of the post-2020 CAP was pushed back to 2023.

But the agreement reached on a two-year temporary scheme before the next EU farming subsidies programme starts was criticised by the EU executive. The Commission believes that a one-year Common Agricultural Policy (CAP) transition period would fit better in the context of F2F implementation and ‘Next Generation EU’, the Commission’s €750 billion Recovery Fund aimed at reviving and transforming the bloc’s economy.

The Commission was not willing to concede on this matter, threatening to withdraw the proposal as a last resort weapon, which MEPs took as a threat to their lawmaking independence.

However, after weeks of tensions, Agriculture Commissioner Wojciechowski sought to defuse the tensions for the first time, keeping the Commission’s window open to new arguments. “The early use of the recovery fund may really cast some new light on this issue and maybe it will make the compromise easier,” he said.

In March, the European Court of Auditors (ECA) warned about the risk of a long transitional period as it may delay the Commission’s ambition to make the farming sector more environmentally sustainable.

Timeline

21 July 2020 - EU leaders agreed on the Multiannual Financial Framework (MFF), which includes the total amount of CAP spending too.

30 August-1 September 2020 - Informal Agrifish Council in Koblenz organised by the German rotating presidency.

2 September 2020 - First European Parliament's Agriculture Committee after the summer break

19-20 October - German presidency reached a final position on CAP during October's Agrifish Council

19-22 October - MEPs also had their final plenary vote on Parliament's CAP negotiating positions and adopted the European Parliament's position on the Common Agricultural Policy (CAP) reform.

November 10 - Trilogue on post-2020 CAP started.

22-23 March After a 4-month deadlock, the Portuguese presidency called a joint negotiation meeting - the super trilogue - with all three rapporteurs in the European parliament to seek a breakthrough in Common Agricultural Policy (CAP) talks

25-26 May The CAP negotiators will try to strike a final deal in a so-called jumbo trilogue. In parallel with the trilogue, there will be an official gathering of EU-27 agriculture ministers (26-27 May)

Provisional agreement

Strategic Plans

Eco-scheme ring-fencing: The compromise fixes eco-scheme ring-fencing at 25% for the whole period, with an initial two-year learning period and a “floor” mechanism set at 20% – a slight movement compared to the last round of talks which saw the Council pushing for an 18% “floor”.

The “floor” allows the spending of unused funds between 20% and 25% of the eco-schemes, although the overall amount of unused funds below the floor needs to be compensated by the end of the programming period through some compensation mechanisms.

There will be also some “rebates”, meaning that member states that spend more than 30% of the rural development programme – the CAP’s second pillar – for agri-environmental practices can get up to 50% reduction on money spent for eco-schemes.

Rural development ring-fencing: The green spending in the second pillar is pegged at 35% of the total budget for rural development.

Green Deal alignment: While MEPs did get the coveted reference to the Green Deal targets, this came only in the form of a recital of the Strategic Plans Regulation, rather than an article, leaving it on a much weaker footing.

The recital will read: “When assessing the proposed CAP Strategic Plans, as referred to in Article 106, the Commission should assess the consistency and contribution of the proposed CAP Strategic Plans to the Union’s environmental and climate legislation and commitments and, in particular, to the Union targets for 2030 set out in the Farm to Fork Strategy and the EU Biodiversity Strategy.”

Social dimension: Member states will start implementation of this new social conditionality voluntarily from 2023 and mandatorily from 2025.

There will be also a two-year ‘rendez-vous’ clause, with the Commission asked to monitor the impact of the mechanism on workers conditions and come up with a study and potentially with proposals to enhance the social dimension of the CAP including possibly enlarging in scope.

Internal Convergence: Compromise settling on 85% of average value by 2026 at the latest but will start from 2023 and progress each year to the 85%

Redistributive payments: These will be set at least 10% of direct payments, but will have exceptions for member states doing a redistribution in other ways, such as convergence.

Support for young farmers: New mandatory minimum level of 3% of national budgets for direct payments to young farmers (defined as farmers up to 40 years). This could finance complementary income support to young farmers (CISYF), start-up aid and investment support targeted at young farmers with a weighting factor of 50%.

Redistribution of income support: Member states will mandatorily redistribute at least 10% to the benefit of smaller farms, and must describe in their strategic plan how they plan to do this.

Horizontal Regulation and Common Market Organisation

Agricultural crisis reserve: The new fund will be introduced to fund market measures in times of crises, with an annual budget of at least €450 million. Funds can be paid out to farmers as of 2023.

