Informal Agri Council, Koblenz, August 31st – September 1st

The German Presidency tabled a series of questions ahead of the meeting. The first set addresses the resilience of the food system in the face of this & future crises. The Presidency asks “In your opinion, what do we primarily need to change to make the food supply chain more resilient to crisis-related disruptions in the future? Do you see any need for action to strengthen the independence of food supply within the EU, ranging from inputs, production & processing to marketing?” The paper highlights increased consumer interest in the origin of products & a growing desire to buy locally produced food. Ministers were asked, “In your opinion, in which areas should the labelling of origin be improved first? How can better labelling help consumers without impeding the free movement of goods within the internal market & while being compliant with WTO rules?”

Authors underline that “expectations regarding animal-welfare friendly livestock husbandry have also grown,” which means that “many consumers wish food labelling to provide information on the welfare of the animals during husbandry, transport & slaughter.” Ministers were thus asked, “What does an EU-wide animal welfare label need to deliver? How should the label be structured? What criteria should the label be based on?” The Presidency goes on to animal transport, saying that conditions “must be improved.” It seeks responses from delegations as to what the EC needs to “implement so that animal transports can be carried out in an animal-friendly way? How do you see the future of animal transports?”

Throughout the meeting, German Farm Minister Julia Klöckner had stressed repeatedly the need to combine ecological resilience with economic & social factors, & she pointed out that all three had to be defined. She contrasted repeated reminders from Ministers of the need to preserve the Single Market, with increased interest in local & regional products. “If this happens again, how can we ensure free movement of labour?,” she asked as an example. “We need greater European autonomy on food supply”. “Rule-based international trade, an efficient single market and regional production cycles are all sides of the same coin”.

Klöckner also stressed the need for a “positive prospect” for farmers, with incomes guaranteed, or they were likely to stop farming. “In some areas, we need to invest more,” she said, raising the issues of the EU’s deficit in protein crops & its imports of veterinary medicines.

On EU origin labelling system, “a lot of colleagues thought this was important, but a lot stressed the importance of the Single Market,” (cf. Annex) while several had raised the issue of ambiguous or misleading origin labelling on blended honey. Klöckner also raised Berlin’s plan to introduce a Nutri-Score system of front-of-pack nutrition labelling.

On animal welfare, any welfare labelling scheme would have to be credible, with a scientific basis & be comprehensible by the consumer. “The labels should refer to a standard which is more than the minimum”. Ministers, Klöckner felt, had “taken a step forward,” on the issue. Regarding animal transport, Klöckner said she had emphasised the need for harmonised rules which would be enforced. “We shouldn’t transport animals to be slaughtered in third countries.” “The alternative is no more animal transport”.

In the margins of the meeting, the DE presidency showcased new technology in vineyards. The first day of the gathering centred around a visit to Winningen. The area’s “steep terraced vineyards” are “very labour intensive,” . This implies the need to provide the right conditions to encourage young farmers into the sector. Digitalisation is key, the Minister underlined, introducing a demonstration of the use of drones to apply plant protection products with greatly increased precision, their value in assessing, with heat sensing, crop development. Precision farming would be more environmentally friendly, but also reduce the workload of farmers.

Commissioner Janusz Wojciechowski informed ministers that he is taking charge of drawing up a plan for ensuring food security during future crises. Food supply was “never really at risk,” but “uncoordinated measures by Member States to restrict the free movement of goods & persons put unnecessary pressure on our supply chains”.

For him, cooperation between the food supply chain was important to make it more resilient, while market information needed to be available on a timely basis. He insisted that “protectionism is not the answer.” “Functioning of the internal market is essential in keeping the supply chain intact,” and “international trade is part of the solution not part of the problem when addressing the food security issue.” He also pointed out that some sectors were more vulnerable than others & blanket measures can be counterproductive. “We need to preserve the affordability of food, while generating fairer economic returns to those who ensure food provision on a daily basis”. “I will take the lead in the Commission to elaborate a contingency plan for ensuring food supply & food security in the EU during crises”. “The Commission will also propose a legislative framework for sustainable & resilient EU food systems.”

