The European Parliament has officially given the green light to a reform of the Common Agricultural Policy (CAP) which, among its many aims, will be switching cash to small farms and rewarding sustainable farming methods.
“This new version of the policy aims to be greener, fairer, more flexible and transparent,” parliament said in a statement this week.
This is the biggest reform of EU farming subsidies in decades but before we get into the technicalities of this refreshed policy lets first discuss what it is.
1. What is the Common Agricultural Policy?
The EU’s Common Agricultural Policy, launched in 1962, is a partnership between agriculture and society – between Europe and its farmers.
It is a common policy for all EU countries that is managed and funded at a European level from the resources of the union’s budget.
The CAP aims to do a couple of things.
Supporting farmers and improving agricultural productivity, ensuring a stable supply of affordable food, safeguarding European Union farmers to make a reasonable living, helping tackle climate change and maintaining rural areas are just a couple of its main goals.
2. So, why did it need an update?
Well, the CAP has courted significant controversy over the years.
According to Management Study Guide (a certified education provider), the policy’s subsidies lower the price of some crops leading to market distortions and this is why the CAP has come under some severe criticism.
It has been criticised by developing countries in Africa and by small farmers within the EU.
It has even been describes as one of the most “regressive and ill-formed policies”.
The older version of the policy did not differentiate between small farmers and big farming corporations.Therefore, more money was given out to firms that had more hectare land under cultivation, further encouraging large corporations to buy out lands from small-time farmers.
On the one hand, they would generate more revenue since the size of their farm increases. On the other, their costs drastically decrease because of the economies of scale (cost advantages reaped by companies when production becomes efficient).
In fact, Dutch MEP Bas Eickhout said that 80% of the European money for agriculture goes to the 20% largest farmers.
The average farm size in Europe has consequently doubled, reflecting the disappearance of small farms.
Hence, the CAP came under heat for actually hurting small European farmers.
It was criticised for a couple of other things too – including disproportionate spending of tax on farmers, inflated prices and distortion of the market.
Farmers received a disproportionately high amount of taxpayers’ money from the EU budget, despite only representing less than 3% of the European population and generating less than 6% of the GDP of the region, according to Debating Europe.
This means that a lot of taxpayer’s money ended up in the pockets of big corporations.
These high taxes for EU citizens lead to inflation and that’s why the cost of food grains in Europe is much higher than the rest of the world.
On the other hand, all of this guarantees a pretty decent profit to anyone who produces crops – this then leads to overproduction, according to Management Study Guide.
Keep in mind, however, that these benefits are reaped by huge farming corporations – not small farmers like those that work in Malta.
MEPs ensured that member states will dedicate at least 10% of their direct payments to the redistributive income support tool, to increase payments received by smaller farms.
Other interventions like the payment for small farmers, internal convergence payments, the territorialisation of the basic income support, or the capping/regressive reductions will also be used to help meet the redistributive needs.
They also insisted that a crisis reserve with an annual budget of €450 million will be permanently ready to help farmers with price or market instability.
Member states may also apply up to 85% reductions for amounts exceeding €60,000, applicable to the basic income support received by a single farm.
States will also allow the subtraction of farm salary costs – including unpaid family work – from the amount of direct support to ensure that farm employment is not unduly affected.
Meanwhile, the per-hectare convergence will continue reducing differences in the level of direct payments within and between member states.
Countries that receive payments below 90% of the EU average will see an increase of their budget up to half the difference to 90% of this average.
This process is called external convergence and it will be complemented by internal convergence within member states to close the gaps: by 2026 all basic income support payments on a member state’s territory must have a per-hectare value of at least 85% of the national average.
There will also be policies to strengthen the position for farmers in the marketplace.
Regarding sustainability, there are a wide range of eco-schemes to cover climate change, the management of natural resources and biodiversity.
CAP will be implementing practices related to better nutrient management, agro-ecology, agro-forestry, carbon farming or animal welfare among many other,
Member states will also have to make eco-schemes available which cover at least two “areas of action” from a wide-ranging list laid down in the policy’s rules.
4. Some criticisms of the new Common Agriculture Policy
Despite the efforts to improve the policy, CAP still found itself scrutinised, this time however, by environmental activists and EU lawmakers.
According to DW, many EU lawmakers are arguing that the CAP doesn’t align with global climate goals and still goes against the interest of small farmers.
“This is a dark day for environmental policy and EU farmers,” said German politician and Member of the European Green Party Martin Häusling.
A week before the critical vote, Greta Thunberg also urged the EU to vote the CAP down.
The main argument is that the CAP reforms don’t align with the EU’s Green Deal which is a set of proposals unveiled by the European Commission in 2020, to ensure the bloc’s energy, transport, climate and taxation policies reduce net greenhouse gas emissions by at least 55% by 2030.
The aforementioned eco schemes specify that 22% of all CAP payments will cater to green farming from 2023-2024. This threshold will be raised to 25% from 2025-2027. A development that Sommer Ackerman, a 24-year-old farmer, called “laughable”.
“Currently, roughly one-third of the EU’s budget is being spent on accelerating destruction, making this just another deal on the list of the EU’s greenwashing projects. The intensive agricultural model is fueling the climate crisis by causing biodiversity loss, soil degradation, adding to water and air pollution and over extracting natural resources,” she told DW.
Another concern is the “social conditionality” aspect of the renewed policy.
German MEP Maria Noichl welcomed the funding scheme that aims to ensure that farmers who receive subsidies will be protected by Europe’s labour laws but criticised the way in which CAP funding will be allocated.
Noichl argued that the very big farming consortiums will get most of the money.
Alternatively, the CAP has also been criticised for helping deforestation the amazon and exploit immigrant farmworkers, the DW explained.
In fact, Noichl told them that this EU policy is “geared to exports, that wants foremost to enter other markets and practice dumping. It’s a fact that products from Europe are challenging African producers.”
Meanwhile an agriculture officer at the European Environmental Bureau says that the EU will continue to overproduce products like milk, and continue to import things like soya from the US, South America and Brazil.
In the long-term, she said, this will negatively impact global food security and the environment as a whole.
What do you think about this?