International trade policy: A joint statement by the Council, the Parliament and the Commission on proactive engagement at a multilateral level for the achievement of the European Green deal has been attached.

This concerns the application of EU health and environmental standards to imported agricultural products.

“Given the importance of its market in international trade, the European Union can use its leverage capacity to raise health and environmental standards globally and thus contribute to achieving international environmental objectives such as those of the Paris Agreement,” the declaration reads.

The Commission is also invited to present by June 2022 at the latest a report assessing the rationale and legal feasibility of applying health and environmental standards to imported agricultural and agri-food products as well as identifying the concrete initiatives to ensure better consistency in their application, in compliance with WTO rules.

Import tolerances of pesticide: The infamous article 188a proposed by the Parliament has been replaced by a Commission’s declaration. This declaration says that the EU executive commits itself to ensure that, following a thorough assessment of the scientific information available for active substances and in conformity with WTO rules, import tolerances and Codex Maximum Residue Limits (CXLs) are assessed and reviewed for active substances that are not, or are no longer, approved in the EU, so that any residues in food or feed do not present any risk for consumers.

“The presentation by the Commission of the proposal for a legislative framework for sustainable food systems (check reference) will be a crucial additional step towards the full achievement of this ambition, in coherence with the Green Deal objectives,” reads a final addition obtained by the Parliament.

Sale of grapes for PDO/PGI wines: Recognised interbranch organisations operating in the wine sector may provide non-mandatory price guidance indicators concerning the sale of grapes for the production of PDO/PGI wines provided that such guidance does not eliminate competition in respect of a substantial proportion of the products in question.

Sugar as a product eligible for intervention: A joint statement from both lawmakers has been attached in which difficulties faced by the sugar sector after the abolition of the sugar quotas in October 2017 are recognised.

The current state of the sector and its adaptation strategies will be assessed thoroughly within the framework of a study to be delivered in autumn 2021. Lawmakers will consider any appropriate future policy developments in light of the key findings and conclusions made in the context of this study.

Such future policy developments could encompass any relevant regulatory and non-regulatory initiatives related to market and crisis management tools, market transparency in the sugar supply chain, contractual relations between growers and sugar producers, international trade and the evolution of the bioeconomy.

Background

The EU’s common agricultural policy, or 'CAP' as it's known, aims to support farmers and improve agricultural productivity, ensuring a stable supply of affordable food and that the EU's farmers are able to make a reasonable living while also safeguarding the environment.

The CAP has undergone a series of transformations over the years to meet changing economic circumstances and citizens’ requirements and needs.

Negotiations are currently underway on the future of the CAP post-2020, which is under pressure to provide answers to an increasing number of challenges, including climate change, biodiversity loss and soil degradation.

On 1 June 2018, the European Commission presented legislative proposals on the CAP beyond 2020.

These proposals aim to make the CAP more responsive to these current and future challenges while continuing to support European farmers for a sustainable and competitive agricultural sector.

The future CAP revolves around nine specific objectives reflecting its economic, environmental and socio-territorial multifunctionality. These include:

• supporting viable farm income and resilience across the Union to enhance food security
• enhancing market orientation and increasing competitiveness, including a greater focus on research, technology and digitalisation
• improving the farmers’ position in the value chain
• contributing to climate change mitigation and adaptation, as well as sustainable energy
• fostering sustainable development and efficient management of natural resources such as water, soil and air
• contributing to the protection of biodiversity, enhancing ecosystem services and preserve habitats and landscapes
• attracting young farmers and facilitate business development in rural areas
• promoting employment, growth, social inclusion and local development in rural areas, including bio-economy and sustainable forestry
• improving the response of EU agriculture to societal demands on food and health, including safe, nutritious and sustainable food, food waste, as well as animal welfare

The CAP achieves this via:

• Income support through direct payments. This is designed to ensure income stability and remunerate farmers for environmentally friendly farming and delivering public goods not normally paid for by the markets, such as taking care of the countryside
• Market measures to deal with difficult market situations such as a sudden drop in demand due to a health scare, or a fall in prices as a result of a temporary oversupply on the market
• Rural development measures with national and regional programmes to address the specific needs and challenges facing rural areas

The CAP is organised into two pillars.

Pillar 1 addresses farm income support and market management and is completely financed through the EU budget by the European agricultural guarantee fund.

Pillar 2 addresses rural development including agri-environment-climate measures and is co-financed jointly by the EU budget through the European Agricultural Fund for Rural Development and by member states. 

See here to learn more about common concerns related to the CAP.