Wojciechowski said as well that national measures on origin labelling pose a real risk to the Single Market, while the EU’s executive will look at mandatory labelling for certain products as part of the Farm to Fork Strategy. He pointed out that there were already EU origin labelling requirements in place for “a number of categories of food such as fresh meat, fruits & vegetables, honey or olive oil.”

Full note available on Farm Europe’s members area

Measures & impacts related to the Covid 19 crisis: end of meat storage aid

At European Parliament level, Anne Sander MEP was appointed rapporteur for the EPP group in the Agriculture Committee on the EU recovery plan.

The European Commission has suspended and then closed the two public aid schemes for the meat storage (beef and lamb) due to their low level of uptake. It has also presented guidelines for the protection of seasonal workers in the EU.

In the Council, Ministers unanimously asked the Commission to continue to monitor the market situation rigorously, and call for more support for the pig, olive and wine sectors through more market intervention measures.

 

The Food and Agriculture Organization of the United Nations (FAO) and the World Food Programme (WFP) have warned that 27 “at-risk” countries are threatened by an imminent food crisis due to the pandemic.

 

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New Breeding Techniques: strong call to review the legislation

In July, the news was marked in the United Kingdom by the House of Lords’ rejection of the amendment of the agriculture bill that was intended to give the government the freedom to change regulations to make access to new varietal selection techniques possible. The institution would like to have a public debate beforehand.

Following the declaration in June by a group of German Green MEPs in favour of the use of NBT’s, Martin Häusling, Greens/EFA spokesperson for agriculture in the European Parliament, stressed that nothing has changed for the party, which has historically opposed this technology.

123 European research institutes call on the Commission to urgently review the legislation on genome editing.

 

full note available on FE Members’ area 

Negotiations for the EU budget: a CAP decline of 10,2%

The month of July was marked by the agreement reached between the Heads of State and Government on the EU’s Multiannual Financial Framework. For the CAP, the agreement was reached on the basis of a proposal by the President of the Council with some minor adjustments to the February 2020 text, including €1.45 million of additional funds for market-related payments and direct aids, as well as revised co-financing rates for rural development support. Expressed in constant 2018 euros, the CAP budget is €39 billion lower (-10.2%). In current euros, it remains stable.

In the wake of the agreement, MEPs voted a resolution opposing the MFF as it stands, calling the cuts to several flagship programmes “unacceptable” and rejecting the continuation of rebate schemes. This resolution in no way means a rejection of the MFF, but a European Parliament that wants to enter into negotiations with the Council. It has little room for manoeuvre, given the debates between countries and the fact that the EP can ultimately only accept or reject the Council’s budgetary decisions en bloc.

 

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CAP Reform negotiations: towards a general approach in October

July was marked as follows:

  • At the level of the European Parliament, the difference between the Envi and Agri Committees persists; the former has made it known to the latter that its withdrawal from the process of drawing up compromise amendments to the Strategic Plans Regulation does not mean stop from the reform process as a whole. But it refused ComAgri’s invitation to a joint meeting on 14 July.
  • As regards the transitional regulation, the Commission contests the position adopted by the co-legislators of a two-year transition, threatening to withdraw its proposal for a regulation. In fact, it intends to negotiate additional environmental measures in exchange for its adherence to the technically unavoidable two-year transition period. The President of the Commission wants to be able to post 40% of the CAP budget devoted to the environment by 2022.
  • Meeting for the first time under the German Presidency to discuss the F2F strategy, the green architecture and the market situation, with delegations awaiting eagerly the Commission’s recommendations for drawing up their strategic plans, the Council agreed to aim to secure a general approach on CAP reform in October. Intention shared by the coordinators of the political groups in the ComAgri.

