Greening the Common Agricultural Policy - Environment, Food and Rural Affairs Committee Contents

1  Introduction

1.  The European Commission published its draft legislative proposals for reform of the Common Agricultural Policy (CAP) in October 2011.[1] The draft legislative proposals comprise Regulations on Direct Payments; the Single Common Market Organisation; Support for Rural Development, and Financing, Management and Monitoring. The Commission proposes replacing the existing direct payments (under Pillar 1) with a basic payment topped up by an additional payment conditional on farmers respecting certain "agricultural practices beneficial for the climate and the environment" financed from 30% of the national Pillar 1 envelope.[2] Receipt of the 'greening' top-up to the basic payment will require farmers to respect certain "simple, generalised, non-contractual and annual actions that go beyond cross compliance and are linked to agriculture".[3]

2.  When the draft Regulations were published the Commission intended that the legislative proposals be agreed by the end of 2012 to enable implementation from January 2014. This timetable has always looked over-optimistic, not least as it will not be possible to ratify the final agreement until the next multiannual financial framework has been agreed. Agreement on the legislative proposals may be concluded in the first half of 2013 with implementation in 2015.[4] Any in implementation will create difficulty for stakeholders and for Member States that are designing their rural development programmes and modifying administrative systems to take account of the Regulations.

3.  The Commission proposed three mandatory 'greening' activities: retaining areas under permanent grassland as declared in 2014; crop diversification,[5] and ecological focus areas [EFA].[6] The details of all three activities will be defined by the Commission under delegated acts, over which Member States have a limited say. Organic producers will receive the 'greening' top-up without having to carry out the three measures. Farmers whose farms lie in Natura 2000 areas (protected areas for the conservation of habitats, flora and fauna) or in areas covered by the Wild Birds Directive will be required to carry out the activities to the extent that they are compatible with the management requirements of those sites.[7] Farmers that apply for the small farmers' scheme (under which they receive a lump sum up to €1000 per annum irrespective of farm size, rather than an area-based payment) will be exempt from the 'greening' requirements.[8]  The draft Regulation states that "non-respect of the 'greening' component should lead to penalties" indicating that, as well as not receiving 30% of direct payments, farmers will be subject to additional, as yet undefined, fines if they do not carry out the required activities.[9]

4.  Pillar 2 of the CAP provides payments, co-financed by the Member State, for programmes intended to improve the environment and the countryside; to increase agricultural competitiveness and to improve the quality of life in rural areas and facilitate rural diversification. Agri-environment schemes, which are voluntary, contractual, multi-annual and targeted, are included under these programmes. These schemes provide for more sophisticated environmental management and are widely considered to be cost-effective and to deliver more meaningful environmental benefits than cross-compliance.[10]

5.  The Commission's package of CAP reform proposals included several other initiatives, some of which we considered in our report on The Common Agricultural Policy after 2013 published on 15 April 2011.[11] In this inquiry, announced on 3 November 2011, we have focussed on the Commission's 'greening' proposals.[12] We held four oral evidence sessions and heard from farming groups, NGOs, academics, and the Secretary of State for the Environment, Food and Rural Affairs.[13] We received written evidence from 35 individuals or organisations.[14] We are grateful to all those who contributed to our inquiry. The negotiations and discussions on these issues are continuing and significant developments have emerged since we concluded taking evidence.

1   See The CAP has a two-pillar structure. Pillar 1 is 100% funded from the EU budget; payments provide direct income support to farmers subject to cross-compliance rules. Pillar 2 (the Rural Development Fund) is co-financed between the EU budget and Member States over a multi-annual planning cycle. Pillar 2 provides additional payments to farmers for undertaking specific additional forms of management or investment, including for environmental protection. See Environment, Food and Rural Affairs Committee, Fifth Report of Session 2010-12, The Common Agricultural Policy after 2013, HC 671-I for fuller description of the structure of the CAP. Back

2   Proposal for a Regulation of the European Parliament and of the Council on establishing rules for direct payments to farmers under support schemes within the framework of the common agricultural policy, COM(2011) 625 final/2 Back

3   Ibid. Back

4   "New CAP will be delayed until 2015" Farmers Guardian, 23 March 2012; "Farron calls for clarity on CAP delay" Farmers Guardian, 6 April 2012 Back

5   Crop diversification: at holding level arable land of more than 3 hectares must have at least three different crops.None of the crops should cover less than 5% and the main crop should not exceed 70% of the arable land. Back

6   Ecological Focus Area (EFA): an area equivalent to at least 7% of a farmer's eligible hectares (permanent grassland is excluded from the calculation) should be used for ecological purposes. Habitats and features that would be eligible to fulfil the EFA requirement may include: fallow land, terraces, landscape features, buffer strips, and areas afforested under pillar 2. Back

7   Proposal for a Regulation of the European Parliament and of the Council on establishing rules for direct payments to farmers under support schemes within the framework of the common agricultural policy, COM(2011) 625 final/2 Back

8   Ibid. Back

9   Ibid. Back

10   Ev 98, Ev w50 ff. Back

11   Environment, Food and Rural Affairs Committee, Fifth Report of Session 2010-11, The Common Agricultural Policy after 2013, HC 671-I. Other elements of the Commission's proposals include:

Move to uniform area-based payments away from payments based on historic production levels;

Capping of payments at € 300,000 (after expenditure on salaries has been taken in to account and not applicable to the greening payment);

New definition of an 'active farmer'. To be eligible for direct payments, the recipient must actively maintain land in a condition suitable for farming and their income from direct payments must be at least 5% of their income from non-agricultural activities;

Additional top-up payment for young farmers (under 40 years old);

Simplified payment scheme for small farmers via a lump sum irrespective of farm size,

Optional top-up for areas of natural constraint (up to 5% of the Pillar 1 national envelope). Back

12   The terms of reference are available on the Committee's website: Back

13   Full list at p 43 Back

14   Full list at pp 43- 44 Back

previous page contents next page

© Parliamentary copyright 2012
Prepared 1 June 2012