France: CAP Strategic Plan 2023-27
The French NSP seeks to improve the sustainable competitiveness of the agriculture sectors, the creation of value, the resilience of farms and the sobriety of inputs in the service of food security.
Basic income support will be distributed to beneficiaries with payment entitlements in a more equitable manner, with a progressive convergence reaching 90% by 2026. France has chosen to target support to sectors in difficulty, which are essential to the resilience of the territories. Thus, 15% of direct payments are devoted to coupled aids, mainly in the livestock sector, as well as a significant increase in the envelope devoted to protein crops to increase the autonomy. The ICHN is maintained and remains targeted on the productions most adapted to territories with handicaps, including mountains, namely grassland breeding.
In terms of the environment, the NSP is in line with European trajectories. It will represent 25% of direct aid as of 2023 and environmental expenditure in the 2nd pillar will exceed 40%. The environmental architecture aims to reduce the specialization and intensification of production, by encouraging diversification of crop production and the search for synergies between livestock and crops, favorable to resilience and sobriety in inputs. Reinforced cross-compliance and the eco-regime aim at a large-scale implementation of practices favorable to climate control, protection of natural resources and biodiversity.
At the territorial and social level, to meet the challenge of generational renewal, the funds dedicated to the installation of young farmers are strengthened, with a total of just over €200 millions mobilized for support dedicated to young farmers on both pillars.
The green architecture
Eco-schemes are new schemes that will account for at least 25 percent of the total allocation of Pillar I support. Eco-schemes impose practices on farmers that go beyond cross-compliance requirements, which already include green payment criteria, and thus correspond to a higher level of environmental ambition than the current green payment.
In French NSP, 1.684 billion per year (8.420 billion for the entire 2023-2027 programming period) are allocated for the eco-scheme.
The eco-scheme as conceived in the French NSP is intended to support as many farmers as possible in their transition, with the aim of massively increasing agro-ecological practices throughout the country, in an inclusive system.
The aid is a decoupled payment of a fixed amount at the national level paid on all eligible hectares of the farm and is divided into three non-cumulative access channels and a supplement (“hedge bonus”) that can be cumulated with the access channel for practices or environmental certification:
– the “practices” pathway is for farmers who commit to agroecological practices on all areas of the farm that are conducive to pesticide reduction, biodiversity and carbon storage. The requirements in terms of practices are different for arable crops, permanent grassland and perennial crops and must be applied to the entire area of the farm;
– the “environmental certification” pathway is aimed at farmers whose entire farm is certified as Organic or as High Environmental Value (HVE);
– the “biodiversity-friendly elements” pathway targets farmers who maintain or create agro-ecological infrastructure or set aside land on their farms;
– the “hedge bonus” remunerates the presence of hedges and their sustainable management; this bonus can be combined with the practices or the certification pathway, allowing to improve the overall effect on biodiversity (association of hedges and crop mosaic, or hedges and grasslands, or hedges and biological land management). The presence of hedges is associated with a requirement for sustainable management of these hedges verified by a certification (e.g. the existing “Label Haie”).
There are two levels of requirements for each of the access routes: a basic level and a higher level for farmers who engage in more ambitious practices.
In addition to the eco-scheme, green architecture is based on Pillar II environmental measures, specifically agri-environmental and climate commitments (AECMs) and support for conversion to organic farming. Most of the AECMs need to be adapted at the local level. The level of ambition pursued by these measures is higher than that required in the practices of eco-scheme.
The budget for agri-environmental and climate measures is increased by +10 M€ to reach 260 M€ on average per year (compared to 250 M€ paid in 2019 and 2020).
The French NSP will contribute to the achievement of a target of at least 18% of French UAA in organic farming by 2027, i.e., nearly 4.8 million hectares of agricultural land, with the ambition of reaching the 25% targeted at the European level by 2030.
To support this doubling of organic farming areas by 2027, an average of €340 million per year will be devoted to aid for conversion to organic farming which corresponds to an increase of €90 million per year compared to the €250 million per year paid in 2019 and 2020, which covered not only aid for conversion (€220 million) but also aid for maintenance (€30 million).
In order to take into account the challenges and difficulties faced by certain sectors and to support the increase in areas cultivated with protein crops, with the objective of improving the protein autonomy of the French farm and thus reducing the dependence on protein imports, in particular soy, France devotes 15% of its direct aid to coupled aid, i.e. 5 billion euros.
The budget devoted to coupled aid for plant proteins will increase by 15% as of 2023 (reaching 2.3% of direct payments) and then grow each year by 0.3% until it reaches a budget of €236.8 million in 2027, an increase of 75% (3.5% of direct payments). Over the whole of the future programming period, an additional €100 million will therefore be devoted to coupled aid for plant proteins compared to the current programming period.
Coupled support will go to: sheep; sheep for new producers; goats; cattle; calves under the mother’s milk; grain legumes and dehydrated fodder legumes or for seed production; fodder legumes in lowland and piedmont areas; fodder legumes in mountain areas; durum wheat; starch potato; rice; hop; grass seed; hemp; Ente plums for processing; Bigarreau cherries for processing; Williams pears for processing; Pavie peaches for processing; veg farming; tomatoes for processing; small ruminants in Corsica; cattle in Corsica.
Support for risk management tools under the NSP is part of a dual perspective of continuity with 2014-2022 programming and strengthening of existing tools.
