CAP challenge by ECA

While Brexit continues to dominate the news agenda in Ireland and the UK, the issue that will have immediate and direct impact on farmers is the Common Agricultural Policy (CAP) that is in the process of being revised for the period from 2020 until 2027. Finalising the proposals – which were published in June this year – will not be complete until after the budget or multi-annual financial framework (MFF) is agreed which is expected before the EU elections in May 2019. After that there will be until the 1st of November for Commissioner Hogan to complete his plans for CAP after 2020 which looks exceptionally tight.

Budget

Farm organisations across the EU have been focused on the proposed cut to the CAP budget of 5%, and the debate internally on how the next CAP should be designed is still in the preliminary stages. That will be important because next time round the EU are inviting member states to design their own CAP within the EU CAP framework. There has been an argument that this will renationalise the CAP but this is rejected by the EU on the basis that each country’s proposals for delivering CAP have to be approved in advance by the Commission.

Challenge to CAP

Despite emphasis by the Commissioner that the post-2020 CAP would be particularly focused on the environment, with three of the nine core addressing the environmental issue, the proposals have been predictably criticised by the environment lobby in Brussels. While it may have been predictable that the environment lobby wouldn’t get enough to satisfy it from the proposals, it was more surprising to see the European Court of Auditors (ECA) publish such a hostile report on the CAP proposals last week. The ECA is a Luxembourg-based organisation whose job is to check that “EU funds are correctly raised, spent, achieve value for money and accounted for”. They don’t have legal powers but their report carries a certain weight as they are regarded as independent of the issues they investigate.

EU Court of Auditors

The ECA don’t like the fact that the post-2020 CAP will be similar to the current version and have an issue with the area-based direct payments to farmers which they say isn’t “the most efficient way of supporting viable income”. While they recognise the ambition for the CAP post-2020 to be ‘greener’, the ECA are critical of how achieving this will be assessed or measured and they are also critical of how eligibility for CAP payments will be defined. They are not keen on there being less checks and audits after 2020, with the move away from compliance inspections to performance and delivery of objectives that will be outlined in the delivery model.

Such a critical assessment will have come as a surprise to the creators of the 2020 CAP proposals. There is a strong belief in the Commission that while structurally these proposals aren’t suggesting dramatic change, they are an evolution of the present CAP intended to address the criticisms not least the need to simplify it. In that context, it is more like a mid-term review, and Hogan and his team emphasise that these proposals are very much bottoms-up models and only presented after an 18-month consultation process. The consultation was widely participated in and conducted in a multitude of ways both in Brussels and across the member states.

Hogan won’t be happy

The view in the Commission is that the ECA have either misunderstood or misinterpreted the CAP proposals in their report. Throughout the consultation process and again at the launch, the Agriculture Commissioner emphasised the need for CAP to do more for the environment but that farmers were the boots on the ground that would deliver EU environmental policies. He was also consistent in advocating for the need to fund farmers to farm in the way that EU citizens expect them to. By farming with EU constraints, EU farmers are far from being as productive as non-EU farmers who have access to hormones and a more relaxed approach on welfare and environmental policy.

Challenge for farm lobby

In terms of delivering support to farmers, there are few farmers anywhere in the EU who think that the direct CAP payment isn’t essential to run their business. In many cases, it is the only profit in the enterprise and without it, agricultural production would simply cease. Many family farms would be replaced by forests as is indeed the case in many eastern EU countries. The ECA don’t go any further than producing a report but it is and organisation that can shape opinion. We can expect the Commission to engage with them and challenge their findings, but it is more evidence that the farm lobby in Brussels has an ongoing fight to keep agriculture to the forefront of EU policy.