GREENING OF THE COMMON AGRICULTURAL POLICY
(CAP)
(21855)
13491/00
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Special Report No. 14/2000 of the Court of Auditors on Greening the CAP.
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| Legal base:
| — |
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| Document originated:
| 13 September 2000 |
| Forwarded to the Council:
| 13 November 2000 |
| Deposited in Parliament:
| 1 December 2000 |
| Department: |
Agriculture, Fisheries and Food
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| Basis of consideration:
| EM of 12 December 2000
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| Previous Committee Report:
| None |
| To be discussed in Council:
| Early in 2001 |
| Committee's assessment:
| Politically important |
| Committee's decision:
| Cleared |
Background
12.1 Over the years, there have been concerns
that the intensification of agricultural production has led to
environmental problems, which have been exacerbated by the high
level of support provided under the Common Agricultural Policy
(CAP). In particular, the Community's fifth environmental action
programme ("Towards Sustainability") identified
agriculture as one of the five sectors where it was considered
that policies previously designed to promote economic development
needed to include an environmental dimension. At the same time
as this was being agreed, the Community was also implementing
its 1992 reform of the CAP, which included two major changes of
environmental significance — the lowering of price support
under several of the regimes for arable crops and livestock, and
the introduction of so-called environmentally-oriented "accompanying
measures". This process was subsequently continued in the
Agenda 2000 CAP reforms, which placed further emphasis on environmental
protection. This Report by the Court of Auditors analyses the
environmental significance of the policy changes in the 1992 reforms,
as well as the problems encountered in achieving the environmental
benefits which the "accompanying measures" were designed
to bring about.
The current document
12.2 The Court notes that, for arable crops,
these reduced support prices and introduced area-based direct
payments, with the aim of reducing the incentive to intensive
production through using large amounts of agro-chemicals. However,
it points out that the effects of these changes were undermined
by an unexpected increase in the world price of cereals, and by
the real increases which producers in a number of Member States
(including the UK) received as a consequence of the agrimonetary
system then in force. As a result, the Court suggests that the
reforms did not have a "sustained and significant impact"
on the use of artificial fertilisers or of pesticides.
12.3 The Court also points out that:
- because compensatory payments were higher for
irrigated farmland, this provided an incentive to use water, particularly
in areas of southern Europe where such use by agriculture is already
unsustainably high, and was often accompanied by intensification;
- the provision of higher compensatory payments
for maize production, and of higher aid rates for sunflower and
durum wheat, was often environmentally negative;
- although it was intended that aid would be paid
only for land previously used for arable crops, much grassland
had also been classified as eligible, with the consequent conversion
from pasture to arable involving greater use of pesticides;
- the allocation of support favours regions with
higher yields, where intensive farming practices are more common;
and
- the high environmental potential of the set-aside
requirement had not been realised in many Member States.
12.4 As regards livestock production, the
Court notes that the reform in the beef sector sought to encourage
extensive production through increased premia, but with the introduction
of strict limits on the number of animals per hectare for which
the basic aid was paid. However, it says that in practice the
rules allow a farmer to keep as many animals as he wishes, provided
his claim is limited to the eligible number, and that the effect
of the stocking limit was also undermined by an exemption for
small producers. It therefore concludes that the practical impact
of the stocking density restrictions has been "generally
limited". Similarly, it says that, although measures were
taken in 1991 to stabilise the Community sheep and goat flocks,
this was done at levels which are unsustainable in certain localities,
leading to overgrazing. Other factors identified by the Court
include (i) the failure of most Member States to impose additional
environmental protection restrictions on farmers, and to withhold
aid from those who do not conform to such measures, (ii) the extent
to which the lower feed prices brought about by the encouragement
of forage maize production have provided an advantage for the
intensive raising of livestock, and (iii) the extent to which
the major nitrate pollution problem generated by intensive pig
and poultry production persists in many regions of the Community.
12.5 In addition to these criticisms of
the regimes covered by the 1992 reforms, the Court notes the importance
in environmental terms of a number of other regimes. These include
tobacco, milk, sugar, intensive horticulture and wine, where it
suggests that even recent developments have failed to take adequate
account of environmental concerns. It also highlights the adverse
implications of two of the regimes. First, unlike other arable
aid, that for flax has been paid even if the land was not previously
used to grow it: this has therefore provided an inducement to
crop previously uncultivated land. Secondly, the aid arrangements
for dried fodder favour production dried by machine rather than
naturally by the sun, and are thus inconsistent with Community
energy policy.
