Greening the Common Agricultural Policy

Written evidence submitted by Friends of the Earth (GCAP 33)

Friends of the Earth welcomes the opportunity to respond to the EFRA Committee’s inquiry on greening the CAP. The future CAP now being debated provides a chance of transforming the way we produce food, making it part of the solution for the environment rather than part of the problem. Doing so can result in more competitive, resilient farming in Europe that is able to face the significant challenges of producing food using less resources in the future. Greening of Pillar 1 can play a major role in this transformation.

1. Whether the proposal to green direct payments will generate significant environmental benefits; Recommendations for improving the greening proposals:

1.1 After 50 years under the CAP Europe is facing significant environmental damage from farming. Farming in Europe today is heavily dependent on fossil fuels and does not adequately take into account the limitations of water and land resources. Farming is one of the primary contributors to biodiversity loss, nitrogen pollution, climate emissions and damage to soil quality across Europe. At the same time Europe is a key driver of deforestation in the tropics through its imports of soy and grain for animal feed. Looking ahead, all these factors combined with rising energy costs, a declining natural resource base and climate change threaten the future of food production.

1.2 We can only address these challenges by taking steps to transform EU farming as a whole in line with environmental realities, rather than only focusing on the small areas covered by Pillar 2 agri-environmental schemes. Incorporating genuine greening measures in Pillar 1 will ensure that they cover nearly all of EU farmed area. It will also make these environmental measures mandatory rather than voluntary as under Pillar 2 and back these measures with a much larger proportion of CAP funding than Pillar 2 which is vital to ensure enforcement and results. Lastly, greening Pillar 1 sends the signal to EU citizens that the CAP will spend their money delivering real benefits for society as a whole. Surveys across Europe have found that 95% of EU citizens think environmental protection is important while more than 70% think direct payments should be linked to environmental protection in some way. [1] [2]

1.3 The European Commission has proposed greening 30% of Pillar 1 payments. The current proposals for greening measures do not go far enough to shift EU farming to sustainable resource base but are a step in the right direction. Greening can deliver vital benefits for both farming and the environment if designed and implemented properly. We believe DEFRA must support the aims of greening from the Commission and engage fully in designing the detail to achieve the most benefits. DEFRA has significant experience and expertise to contribute to the greening debate from many years of research and policy support to ensure effective environmental delivery from farming.

1.4 The evidence to support the need for greening is clear. More than half of Europe is covered by farmland and farming has played a key role in the decline of wildlife across Europe particularly of pollinators. In 2010, the EU failed to meet its target of halting biodiversity decline in Europe and EU leaders have agreed a new 2020 target with agriculture identified as a key area for action.

1.5 Agriculture is also responsible for 9.6% of EU GHG emissions, including 75% of the EU’s nitrous oxide (N2O) emissions from fertiliser applications and 49% of the EU’s methane (CH4) emissions. [3] In particular European livestock farming is a major contributor to global warming. This system is responsible for 85% of total GHG emissions from the agricultural sector or 12.8% of total GHG emissions if land use and land use change emissions are included. [4]

1.6 There are also significant costs from Nitrogen pollution – the European Nitrogen Assessment estimated costs of up to 320 Billion euros from Nitrogen losses to the environment in Europe, and noted the disruption to the nitrogen cycle from the livestock sector. [5]

1.7 The Commission proposes 3 types of greening measures – 7% ecological focus areas, crop diversification and maintaining grasslands. All these 3 measures have the potential to address the impacts outlined above but will be significantly more effective if they are strengthened. There must be a clear penalty scheme for non-compliance and greening must be mandatory for all farmers for whom the measure can be applicable, rather than for farms where greening measures are ‘suitable’ as in the current text.

1.8 Crop diversification: This is a key greening measure that must be strengthened to be a requirement for mandatory crop rotations including legumes. Crop rotations are recognised as basic good agronomic practice and their benefits for reducing pesticide use, improving soil quality and fixing nitrogen are well documented. In addition, rotations with legumes can play a key role in reducing Europe’s imports of proteins from tropical areas and related deforestation, emissions and loss of global biodiversity hotspots.

