Big divisions opening on the future of CAP

The European Commission in Brussels
The European Commission in Brussels

Sarah Collins

EU governments are struggling to agree on the future direction of the Common Agricultural Policy, with eastern countries pitted against west, and rich against poor.

The divisions come in the wake of a Commission ideas paper warning that the CAP budget could face cuts of up to 30pc post-2020 in a worst case scenario.

Given Brexit and the need to fund new priorities such as defence and research, EU countries will either have to cough up more money or make swingeing cuts to the budget.

But CAP is also undergoing a separate overhaul to make it "greener, simpler and more results-driven", following criticism that it's overly complex and inefficient.

A Commission paper published last year suggested giving national authorities more flexibility to decide how to spend their CAP allowances, with the focus on concrete results rather than compliance with the rules.

The most recent CAP reform was agreed only five years ago, in 2013, where direct payments for climate-friendly measures were introduced.

It follows two successive reforms designed to 'decouple' subsidies from specific products or sectors.

The two fault lines in the current CAP debate are an aim to get "external convergence" of direct payments (to even out payment to different countries) and whether to continue "voluntary coupled support", where subsidies can be linked to certain sectors or products.

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Lithuania, Latvia, Estonia and Poland are pushing for full external convergence, though budget hawks such as the Netherlands, Denmark and Sweden are unwilling to pay for it.

Another bloc of countries, led by the Czech Republic, is focusing its efforts on coupled support, despite massive German opposition to the practice.

Ireland is fairly neutral on both points. Irish farmers get close to the EU average per hectare payments (which stood at €266 in 2015), while only a very few use coupled support.


According to the European Commission, average direct payments are highest in Malta, Greece and the Netherlands, and lowest in Latvia, Lithuania and Estonia. Voluntary coupled support is highest in Malta, Portugal, Finland and Belgium.

The European Court of Auditors, in its opinion on the future of CAP, calls for specific, measurable targets in future, particularly for greening payments.

João Figueiredo, the auditor responsible for the paper, says money currently goes "where it is likely to be fully spent" rather than were it is needed.

He added that current policy "reflects a culture of spending rather than a culture of performance".

The Commission will make legal proposals on the future EU budget and on the CAP reform in May.

Mercosur deal stalled

Progress on a trade deal with the South American Mercosur bloc seems to have stalled. EU sources say the window for a deal has

been extended from March until May.

The latest round of talks between negotiators wound up earlier this month, with little progress on market access for the most sensitive agricultural and industrial products.

Mercosur is still reluctant to ease terms for imported EU cars and dairy products, while the EU is unwilling to give way on beef and ethanol quotas.

And the ongoing Brazilian beef scandal has not helped matters.

“The most likely thing to save us from Mercosur is Mercosur itself,” said one EU diplomat.

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