Farm Ireland
Independent.ie

Friday 19 April 2019

Alan Matthews: CAP reform negotiations bogged down in uncertainty

A transition period may be needed for current CAP as officials struggle to hammer out a new deal

Prof Alan Matthews
Prof Alan Matthews

Alan Matthews

All attention last week was focused on the Brexit agenda, and rightly so, for there is much at stake, both for Ireland and the EU.

But for the Irish agri-food sector, decisions taken on the shape of the EU’s Common Agricultural Policy after 2020 can be just as important.

We should thus not lose sight of the way the debate is going in Brussels on the next CAP. Discussions last week on the CAP reform file in the two co-legislatures, the AGRIFISH Council and the AGRI Committee in the European Parliament, gave some insights into the current state of play. At this stage, both institutions are quite far from reaching agreement on their own positions, a necessary step before they can enter trilogue negotiations to agree the final Regulations.

In the Parliament’s AGRI Committee around 8,000 amendments were suggested to the three CAP Regulations. These are the Strategic Plan regulation which introduces the new delivery model for the CAP and a new performance framework whereby the Commission can hold Member States to account; a Horizontal Regulation setting down the rules for financing, management and monitoring of the CAP; and an amending regulation to the Common Market Organisation (CMO) regulation on the management of agricultural markets.

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The rapporteurs responsible for drafting the Committee’s opinion and the shadow rapporteurs from the different political groupings in the Parliament have been working to reduce these amendments to a smaller number of compromise amendments, but this work was not completed as of the beginning of last week.

Nonetheless, the Committee plans to hold votes on these compromise amendments in the first two weeks of April. But this will not allow enough time for the Parliament in plenary session to hold a vote on the Committee’s opinion before elections take place to the European Parliament in May.

It will be up to the newly-elected Parliament to take up the file and to negotiate the outcome with the AGRIFISH Council.

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As the political composition of the new Parliament may be quite different to the current one, and there will be a significant turnover in AGRI Committee membership, a big question is whether the new Parliament will want to continue based on the amendments suggested by the current Committee or will want to start over again.

A complicating factor is that the Parliament’s Environment (ENVI) Committee has associated status with the AGRI Committee on the agri-environment provisions in the Strategic Plan regulation. The ENVI Committee in its opinion proposes to strengthen the environmental ambition of the new CAP, for example by ring-fencing 40pc of Pillar 2 money and 30pc of Pillar 1 money for agri-environment purposes. These proposals go well beyond what the AGRI Committee will likely support, and it will be up to the whole Parliament to make the final decision.

The AGRIFISH Council makes progress based on compromise texts suggested by the Presidency which is currently held by Romania. Discussions on the CMO regulation have largely focused on the wine sector and are quite far advanced. The Council position is likely to be much more cautious than the Parliament’s position where there is support for including a more interventionist approach to market management based on supply controls in the event of market crises.

When it comes to the Strategic Plan regulation, the Presidency has circulated compromise texts on only some of the contentious issues. In particular, the Council has yet to address the proposed new green architecture in the CAP and the level of environmental and climate ambition that it will support. This will be the topic of the next AGRIFISH Council meeting in April.

Characteristic for many of the Presidency amendments discussed last week is that they would make many measures that were obligatory in the Commission proposal voluntary for Member States.

So in drawing up their Strategic Plans, adopting a definition of genuine farmer would be voluntary; requiring young farmers who benefit from EU assistance to have appropriate skills and training would be voluntary; whether to introduce stricter capping and to include deduction of labour costs would be voluntary, and whether to have a redistributive payment in favour of smaller farms would be voluntary.

These texts have not yet been agreed by the Council but if they were, they would drive the CAP in an even more a la carte direction. In the AGRI Committee, one of the main concerns with the Commission proposal has been that the additional flexibility given to Member States under the new delivery model and performance framework will undermine the common nature of the CAP. If the Committee sticks to this line when it determines its final position, the stage will be set for some interesting confrontations.

The final source of uncertainty in all these negotiations is of course the budget for the CAP. Under the current timetable, the earliest this will be agreed will be in the autumn of this year but this deadline could slip for many reasons.

Commissioner Hogan has urged the Council and Parliament to come to an agreed position on a CAP with a high level of environmental and climate ambition as the best way to strengthen the case for an increased CAP budget in the MFF negotiations.

 Many Member States and MEPs, however, are reluctant to commit to a future CAP architecture until they know what money will be made available for the CAP.

At this stage, all we can say for certain is that uncertainty continues. Although the Department continues its preparations to develop the Irish CAP Strategic Plan for the period post 2020 by the end of this year, the possibility that a transition period will be needed to roll over the current CAP for a further couple of years cannot be excluded.

Alan Matthews is Professor Emeritus of European Agricultural Policy at Trinity College Dublin

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