 

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Agri-Fisherie Council: F2F, CAP and Market situation for the return to Brussels

The AGRI-FISH Council meeting was the first physical meeting of the Agriculture and Fisheries Council since January 2020 and the beginning of the COVID-19 pandemic. The session was chaired by Julia Klöckner, the Federal Minister of Food and Agriculture of Germany, who has presented the Work programme of the German Council Presidency.

Nota bene: The Agriculture and Fisheries Council took place before the conclusion made by the EU heads of state & government on the deal on the Multi-annual Financial Framework (MFF) & the post-pandemic stimulus package for the EU-27.

The Minister has underlined that their main aim will be to have a proper coordinated response to the challenges rising from the COVID-19 crisis for a sustainable economic recovery and social cohesion. The German Council Presidency also wishes to make sure that by October 2020 they can have a general approach in the Council for the CAP.

(For details regarding the German Council Presidency’s program and priorities, see email of 17 July: “ComAgri & ComEnvi 15-16 June – Exchange of views on the priorities of the German Presidency “).   

The agenda of the meeting first went on with an exchange of views on the Farm to Fork Strategy and then on the post 2020 CAP reform package (9463/20), where the debate focused on the green architecture of the CAP. Regarding the F2F and the debate on the green architecture of the future CAP, the Presidency put forward both times three questions to the Member States’ Ministers.

During the debate in the latter discussion, the Czech delegation informed the Council on a joint declaration by the Visegrad Group plus Bulgaria and Romania on the Reform of the Common Agricultural Policy in the light of the European Green Deal, the “Farm to Fork” and “Biodiversity” Strategies and the COVID-19 pandemic (9591/20). They stressed the need for a properly funded CAP and wished to adopt the Reform as quickly as possible to make a case for a sufficiently long transitional period of at least two years.

Finally, the European Commission has presented and held an exchange of views on a report on the market situation in the main agricultural sectors amid to COVID-19 crisis (9599/20).

 

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Wine sector: Commission adopts new exceptional support measures

Wine news continues to be marked in this July by the effects of Covid-19 pandemic. The European Commission adopted an additional package of exceptional measures to support the wine sector, including the temporary authorisation for operators to self-organise market measures, the increase of the European Union’s contribution for wine national support programmes.

 

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CAP Budget 2021-2027 : In response to the crisis, meet more challenges with less budget

Loss of 40 billion in constant euros, Maintained in current euros,
Less for the recovery, 40% of the budget to be oriented on climate & environment

 21 July 2020

After a 4-day marathon European Council, the Heads of State and Government gave the European Union a budget of €1074.3 billion for the period (in 2018 constant euros) reinforced by a recovery budget of €750 billion (€390 billion in grants and €360 billion in loans).

For the CAP, the agreed budget amounts to €258.594 billion (in 2018 constant euros) for the 1st Pillar and €77.85 billion for the 2nd Pillar. Under the recovery budget, €7.5 billion will be added to the 2nd Pillar budget.

In total, €343.95 billion (2018) will finance CAP actions over the next 7 years.

If in current euros, and assuming inflation at 2%/year over the period, the CAP 2021-2027 budget is broadly stable compared to the previous period (2014-2020); expressed in 2018 constant euros, it is down by €39 billion (-10.2%), i.e. slightly more than a full year of first pillar aid.

A little less than half of this decrease can be linked to the cost of Brexit for the CAP, the UK was a net funder of the CAP for about €2.7 billion/year.

Therefore, including the recovery plan, European farmers are being asked to finance some €20 billion of other European policies.

Compared to the Commission’s latest proposals, the budget for the first pillar remains more or less the same, the budget for the second pillar increases by €2.8 billion over the period, but the allocation for the recovery is halved, from €15 billion to only €7.5 billion.

The use of the remaining €7.5 billion is not subject to any particular guidelines from the Heads of State. The negotiations linked to the Omnibus Recovery package will be crucial to ensure that recovery actions are more targeted and relevant as the envelope is constrained.

