EU Farm Policy: Commission Reform Proposals Spark Mixed Response

12 October 2011

Plans to reform the EU's multi-billion euro Common Agricultural Policy met with a mixed response from parliamentarians, farm groups, and civil society organisations on Wednesday 12 October, as the European Commission formally unveiled its proposals for agriculture in the post-2013 period - one month after drafts were leaked online (see Bridges Weekly, 14 September 2011).

Agriculture Commissioner Dacian Cioloş told the European Parliament's committee on Agriculture and Rural Development that the bloc's new farm policy needed to be simplified so it could deliver on a range of policy objectives. These include making agriculture more competitive, protecting the environment, and supporting ‘harmonious' rural development across EU territory.

"The European Commission is proposing a new partnership between Europe and its farmers in order to meet the challenges of food security, sustainable use of natural resources and growth," Cioloş said in a statement. "The next decades will be crucial for laying the foundations of a strong agricultural sector that can cope with climate change and international competition while meeting the expectations of the citizen."

Over the years, the EU Common Agricultural Policy has been widely criticised by taxpayers, consumer groups, aid agencies, and environmentalists, who argue that it wastes scarce resources, harms developing country farmers, and damages the natural environment. The criticisms prompted a series of reforms that have slashed ‘coupled' subsidies linked to farm output in favour of ‘decoupled' income support, in the form of direct payments. The latter type of payment is considered to be less trade-distorting.

A report released in Brussels last week by the Organisation for Economic Co-operation and Development (OECD) noted that, over the 2008-10 period, farmers earned only 22 percent of their total annual receipts from government support - down from 39 percent annually in the 1986-88 period. The EU now had a unique opportunity to reform farm support, the OECD argued.

The Commission has said it now wants to ensure that these decoupled payments are more closely tied to the delivery of ‘public goods' that the market alone will not provide - such as protecting high-value ecosystems, improving soil conservation, or safeguarding against climate change.

Europe's farm policy suffered from "a lack of credibility," Cioloş told parliamentarians on the committee. "I seriously doubt that airports or golf clubs need any support under the CAP," he added, pointing to some of the more egregious cases of poorly-targeted payments that might be avoided under new rules limiting support to ‘active farmers'.

Parliamentarians: wary response

Parliamentarian Albert Dess, representing the centre-right European People's Party, told the committee that his group was concerned that the new proposals would introduce more red tape and bureaucracy for farmers to deal with, without necessarily delivering environmental improvements. He nonetheless welcomed the emphasis on agricultural innovation in the Commission's proposals.

Meanwhile, Socialist parliamentarian Luis Capoulas Santos said he welcomed the focus on the environment, while arguing that this needed to be matched with an "adequate" budget. Noting that the Queen of England continued to receive large sums of money under current CAP arrangements, he argued that "we need to make sure that we get the eligibility criteria absolutely right."

A more critical response came from Liberal parliamentarian George Lyon, who told the committee that the proposals were "nothing more than greenwash." He argued that a more comprehensive, more sustainable agricultural policy was needed to tackle new challenges such as climate change, but that on these grounds the Commission's proposed package "falls dreadfully short."

Green MEP Martin Häusling said that the proposals were a step in the right direction, but needed to go further. He argued that the Commission had missed an opportunity for more far-reaching reforms that would have tied agriculture more closely to environmental goals.

Responding to parliamentarians' comments about bureaucracy, Cioloş cautioned that the Commission would not be able to justify providing farm subsidies without any criteria. However, he stressed that new proposals sought to simplify the paperwork and red tape farmers will have to deal with.

Farm groups, civil society, criticise Commission plans

The plans have elicited a strong response from both farm groups and civil society organisations, on a range of topics.

COPA-COGECA, the EU's main farm union body, criticised the plans in a statement. "We are concerned that the Commission's proposals, which propose further mandatory environmental constraints on farmers, will not achieve this and will just add more costly burdens onto EU farmers," said COPA President Gerd Sonnleitner.

A forthcoming study by Alan Matthews of Trinity College Dublin finds that greening measures in the Commission's proposals could lower the bloc's agricultural production potential by raising farm input costs by €5 billion, or around 2 percent. The study was commissioned by ICTSD, the publisher of Bridges Weekly.

Environmental groups have also expressed disappointment with the Commission's proposals. Ariel Brunner, head of EU policy at BirdLife Europe, argued that the proposal includes "a few glimmers of light," such as protection of grasslands and introduction of farm level environmental focus areas. However, he said that these are "overshadowed by continuation of production subsidies for harmful production, and the possibility for Member States to shift money away from targeted environmental spending toward blunt income support."

Development agencies were also sceptical of the plans. Olivier Consolo, Director of CONCORD, the European confederation of development NGOs, observed that "until now in the debates on the reform process, all EU institutions have made reference to take into account the principle that the CAP must seek to reduce its overseas impact through greater Policy Coherence for Development. Yet the Commission has not translated this into concrete measures in its proposals."

Jack Thurston, co-founder of transparency campaign, told Bridges that the proposals were "a missed opportunity." The Commission's plans would leave EU agricultural policy as "principally a subsidy system for those that own farm land," Thurston argued, "rather than the modern, flexible policy for sustainable land management and food production that Europe desperately needs."

ICTSD reporting.

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