1.9 Crop rotation builds good soil structure, increases organic matter and water provision, resulting in a higher yield. Crop rotation, especially performed with nitrogen-fixating rotation crops, can reduce the input of fertilizers and so reduce pollution by nitrogen; a high nitrogen-supply has been found to contribute to soil organic matter depletion pointing to the role of high N-fertilizer use as a reason for carbon depletion [6] . Crop rotation, especially combined with conservation tillage, will lead to higher soil-carbon content and so contribute to combating climate change. [7]

1.10 Crop rotations with cover crops can also provide extra cash crops for farms. The European Commission found that some farmers practice rotations for the benefits to extra income and soils but despite existing scientific evidence on the benefits many farmers continue to practice simplified rotations as it tends to be economically safer and agronomically feasible in most cases. A study by the European Commission aimed at providing as complete and accurate a picture as possible of crop rotation practices in the European Union and their environmental impacts found that diversified multi annual crop rotations of more than 3 botanical families have multiple environmental as well as agronomic benefits. [8] The study recommended implementing multiple measures to boost crop rotations across the EU. Therefore it is clear that crop rotations can be a win-win measure for both farmers and the environment.

1.11 Crop rotations with legumes will also play a key role in reducing Europe's impact on deforestation, climate emissions and loss of biodiversity arising from our imports of soy, by providing a reliable supply of alternative proteins for animal feed. Research conducted by Friends of the Earth with stakeholders in the livestock and feed sector showed that a major barrier to farmers using more European protein crops is a lack of adequate and sustained supply. With global animal feed prices rapidly increasing, it is essential that this round of CAP reform kick starts the European market for proteins.

1.12 Maintaining grasslands: Grassland are a part of High Nature Value farming systems which are crucial for biodiversity and for tackling other environmental problems. They are, typically, extensive grazing systems or systems with closed cycles so that farmers feed their animals from sustainably locally-produced feed without relying on imported South American soy. High Nature Value farming systems are threatened by abandonment and intensification. Focused support through the CAP is required if they are to survive and so continue providing these benefits. In particular, permanent, extensively-managed pastures are essential for the long-term sustainability of food production, biodiversity conservation, water quality and resilience to climate change. Payments for grasslands in greening must be sufficient to incentivise farmers to continue to farm semi-natural grassland systems or move towards well-managed pasture/grassland systems. Crucially, cut-off dates for the payment must be set in the past, in order not to trigger a wave of pasture destruction at the release of the proposal.

1.13 Extensive grassland livestock production has been found to act as a net carbon sink [9] while research by the European Commission has found that ‘Generally intensive systems create less methane and N2O emissions than extensive ones, but this compensated by higher emissions from land use and land use change. The lowest emissions are created by the extensive grassland system." and

‘Finally, high CO2 emissions indicate a strong dependency on feed imports and, in general, feed crops, and a high use of mineral fertilizers for feed production." [10]

1.14 The graph below shows the global mitigation (decrease in carbon emissions) potential through agriculture. It shows that the mitigation potential from grassland management and restoration of cultivated organic soils is many times that of methane reductions from grazing livestock. Yet there is little focus on grassland management or restoring soils and excessive focus on reduction of methane from grazing livestock in climate mitigation discussions. A greening measure on crop rotation can play a key role in climate mitigation potential of agriculture.

Source: Smith et al. Greenhouse gas mitigation in agriculture. Philosophical Transactions of the Royal Society, B.,363. doi:10.1098/rstb.2007.2184

1.15 In addition, payment schemes must be underpinned by an effective cross compliance regime to ensure a minimum level of environmental protection. Improved cross compliance requirements, along with proposed greening measures, must deliver an improved environmental baseline upon which more targeted and ambitious schemes under Pillar 2 can operate. There must be sufficient funding attached to environmental schemes, farmers must be offered adequate levels of support and advice and suitable sanctions must be in place for those who do not manage their land sustainably.

