CAP budget proposal 2021-2027  

A total decrease of – 8% (1st & 2nd pillar and recovery plan), 

With -31 billion € less: A proposal suggesting that the agricultural sectors

should only rely on themselves

Brussels, 27 May 2020

Commission President Ursula von der Leyen today presented her proposals for a revised EU budget for the period 2021-2027 and a recovery plan for the EU economy.

The sum of the announcements is substantial and requires a detailed analysis of the guidelines that the European Commission is proposing for European agriculture and the development of rural areas.

A week before, the same Commission adopted the Farm to Fork and Biodiversity Strategies stressing the importance of food security in the European Union and the central role of European farmers, while asking the co-legislators to endorse a set of new measures that would lead, with a constant CAP, to a reduction of at least 15% in European agricultural production and both an agricultural and rural decline.

To meet the challenges it has drawn, the Commission is today proposing a CAP 2021-2027 budget of 374.958 billion current euros and an allocation of € 16.483 billion for economic recovery. 

Is such a CAP budget up to the promises announced and the needs of the European agricultural and rural sectors?

First observation: with regard to the CAP budget (excluding the stimulus package), the Commission is simply maintaining its proposal of last February for a CAP budget barely spread out in current euros (maintaining the 1st pillar, a 6% decrease in the 2nd pillar), therefore a drastic decrease of 12% in constant euros, thus in real value for agricultural and rural economic actors.

Second observation: the addition of € 16.483 billion (economic recovery package) to the second pillar (rural development) – while it allows for an increasing total budget in current euros – is very far from offsetting the budget cuts made in constant euros.

In total, the Commission’s proposal of the CAP 2021-27 budget with the so-called “economic recovery” envelope amounts to 352.145 billion Euros 2018, compared to 383.6 billion Euros 2018 for the CAP 2014-2020.

The Commission is therefore proposing a severe cut of €31 billion in aid over the period, concentrated on the first pillar of the CAP.

This budget proposal does not offer any real prospect for an economic sector shaken by the crisis, whose ability to continue to produce and take care of rural areas is however vital, but on which the Commission plans to place additional constraints without ultimately giving it the capacity to invest massively in techniques and routes with dual economic and environmental performance.

In the end, less aid, more requirements and suggested constraints result in less income and capacity to invest in the future. The gap is obvious and not very credible.

Now, it is up to the European Council and the European Parliament to restore coherence and to give the European agricultural sectors the means to fulfill their mission of supplying the markets in quantity and quality and of sustainable management of our ecological heritage.

The European Commission has published today its Biodiversity Strategy for 2030 and its ‘Farm to Fork’ Strategy. In line with the Green Deal, these are presented as a roadmap for further initiatives on preserving and protecting biodiversity and on designing a fair, healthy and environmentally-friendly food system.

Farm Europe welcomes a strategical thinking on the future of agriculture and food systems for the EU. In fact, we believe that EU policies should contribute to further environmental protection and to fight climate change, and that has to be done hand-in-hand with furthering the economic situation of farmers and assuring food security.

These Commission Communications include positive elements, notably acknowledging the need to ensure food security, the fact that EU food is safe and of good quality, the difficult farmers’ economic situation, the need to ring-fencing eco-schemes, supporting digital farming and EU biomethane production, to name a few.

However, these two strategies leave open a number of questions about the overall coherence of what is proposed.

Last week, Commissioner Kyriakides stated that better data is needed to decide on identifying and quantifying such reduction targets. However, steep reductions on pesticides and fertilizers, and a forced decreased of agriculture land, are proposed. Making these proposals without providing an impact assessment seems incomprehensible.

Indeed, the Commission needs to demonstrate first that its proposals will not put an added burden to the already stretched farmer’s livelihoods nor result in a decrease of EU agricultural production, which would be far from the objective of increasing the European food security and enhancing growth in the EU and its rural areas.

Today, beyond the general orientations of food security, improvement of the environmental and economic sustainability of agricultural sectors and territories, it is therefore necessary to analyze the added value that the concrete measures proposed by these strategies could bring to the ‘European Union.

Right now, the combined two proposed strategies, if implemented as such, would result first and foremost in a reduction of 15% EU agricultural production and a sharp decline of EU food security.

In addition, the proposed restrictions for EU farmers appear in sharp contrast to the not strong enough stance on imports produced in harmful environmental conditions, where only labeling is considered. EU farmers will thus face an even less playing field, being obliged to adhere to costly stricter environmental conditions that their competitors are not subject to.

Last not least, some incoherencies in the strategies have to be addressed on the relationship between the Farm to Fork Strategy and the Common Agricultural Policy (CAP) and its reform.

As Vice-President Timmermans has stated, a high level of environmental protection and environmental policy integration can be combined with an equally high level of economic development and growth.

It is high time that the EU lives up to this statement, and makes sure that it becomes a reality.

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First analysis of measures as proposed by the EC:

• The proposed Strategies underline the need for innovative investments in EU agri-food systems while remaining unfortunately vague on the support which would be brought, without a word on the necessity to have a more efficient EU toolkit to better manage the volatile economic environment, to face climatic and markets risks and crisis. After the COVID-19 pandemic and its economic impact on the sector, the need of more risk and crisis management tools is obvious.

• At the same time, they propose very precise restrictive measures to be implemented by 2030 on inputs use, on the share of agricultural land to be let unproductive (10% with a location to be decided by Members states -despite the environmental importance of ensuring homogenous presence of EFAs-) and on the share of EU agricultural land under organic farming (25%), while making a confusing link between the economic and environmental impact of agro-ecology and organic.

• Concerning EU protein production, the wording needs to be more than empty wishes. The Commission should commit itself to propose concrete and efficient means and recognize that the only successful tool over the last decades to increase this production has been the development of EU sourced biofuels.

Concerning the link between the two proposed strategy and the CAP reform, there is a question mark on how would the Commission add-up reduction targets for Member States while taking into account their differences and farm realities? How would the Commission oblige Member States to revise targets if the Strategic Plans that were drawn in 2022 would have no legal basis to adhere to in order to set reduction targets for pesticides and fertilizers that would only be decided through a revision of the related directive starting in 2022?

This design also poses the problem of consistency between:

• the CAP reform project which claims to entrust Member States with the task of defining 27 different CAP national strategies,
• and the aim of the Commission to strengthen its power, to define guidelines for each member state and transform the requirements it proposes in these two strategies into conditions for the approval of national CAP strategic plans.

Wine news continues to be marked in this April by the Covid-19 pandemic. Various associations, professional wine organizations (Italian, Spanish, French wine cooperatives, CEEV, EFOW) asked the European Union for help during this month of April following the Covid-19 pandemic.

At European level, the European Commission adopted a package of exceptional measures on the 22nd of April, notably to help the wine sector. On April 30, the Agriculture Commissioner acknowledged the inadequacy of the measures proposed during a meeting of the European Parliament’s Agricultural Committee, without, however, presenting new ones.

The European Commission is announcing declining figures for wine consumption in the coming months.

Finally, at the global level, according to the OIV, low volumes are expected for 2020 in the majority of the countries of the southern hemisphere, with the exception of South Africa and Uruguay, following initial estimates of production.

full note available on FE Members’ area