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30th Sep 2022

Brussels fires first shot in overhaul of EU farm policy

  • EU farm policy currently accounts for about 40 percent of the bloc's budget (Photo: Commission)

The European Commission on Wednesday published keenly awaited proposals to overhaul its farm policy from 2014, capping payments to single farms and obliging the EU's 12 million landowners to become greener.

Under the draft legislation, which runs to around 1000 pages, 30 percent of the direct payments will be dependent on the farmer growing at least three crops and putting aside seven percent of farmland for “ecological purposes.”

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The commission has also attempted to narrow the glaring discrepancy between the subsidies that farmers in the west are paid and the aid given to farmers in the poorer eastern states that joined the EU in 2004.

The Netherlands - with a reduction of seven percent by 2020 - is set lose the most from the redistribution, followed by Belgium and Italy. However, farmers in the three Baltic States will see their subsidised incomes rise significantly over the same period.

In Latvia, currently at the bottom of the pay-out list, farmers could see the payments per hectare go from around €87 in 2013 to €140 in 2020, a rise of over 62 percent.

In addition, from 2019, pay-outs will no longer be permitted to be linked to production but will based on the number of hectares owned by a farmer.

In attempt to prevent land speculation - countries like Ireland were already panicking about landowners rushing to take rented land back from tenants - the reference year for land ownership will be 2014, but pay-out per hectare will be linked to what a farmer received in benefits in 2011.

Another significant change will see payment per year to a single farm capped at €300,000, with the EU's farm policy shown to have spawned a series of CAP millionaires, and not always for their farming prowess - but still they can earn over and above that by being "innovative".

There is also an attempt to end the notorious incidence of airports and golf-courses claiming Common Agricultural Policy money, which currently accounts for 40 percent of the EU budget at 55bn a year.

In future, only “active farmers” will be allowed to claim CAP money – with a suggested definition that payouts have to represent at least 5 percent of total earnings.

EU farm commissioner Dacian Ciolos called the proposals a “new partnership” between Europe and its 12 million landowners.

Wednesday’s proposals are simply the first shot in a process that will likely only wrap up in 2013 and first reactions reflected this.

Farmers associations cried foul at the obligation to rotate crops and the linking of almost a third of payments to green measures, while Green NGOs said they did not go far enough.

Ireland and the UK, which are poles apart on their views of the farm policy, were both critical in their own way.

Irish farm minister Simon Coveney said he was "not happy" with parts of the proposal, stressing the need to retain funding for Irish farmers. The priority for me is to retain Irish agriculture funding,”

"Overall, we’re disappointed and the proposals as they stand could actually take us backwards," said UK environment secretary Caroline Spelman, with London favouring a more streamlined policy.

The negotiations on the multiannual budget for the same 2014-2020 period, where it has been proposed to spend €371.7 billion on CAP, will run parallel to the farm funding talks. Only when this figure has been fixed will the final figures become clear.

Negotiations on the farm budget are notoriously cantankerous, but in the past were limited to the approval of member states. This time round however, the European Parliament has full say and has already indicated it will make full use of its co-decision powers.

MEPs warn Barroso against slashing EU farm budget

MEPs have said they do not support a large-scale reduction in funding for rural development schemes, amid reports that the European Commission may aim to make savings in this area in next week's highly-anticipated multi-annual budget proposals.

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