2. The impact of additional greening requirements on food production and the competitiveness of the agricultural industry

2.1 Defra must not fall into the trap of assuming that a global food crises requires more food production in Europe. As noted by the UN Special Rapporteuur on the Right to Food, The strategic objective [of the EU] today should be to support developing countries to "feed themselves"; not be to "feed the world". [11] Therefore arguments that greening measures will reduce EU food production and therefore impact food security must be closely examined. Several analyses have shown that the best way to ensure the poor and hungry are fed is to re-localise food production in developing countries with a focus on smallholder food producers. [12] In addition studies by UNEP and UNDP have shown that farming in developing countries such as Africa has the potential to double yields if they apply agro-ecological techniques. [13] The UN Special Raportueer also notes that current discussions on the need for EU to increase food production obfuscates the impact of western consumption patterns on the global equation. Nearly half of the world’s cereal production is used to produce animal feed, and by mid-century, 50 per cent of total cereal production may have to go to increasing meat production. Reducing losses and waste in food chains, as recommended by the European Parliament, together with a reallocation of cereals used in animal feed to human consumption, including through a broader promotion of diets that better balance proteins from plant and animal origins, could go a long way towards meeting the increased needs. [14]

2.2 On the other hand the 3rd Foresight report of the Standing Committee on Agricultural Research (SCAR) notes that globally and in many regions including Europe, food production is exceeding environmental limits or is close to do so. It stresses the imperative to ensure that "resource consumption and pressures on the environment do not increase at rates which will eventually result in human and environmental catastrophes". [15] Therefore it is clear that we cannot achieve global food security without urgently tackling the impacts of EU agriculture on the environment and moving to farming systems that recycle and renew resources. Effective greening measures such as crop rotations are steps towards this.

2.3 While the EU is a major agricultural exporter, it is also the world's largest importer of agricultural products which has knock on impacts for other countries food security. Importing agricultural commodities into the EU increases pressure on the natural resources of developing countries, and competition for land and water resources between large producers, who have access to export markets, and small-scale farmers. It also encourages developing countries to maintain export-led agricultural policies, at the expense of strengthening local and regional markets that could provide major benefits for the poorest farmers, as well as ensuring access to food for local communities, including fresher and more nutritious food for urban populations. [16]

2.4 This is exemplified by the EU’s imports of soy protein to feed its factory farms. The EU is heavily dependent on soy from abroad using about 20 million hectares of land for its imports. [17] In countries exporting soy to the EU, staple food crop production has fallen, displaced by soy resulting in food insecurity. Soy monocultures have also resulted in eviction of small scale farmers and local food systems as well as rural poverty and unemployment. [18] Competitiveness considerations must include impacts on the environment and diversification of crop production in the EU to increase EU self-sufficiency overall rather than simply increasing productivity per labour unit of existing monocultures.

3. Consistency of the greening proposals with the CAP simplification agenda;

3.1 Much of the criticism of complexity and burdens from greening measures have been based on assumptions about the way the detail will be implemented rather than clearly identified problems due to lack of detailed information in the European Commission proposals. Crop diversification is criticized for not being applicable to all farms and for penalizing mixed farming systems. Yet there are implementation methods that can deal with these issues, for example in ensuring the way crops are defined includes the concerns of mixed farming systems. Crop rotations would have more benefits and would be easier for farmers to implement. Despite being a multi-annual measure they could be monitored annually for example by farmers delivering cropping plans that are subject to randomized inspection. Crop rotations are already partly included in keeping land in Good Environmental and Agricultural Condition as part of current Pillar 1 cross compliance measures. Simplification must not be used as an excuse for inaction or for maintaining the status quo in environmentally damaging farming, especially where the imperative for action is high. It is also vital that greening is strong enough to deliver benefits that outweigh pressure to simplify the CAP and DEFRA must play a role in this.