In the context of a decreasing budget, and even more so for the 2nd pillar, the distribution of the €77.85 billion of the latter provides additional allocations at the rate of 100 million for Belgium, 650 for Germany, 300 for Ireland, 300 for Greece, 500 for Spain, 1 600 for France, 100 for Croatia, 500 for Italy, 50 for Cyprus, 250 for Austria, 200 for Slovakia, 300 for Portugal and 400 for Finland.

In addition, the European Council defined, in parallel with the CAP budget, certain parameters for the future CAP reform which will apply from 2023 (and until 2027):

  • While 30% of the European budget (including recovery) is to be linked to climate actions, a target of 40% is set for the CAP as a whole. However, no direction is given to the green architecture of the new CAP (unlike in 2013 where the European Council had clarified what greening should be).
  • Convergence of direct payments levels between Member States: over the period, 50% of the gap to 90% of the EU average will have to be closed, with aid/ha not falling below national averages in the EU of €200/ha in 2022 and €215/ha in 2027.
  • The capping of direct payments will be done on a voluntary basis at a possible level of EUR 100 000 of basic direct payments per beneficiary, whereby wage costs can be excluded.
  • The crisis reserve will have to be endowed with €450 million (in current euros) at the beginning of each year and will be fed primarily by clearances, budgetary margins and, as a last resort, by financial discipline. Unspent amounts will be transferred from one year to the next, with no increase in the reserve beyond the €450 million. It should be noted that this amount is lower than the current reserve (480 million in current euros) and that its capped mechanism already undermines the credibility of its action.
  • Budget transfers from the 1st pillar to the 2nd pillar will be up to 42% at the choice of the Member States, with 25% to finance any action chosen from the 2nd pillar, 15% to finance only environmental actions and 2% for measures in favour of young farmers.
  • Transfers from the second pillar to the first pillar may be up to 25% and may be increased to 30% for Member States whose direct aid is less than 90% of the European average.
  • The maximum basic European co-financing for 2nd pillar measures is set at 43%, 10 points lower than at present. It is 80% for the outermost regions and 85% for less developed regions. For environmental measures, non-productive investments, EIP and Leader actions, it may be as high as 80%. For measures financed via a budget transfer from the first to the second pillar, EU co-financing may be up to 100%.

CAP reform negotiations: Comenvi withdrawal & agreement on the transitional regulation

The month of June was marked by the following events:

  • At the level of the European Parliament, ComEnvi has decided to withdraw from the ongoing joint AGRI-ENVI work on the CAP Strategic Plan Regulation. On the other hand, on the work of the “Farm to Fork” Strategy the two committees will work together, with Anja Hazekamp (GUE-NGL for ComEnvi) and Herbert Dorfmann (EPP for ComAgri) being the appointed rapporteurs.
  • The co-legislators reached an agreement on the transitional regulation, including a period – extended to two years, despite the Commission‘s reluctance. The latter initially threatened to withdraw its proposal for a regulation and has since been looking for ways to insert into this regulation or via the “recovery” omnibus a means of communicating on 40% of the CAP budget devoted to the environment in 2022.
  • The Council has met twice. Delegations pointed out the need for a budget that meets the requirements of the F2F and Biodiversity strategies of the Green Deal, as well as the need to take into account the sustainability efforts already undertaken in the Member States and the diversity of starting points. The German Presidency succeeds the Croatian Presidency, while important work remains to be undertaken on the new governance model and green architecture.

full note available on FE Members’ area 

Negotiations for the EU Budget: Commission unveils 2021 budget & disagreement confirmed at the European Council

The month of June was marked by the persistence and confirmation of the divergences between Member States on the future MFF and the associated Recovery Plan, notably on the size of the envelope but also on rebates and the ratio between loans and grants.

ComAgri members welcomed the proposal for an upgraded MFF (in current euros) compared to the Commission’s 2018 proposal, despite the decline in constant euros.

full note available on FE Members’ area