How much greening will the greening of direct payments actually bring? Jean Christophe Bureau (AgroParisTech & INRA) Parma, 7th June 2013 1
Background October 2011 : Commision legal proposal Since that t several declarations/decisions i i address greening: Commission Greening concept paper (May 2012) includes greening equivalences Informal position of agriculture Council, Cyprus presidency (Dec 2012) Vote of the Committee for agriculture & rural development (COMAGRI), European Parliament (24 jan 2013), European Council il(heads of States) t (Feb 8 2013) Plenary vote, European Parliament (March 13 2013) Council (ministers) position (March 19 2013) Other noteworthy issues: Potocnik some of the more negative impacts on the environment of the Council s CAP negotiating mandate should be reversed (April 20) NGOs accuse Di Castro of ignoring the plenary vote of the EP and deceitfully promoting the provisions supported by the COMAGRI on greening (May 2013)
Commission s 2011 proposal p Pilar 1 Single Farm Payment would lead to : A basic payment, flatter and possibly regionalized, subject to simplified Standard Minimum Requirements (18 >13) and with modified Good Agricultural and Environmental Conditions (15 > 8, including climate change). g) Future integration of the water framework directive A Green payment (30% of envelope), subject to Diversification (3 crops if > 3ha arable land, > 5% area, <70%) Maintaining 95% permanent pasture (bizarre 2014 benchmark) Ecological Focus Areas (EFAs): 7% agricultural area (excluding permanent grassland) kept in conditions that are favorable to biodiversity, i.e. fallow, landscape features, buffer strips, terraces, etc. [note: partly fulfilled naturally and large number of farmers exempted]. Initial lidea : the basic payment would also be subject to the 3 requirements, hence a lever effect Other payments: py young farmers; «recoupled», natural handicap areas. 3
Commission s s 2011 proposal (cont d) Pilar 2: Organizational, managerial reorganization, through a strategic framework Specific focus on climate change and on organic farming, in addition to the Agri Environmental Schemes Several new measures (risk management instruments, support to producers organizations, innovation). 4
Commission s s 2011 proposal (cont d) In brief: The work done by NGOs, including with Commission s support (TWG3) to propose a major reorientation of direct payments towards public goods was largely ignored in the Commission proposal. The idea of public money for public goods d was dead dat birth Conditioning a huge sum of direct payments to greening is much less cost efficient than targeted measures (Mahé 2012) But there were signs of a genuine willingness to green the CAP: larger Pillar2 budgets proposed; cross compliance compliance Basic /Green, water directive as a condition for payments; ambitious EFAs, etc.. until the Council and Parliament got into it 5
Amendments: European Council Proposed a decrease in the CAP budget ( 373 bn 2014 2020 ) Heads of State got into CAP details 75% of funds on Pillar 1. Strong reduction in Pillar 2 ( 85 mds, i.e. 14% rather than 11% for CAP budget as a whole) Member States could transfer 15% between pillars (for some member states, up to 25%), in both ways. No obligation to match funds if transfers from P1 to P2 (disagreement with Parliament). Makes a «reversed modulation» possible Rejects proposals for biodiversity protection: On EFAs: «The requirement to have an ecological focus area on each agricultural holding will be implemented in ways that do not require the land in question to be taken out of production( ) 6
Amendements European Parliament COMAGRI : almost nothing left on greening. Technical wording that covered complete neutering of green provisions. Plenary : closer to the original Commission s proposals. Stress on avoiding double funding, leads to remove some flexibility (equivalences) proposed by COMAGRI and Council Still, weakening of the crop rotation constraints and EFAs (3%, > 5%,threshold 10ha). No cross compliance between Green and Basic; more farmers excluded from requirements Possibility transfer budgets : 15% P1 to P2, 10% P2 to P1 (countries must be below average). Green payments not used could be transferred to P2. Broader possibilities of recoupling (15% payments, almost on any crop). 7
Recent positions of agriculture Council Major weakening of the conditions for green payments: «flexibility» that remove a large share of the potential impact of the measure. Reduction of EFAs to 5% or surface rather than 7%. Threshold 15ha. National certifications could be judged by Member states as equivalent to the EFA requirement. EFAs: 5% with threshold at 15ha. Possibility of mutualization of EFAs. Crop diversification condition weakened (if >30ha, 75% max, 5% min for 3 crops). p) Mutualization of permanent pasture maintenance requirement, rather than individual constraint Recoupling payments : 12% of envelope Seems to endorse double funding under P1 and P2 for meeting essentially the same environmental requirements (like the COMAGRI and the Heads of States, but unlike the Parliament) Does not endorse the Parliament s safeguard that 25% of rural development budgets should ldbe reserved for agri environment i and related measures. 8
Is greening for real? The CAP is likely to be less green in the future, especially because of the Council amendments Some amendments are genuinely designed to make things more manageable, or more in line with the work already done under the GAECs (e.g. France wants the EFA to match its own «respect des particularités topographiques») But most amendments lead to the possibility of minimizing the impact of the Commission proposal Equivalence withnationalschemes: risk thatunrelated schemes (e.g. for energy saving) replace biodiversity oriented measures (like EFAs). Risk that lenient (e.g. France s Agriculture raisonnée ) oreven unchecked (e.g. France s Agriconfiance ) national voluntary schemes replace EFAs and crop rotation obligations 9
Is greening for real? (cont d) EFAs in practice: If small farmers exempted (60% of farmers in 13 Member states), farms with permanent pasture exempted, equivalent national schemes counted as EFAs andalready already 3% in EFA conditionin in practice. There would be no effect with a 3% requirement and probably very little with 5% Ag Council mandate dt : Bld Baldock k& Hart estimates t that t 80% farms would be eligible to green payments without doing anything In addition some green by definition and equivalence with the AES, not yet clarified, could weaken even further the requirements (Matthews 2013). (e.g. COMAGRI:themere enrollment in an AES sufficient to get the green payment. Plenary Parliament more restrictive). 10
Is greening for real? (cont d) P2 budgets can be seen as the end of an environmental ambition in rural development, and in particular the AES. Onlytwoofthesixpriorities of the deal withenvironment. Parliament s 25% budget for environment questioned Strong incentive to reduce agri environmental measures, due to competition with new objectives (risk stabilization, etc.), cofinancing and the idea that greening shifted to P1 Ability to move resources out of P2 to P1 tempting due to co financing (e.g. France with Article 68) Measures such as risk stabilization or capital investments could have a direct negative environmental effect. So do the COMAGRI & Council versions of recoupling) 11
Conclusion Most of the changes lead to a considerable weakening of the greening proposals. It is likely that there will be Less environmental condition on P1, due to more lenient SMR and possibly GAEC conditions, with more latitude left to member states The lever effect expected (conditioning basic payment to green payments conditions) will not happen The concept of «green by definition» and other equivalence measures weakens considerably the scope of the greening provisions. 80% of EU farms could benefit from green payments without changing anything (IEEP) and could be close to 100% if equivalence with AES retained Crop rotations measures: very limited impact. Permanent pasture : facing much stronger market forces with the high price of grains: «cerealization» of Europe under way 12
Conclusion: Is greening for real? No 13
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