‘Evolution, not revolution’: that’s the tune the Commission was playing on repeat right up until, and even (incredibly) after, the announcement of the proposal which will form the basis for the future of the EU’s CAP.
But in the end it’s more like some kind of Great Merging mutation event with genes jumping from all across the policy pool.
We’ve battled through the chaos of this new CAP proposal to bring you some of the major takeaways from the plans.
1. Mega MF(F)-ing Fund
After months of speculation, it’s now official: the plan is to merge agricultural and rural support into one mega-fund, pooled into a single financial instrument, the €865 billion ‘National and Regional Partnerships’ fund, under the wider ‘European Fund for economic, social and territorial cohesion, agriculture and rural, fisheries and maritime’. This puts the CAP under the same budgetary umbrella as cohesion funds, migration policies, and infrastructure financing.
This single fund structure, the Commission argues, will create a “simpler and more flexible policy framework that enhances synergies and complementarities across sectors”, streamlining administrative procedures. But crucially it also means that member states will have full power over transferring funds as and when they see fit.
While the budget for income support for farmers is secured (‘ringfenced’ in Brussels speak), the second pillar is gone, with agro-environmental and climate measures and rural funding mostly lumped in with the rest into the mega-fund.
This leaves these priorities competing for funds and political attention within a much broader framework and vulnerable to be buffeted by the changing political winds which — let’s be honest — don’t look likely to abate in the coming years.
The idea is that member states will submit a plan for how they intend to spend their portion of this NRP fund, which must be shown to fulfil certain criteria to be approved by the Commission (now where have we heard that before?).
As we learned from the previous CAP reform, the plan also carries a risk of concentrating and centralising power in the hands of national governments and the Commission, leaving question marks over how much will regions and rural areas get a look-in.
2. Back to the future
It seems the Commission has gotten the memo that the 90s are back in fashion, with the CAP essentially back to the income-support heavy, one-pillar model of the past.
Out of the €300 billion on the table, most is earmarked for income support, as well as market measures, a crisis fund, support for young farmers, and so-called “off-farm investments”, which could include things like rural infrastructure, such as roads. You could think of this as a Pillar 1+, wider than the previous first pillar but not as wide as the previous CAP.
But the good news to many is that this income support will be “degressive area-based payments” — essentially, payments that decrease as farm size increases — a longstanding demand from both NGOs, small farmers associations and, more recently, EU young farmers to more fairly distribute CAP payments.
For direct payments, the support ranges from a minimum of €130 to a maximum of €240 per hectare, with guidance for targeting, including a focus on ‘active’ farmers (brace for battle here over this definition), and priority groups like young or new entrants, women, small/family farms, mixed farms, and those in disadvantaged areas.
All payments will be capped at €100,000 per farmer, per year (a battle is brewing here too).
3. Schrödinger’s cut
In the lesser-known Schrödinger’s cut, the CAP budget is somehow simultaneously cut and not cut. Confused? Welcome to the CAP club.
The Commission is pushing hard on the line that there have been no cuts to the budget, with Agriculture Commissioner Hansen telling journalists he “sees no cuts at all”. But that’s not necessarily what we’re seeing (and we’re not the only ones).
The only thing we can say with any certainty is that the part of the budget *absolutely guaranteed* to farmers is a €300 billion pocket of money within the wider National Regional Partnerships Fund.
And whatever way you try to swing it, this is a decrease of 20% at face value (closer to 30% if you factor in inflation) when we compare this with the amount of dedicated funding to farmers in the last CAP, which offered dedicated combined agricultural and rural funding of €386.6 billion (see below).
The idea is that member states will fill this 20% funding gap using the flexibilities in the wider NRP fund which, according to the Commission, they would be obliged to fill (the proposal says the national contribution rate “shall” be no lower than 20%). Hypothetically, if they chose to do so, they could even go over and above this 20%, but wishful thinking is unlikely to be enough to win farmers over.
Even if “shall” in legal terms is an obligation, it only really has any weight if there’s an enforcement mechanism to hold them accountable – otherwise, strategically speaking, the EU is washing its hands of the responsibility to plug this funding gap.
4. The big C’s
This proposal weakens two of the CAP’s core pillars: Commonality and Conditionality.
First, the move toward national plans shifts significant decision-making power to the 27 Member States, further eroding what little “common” remains in the Common Agricultural Policy.
The result? A 27-speed CAP with a patchwork of national priorities and Brussels in the back seat.
So much so that the move has left some stakeholders, including farmers and voices in the European Parliament’s agriculture committee, openly questioning whether it’s time for a rebrand – from Common Agricultural Policy to National Agricultural Policy.
Conditionality, once the backbone of linking payments to good environmental and farming practices, has been further watered down. Instead there is a new ‘farm stewardship’ framework with “minimum environmental and social conditionality requirements,” as well as protective practices designed by member states to deliver on key objectives such as “protection of soils and river courses from pollution”.
The principle of ‘Do No Significant Harm’ will be considered fulfilled as long as farmers comply with these national farm stewardship rules.
With that in mind, you could say a third ‘C’ has been left out in the cold: Climate. Without robust environmental and climate performance indicators and with climate action rolled into this mega-fund, this may well be the first CAP reform to buck the trend and actually go backwards on green goals.
What now?
This starting point for talks has gone down like a sack of manure with agri stakeholders, not least of which farmers, who took to the streets on the day of its unveiling and have made it clear they’re ready to prepare the pitchforks for more protests.
But one thing to remember is that this proposal still has to pass the scrutiny of both lawmakers in the Council and the Parliament, which is a process that takes years, so this is just the beginning of what promises to be a lot of fun to come.
There is a lot to digest in the plans and plenty more to unpack about what these changes will really mean on the ground, and currently a lot of confusion about what all this really means.
From funding mechanisms to enforcement gaps, environmental ambition to social safeguards, the devils are well and truly in the details – and rest assured ARC2020 will be digging into them in the coming months to break down exactly what’s at stake for farmers, citizens, and the future of food and farming in Europe.
In the meantime, if you want to dig deeper, Alan Matthews is (as usual!) a treasure trove of knowledge, with not one but two blog posts on how this new CAP will sit in the EU budget and the politics of which countries stand to win or lose out with the national regional plans.
This article is produced in cooperation with the Heinrich Böll Stiftung European Union.
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