- (b) The "accompanying measures"
12.6 Three such measures were adopted at
the time of the 1992 reforms:
- Council Regulation (EEC) No. 2078/92, which introduced
aid for the adoption of environmentally-friendly farming practices;
- Council Regulation (EEC) No. 2079/92, which encouraged
the early retirement of farmers; and
- Council Regulation 2080/92, which provided aid
for the afforestation of agricultural land.
12.7 The Court points out that, in practice,
the early retirement measure has had an insignificant impact,
and it has therefore concentrated its analysis on the other two
measures.
12.8 As regards Regulation 2078/92, it points
out that, even though the Commission retained ultimate responsibility
for the sound financial management of Community funds, the Regulation
was innovative in terms of the EAGGF Guarantee Fund in that it
gave Member States a significant role in Community policy development
by requiring them to draft programmes tailored to suit their specific
agricultural and environmental situations. Aid is provided in
the form of premiums per hectare or per livestock unit, designed
to compensate farmers for the extra costs incurred, and is co-financed
by the Community and Member States on a 50:50 basis (75%:25% in
the poorer regions).
12.9 The Court observes that the targeting
of scarce resources is essential to apply them with greatest impact,
but that the main factor in practice has been the willingness
of Member States to provide co-financing, resulting in a heavily
skewed distribution, with five Member States accounting for 86%
of expenditure. Another consequence has been a concentration on
maintaining existing practices, rather than the amelioration of
those damaging to the environment. In the Court's view, this represents
a "fundamentally inefficient" approach to aid distribution.
It also considers this situation has been made worse by widespread
discrepancies in aid rates, by the Commission's failure to give
detailed guidance to Member States on designing their programmes,
and by the quantitative and qualitative inadequacies of the personnel
deployed by the Commission (and indeed by the Member States) to
oversee this area of activity (which it says has persisted even
when it became apparent that the workload was higher than had
been anticipated). Similar criticisms apply to the afforestation
measures, where the Court also comments that in many cases support
has been given to species which are commercially profitable, but
whose environmental impact is negative, especially as regards
biodiversity and landscape.
12.10 A further criticism of the Court is
that the implementation of some of the agri-environment measures
may be incompatible with the "polluter-pays" principle,
in that it apparently transfers the environmental costs of agriculture
from farmers to taxpayers, unless farmers are paid to deliver
a standard of environmental performance which exceeds "good
agricultural practice". In practice, however, standards of
normal performance across much of Europe are either non-existent
or underdeveloped, and it is thus not feasible to ensure that
the aid is securing real benefits in environmental performance.
More generally, the Court is critical of the failure to develop
environmental indicators and of the lack of follow-up by the Commission
and Member States, which it regards as essential if value for
money is to be achieved.
12.11 The Court concludes that improvements
are needed from Member States in the design, implementation, control,
monitoring and evaluation of programmes, whilst the Commission
must improve programme approval and follow-up by providing sufficient
staff with the right skills. It also says that a thorough review
of all environmentally relevant measures which have an impact
on agriculture should be conducted so as to secure better co-ordination
between the various Community initiatives, and that the targeting
of Community aid to priority zones and to combat damaging activities
should be improved.
The Government's view
12.12 In her Explanatory Memorandum of 12
December 2000, the Minister of State (Commons) at the Ministry
of Agriculture, Fisheries and Food (the Rt. Hon. Joyce Quin) comments
that the Commission has acknowledged many of the policy shortcomings
identified by the Court, but that it has pointed out that the
Agenda 2000 reforms have addressed many of them. In particular,
the Commission considers that the new Rural Development Regulation
(Council Regulation (EEC) No. 1257/1999) provides a more coherent
approach for integrating environmental concerns, as well as strengthening
the verification and evaluation requirements. She adds that, from
the UK viewpoint, the Court's criticisms of Commission staffing,
and the allocation of the rural development budget among Member
States, require further consideration by the Commission.
Conclusion
12.13 This is an interesting report,
and, as it relates to an important new area of activity introduced
as part of the 1992 Common Agricultural Policy reform, we are
drawing it to the attention of the House. However, unlike a recent
Court report on the olive oil regime, we do not think the document
raises issues on which we need to request further information
or which would justify a recommendation for debate, and we are
therefore clearing it.
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