4. How greening pillar 1 can be made coherent with agri-environment schemes

4.1 As mentioned in section 1 there are particular benefits of including environmental and resource management measures into Pillar 1 including enforcement, their mandatory nature and far greater coverage of farmed area. However these cannot be a substitute for more in depth, tailored and managed environmental measures under Pillar 2 agri-environmental schemes. Greening Pillar 1 must be aimed at improving baseline environmental performance of all EU farms which enables Pillar 2 measures to have more demanding outcomes. Greening can free up measures and resources under Pillar 2 that are currently trying to improve baseline performance and these can be used very effectively for new measures aimed at improving long term resource management. For example, improving nutrient balance on farms especially livestock farms using tools that include calculations of nutrient imports through animal feed.

4.2 However for Pillar 2 to be effective the budget within it for agri-environmental measures must be strengthened. There must not be an option to use all funds from Pillar 2 for ‘competitiveness’ measures or any options for reverse modulation ie transferring money from Pillar 2 to Pillar 1 as currently proposed. There must also be ring fenced spending for agri-environment schemes under the Pillar 2 menu of options. With these issues taken into account, greening and agri-environment schemes can complement each other successfully.

5. Other elements of the CAP proposals

5.1 Capping: The proposals from the Commission to cap payments to large farms (taking into account employment on farm and environmental performance) have been criticized as being unworkable and penalizing efficient farms. However for the reasons below we believe capping is a welcome move and can be made workable.

5.2 The current system of allocating direct payments creates many unwanted outcomes such as subsidy millionaires which is a major reason for public distrust in the CAP. Historically, the Common Agricultural Policy has supported the growth in size of farming enterprises so as to improve their economic efficiency. Current methods of SPS payments calculated per hectare, favour larger farms and promote concentration of holding with increased capitalization and less labour. Today the context of CAP reform is very different from before with many environmental problems arising as a consequence of industrialization of agriculture with low labour which has lead to simplification of rotation cropping, the removal of hedgerows, and levelling of slopes. Such factors have impacted agricultural ecosystems, and consequently the environment as a whole, through soil erosion, diminished biodiversity, leaching and eutrophication.

5.3 Jobs lost today in farming are not easily absorbed by other sectors, be it in industry or services. In the current context of rising unemployment, the dwindling numbers of farms and full-time jobs are creating acute employment problems. Therefore rural exodus and abandonment of the countryside are major problems in many parts of Europe and there is an urgent need to create more jobs in farming. Contract workers are seasonal and not guaranteed; in addition there are many problems with labour conditions for contract workers in agriculture many of whom are migrants. SPS payments more closely linked to employment rather than land area could be a way to overcome this. Therefore DEFRA must engage with discussions on how to implement capping and make it least burdensome, for example by collecting data on employment and salaries only for those farms that would reach the capping limit rather than all farms.

5.4 Small farms payment: Small farms in Europe and the UK are most likely to be farming High Nature Value farms and in areas with natural constraints. Many of them operate at the brink of viability despite provide beneficial social and environmental outcomes such as landscapes, carbon storage from grazing livestock or maintaining rare breeds. Yet they receive the least support from the CAP. Therefore this measure is welcome but the payment must be enough to keep them in production, which is not the case in the current proposals. Small farmers should be provided with additional incentives for methods of production beneficial for the environment rather than being exempt from all environmental measures. This must be supplemented with extension services for small farmers in Pillar 2.

