22-11-2013 03:44 AM | Arable, Cereal, Crops, Finance, News

EU approves first reform of farm policy



EU approves first reform of farm policy
A deal with the Council on five legislative acts reforming EU farm policy has been endorsed by Parliament.

The post-2013 Common agricultural policy (CAP) will put more emphasis on environmental protection, ensure fairer distribution of EU funds and help farmers to cope better with market challenges.

“The first ever reform of the EU farm policy decided jointly by ministers and directly-elected MEPs, has just been given its final shape. During this long and challenging journey, Parliament made major improvements. The new CAP will strike a better balance between food security and environmental protection, better prepare farmers to face future challenges and be fairer and more legitimate,” said Agriculture Committee chair and lead negotiator Paolo De Castro (S&D, IT).

To ensure that direct payments go only to active farmers, MEPs persuaded Council to draw up a blacklist of entities, such as airports or sports clubs, to be automatically excluded from EU funding unless they prove that farming contributes a substantial share of their income.


Parliament also insisted on a mandatory EU-wide scheme to give young farmers an extra 25% in top-up payments for their first 25 to 90 hectares. Small farmers could also get more money, whereas large farms receiving more than €150,000 will see their payments above that level cut by at least 5%.

"In addition to shifting some money from big to young and small farmers, we ensured better distribution of EU funds across the EU. By 2020 farmers from different member states should receive at least 72% of the EU average direct payment”, said Luis Manuel Capoulas Santos (S&D, PT), rapporteur for direct payments and rural development regulations.

Under the new CAP, 30% of member states' budgets for direct payments may be spent only if mandatory greening measures, such as crop diversification, maintaining permanent grassland and creating "ecologically-focused areas", are carried out.

"Double funding", i.e. paying farmers twice for delivering the same set of environmental benefits, will not be allowed and farmers who fail to apply mandatory greening measures will face additional penalties on top of losing their “greening” subsidies, which will be phased in during the first four years of the new CAP. "It is a matter of fairness to give farmers more time to familiarise themselves with the new rules. No penalties will be imposed in the first two years of the new CAP and only then will the share of so-called green payments withheld gradually rise to a maximum of 25%", said Giovanni La Via (EPP, IT), rapporteur for the financing, management and monitoring regulation.

“With new tools to keep and promote rural economies, increased environmental protection and no double funding, public money will be better used to deliver public goods for everyone”, said Mr Capoulas Santos

Parliament also ensured that farmers' organisations will be given additional tools to help farmers cope with market volatility and strengthen their price bargaining position. "For instance, the scope of sectors in which farmers' organisations may negotiate supply contracts on behalf of their members without breaching competition rules will be widened. Stronger producer organisations must not turn into cartels but should help farmers to improve their economic situation,” said Michel Dantin (EPP, FR), rapporteur for the common market organisation regulation.

The CAP reform process, launched in Parliament in 2010, reached its final stage in June 2013 when negotiators for Parliament, the Council and the Commission reached a political agreement on the major issues. .

The final plenary vote comes after another round of negotiations in which the remaining issues have been resolved. The voted package includes four regulations on 2015-2020 EU farm policy and a regulation setting transitional rules for 2014. Read more in the background note (link to the right).

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