5.5 Crisis funds for low incomes: The crisis reserve is an ineffective and expensive way to deal with price volatility in the global market. Farmers’ incomes are low due to a number of reasons, including retail concentration and the lack of regulation mechanisms to ensure prices paid to farmers cover costs of production or control overproduction which creates structurally low prices. With decoupled payments, farmers who are reaping the benefits of high global prices still receive public funding e.g. cereal farmers, while farmers suffering from high input prices and low incomes eg livestock farmers do not receive any payments. Effective market regulation mechanisms combined with targeted direct payments can be a much more cost effective way to prevent too low or too high prices. Predictions for the future show that high and volatile commodity prices are here to stay. Therefore the CAP must start implementing measures to control the structural causes of volatility rather than just mitigate its impacts. Risk can be addressed through diversification strategies, such as addressing the imbalance in Europe’s feed self-sufficiency to redress the current state where livestock farmers are at the mercy of global feed prices. It can also be addressed through effective market regulation measures. For example, building food reserves have been identified as an effective way to ensure food security as well as mitigate the impacts of price volatility in the medium term. [19]

5.6 Risk management tool in Pillar 2: Funding insurance for farmers would only benefit the few farmers who can afford insurance for their production, which in most cases would be the bigger farms. This would also encourage enterprises to sell their production on the stock market and encourage food speculation. Using Pillar 2 funds for risk insurance will also significantly reduce the budget available for agri-environment. Risk must be addressed through diversification strategies, and market regulation in Pillar 1.

5.7 Export refunds: As noted in section 2, export refunds have played an extremely destructive role on developing countries food security. The EU committed in the Doha Round of trade negotiations to phase out all export subsidies yet the CAP proposals retain export refunds for a range of products. All export subsidies need to be phased out completely from the CAP 2014.

30 November 2011

[1] Special Eurobarometer 368 The Common Agricultural Policy

[2] Special Eurobarometer 365 Attitudes of European citizens towards the environment

[3] European Environment Agency, The European environment State and Outlook 2010 – Mitigating climate change, Publications Office of the European Union, Luxembourg, 2010, pp. 14 ‐ 15

[4] Evaluation of the livestock sector's contribution to the EU greenhouse gas emissions JRC 2010

[5] European Nitrogen Assessment 2011

[6] S.A.Khan et al. J. Environ. Qual. 36:1821-1832, 2007: “The myth of nitrogen fertilization for soil sequestration”

[7] L.M.Vleeshouwers et al. Global Change Biology 8:519-530, 2002: “Carbon emission and sequestration by agricultural land use: a model study for Europe”

[8] European Commission (2010) Environmental Impacts of Different Crop Rotations in the EU

[9] Sousanna et all Animal (2010), 4:3, pp 334–350, ‘ Mitigating the greenhouse gas balance of ruminant production systems through carbon sequestration in grasslands

[10] Evaluation of the livestock sector's contribution to the EU greenhouse gas emissions JRC 2010

[11] The Common Agricultural Policy towards 2020: The role of the European Union in supporting the realization of the right to food Comments and Recommendations by the United Nations Special Rapporteur on the right to food

[11] Mr. Olivier De Schutter 17 June 2011

[12] See report of Committee on World Food Security session 37 ‘Policy roundtable “How to increase food security and smallholder-sensitive investment in agriculture”

[13] Organic Agriculture and Food Security in Africa UNEP 2008

[14] The Common Agricultural Policy towards 2020: The role of the European Union in supporting the realization of the right to food Comments and Recommendations by the United Nations Special Rapporteur on the right to food

[14] Mr. Olivier De Schutter 17 June 2011

[15] European Commission – Standing Committee on Agricultural Research (SCAR) The 3rd SCAR Foresight Exercise

[16] The Common Agricultural Policy towards 2020: The role of the European Union in supporting the realization of the right to food Comments and Recommendations by the United Nations Special Rapporteur on the right to food

[16] Mr. Olivier De Schutter 17 June 2011

[17] The EU protein deficit: what solution for a long-standing problem?, EU doc. A7-

[17] 0026/2011, 4.2.2011

[18] What’s feeding our food? The environmental and social impacts of the livestock sector, Friends of the Earth 2008

[19] The High Level Panel of Experts on Food Security and Nutrition – Report to the UN World Committee on Food Security (CFS) ‘Price volatility and food security’ 2011

Prepared 21st December 2011