Regarding climate risks, the NSP strengthens support for multi-risk crop insurance, with the aim of covering more farms and a larger agricultural area against these risks by 2027. The scheme is expected to increase from €156 million in EAFRD funding in 2023 to nearly €216 million in 2027, in anticipation of an increase in the number of insurance contracts in the coming years.
The agricultural catastrophe scheme, a national solidarity instrument that covers climate risks considered uninsurable, will be profoundly revamped to allow for better coordination of the various instruments to compensate for losses caused by climate risks.
Thus, the French government drafted a bill at the end of 2021 on the reform of multi-hazard climate insurance and the revision of the agricultural disaster system. This law is based on the principle of a three-tier risk management architecture (low, moderate and catastrophic). Moderate risks will be covered by the insurance system, whose contribution is still expected to be partially covered by the PSN, while catastrophic risks will be covered by national solidarity, paid by the State. To make it easier for the farmer to take on the risk, a one-stop shop for compensation is planned, regardless of the source of coverage.
To encourage as many farmers as possible to take out insurance, compensation will be higher for insured farmers than for uninsured ones. In addition, the new system is expected to generate better protection against risks and adaptation to climate change on farms, particularly by developing individualized insurance pricing that takes into account the means of protection used by the farmer, and by providing strong incentives to propose and deploy insurance contracts with a deductible at the farm level, which will encourage more diversified, and therefore more resilient and cheaper farms in terms of inputs.
With regard to health risks and environmental incidents, support for the National Agricultural Fund for the Mutualization of Health and Environmental Risks (FMSE), created in 2013, in the absence of an insurance market comparable to the one that exists for climate risks, will be continued, with potential changes related to the evolution of the categorization of health and phytosanitary risks at the European and national levels, the emergence of new diseases, and the articulation between state and fund intervention. Thus, the NSP provides for the mobilization of the EAFRD up to 1.5 million euros per year to finance compensation for losses that can be covered within this framework.
Regarding income risks, an experiment of a common fund covering income variations (income stabilization tool) will be launched by the Grand-East region for the sugar beet sector. It should make it possible to appreciate for the first time the operation of a risk management tool that compensates for variations in margin, whether attributable to a climatic, health or environmental event or a change in the market. The Region has planned to dedicate 2 million euros of EAFRD funds to this project each year.
The NSP reinforces the targeting effort undertaken in the current programming, by providing additional income support for young farmers up to 1.5% of the direct payment envelope (€101 million), compared to 1% today. This additional support represents half of the total effort requested of 3% of the NSP for young farmers.
In order to no longer link this payment to the area of the installation and to no longer support installations on the largest exploited areas more than others, the additional income support for young farmers will now intervene in the form of a uniform flat-rate amount per farm (with the application of GAEC transparency), and always for a maximum support period of 5 years. The programmed amount of the lump sum is around 3885€ per farm per year, leading to a total of cumulated support over 5 years that should reach more than 19 400€ for beneficiaries between 2023 and 2027, compared to a cumulated amount of 12 500€ for 80% of beneficiaries between 2015 and 2020.
The convergence choices will allow France to reach, via two successive stages in 2023 and 2025, more than 85% internal convergence of basic decoupled aid to income in 2026. In 2023, an intermediate ceiling will be introduced to fully finance a floor at 70% of the average value of 2023 entitlements; this ceiling should be around €1350 (value to be confirmed based on the actual situation in 2023). In 2025, the ceiling will be lowered to 1000€ per PBO and a floor of 85% of the target value will be introduced. Entitlements above the 2026 target value (evaluated at €129 in 2026) will be subject to a reduction of 50% of the difference with respect to this target value. However, in order not to destabilize farms that still benefit from a payment value per hectare that is much higher than the average value, in geographical areas and with very specific production models, sometimes intensive in terms of employment, a ceiling on individual losses greater than 30% has been introduced. However, this limitation of losses cannot lead to a payment right exceeding the ceiling value of 1000€.
Thus, 96% of farms will benefit, from 2026 onwards, from payment rights between +/-10% of the average value (compared to 69% in 2019 and 29% in 2015). In other words, no farm should have payment entitlements whose value is less than 90% of the average (compared to 41% in 2015 and 21% in 2019), and 4% of farmers will retain payment entitlements whose value is greater than 110% of the average (compared to 10% in 2019 and 30% in 2015).
Pillar 2: Funding Allocation and Priorities
Thanks to the transfer of €2.742 billion from Pillar I to Pillar II (7,53%), France can count on €10 billion in the FEADER fund for the entire 2023-2027 programming period.
A large part of this budget, as much as 3.586 billion, is dedicated to the compensatory allowance for permanent natural handicaps (ICHN) as it plays an important role in reducing income disparities between territories. The ICHN is mainly targeted at livestock farming, and is aimed in particular at the most extensive farms by maintaining appropriate stocking rate ranges, corresponding to resilient, more autonomous livestock farming and a source of important environmental amenities: maintenance of permanent grasslands, maintenance of conditions favorable to biodiversity, carbon capture and well-being of the animals grazing there.
Despite the reduction in the EAFRD funding rate provided for in the strategic plan regulation for this measure (65% of EAFRD mobilizable in 2023-2027 vs. 75% in 2015-2022), France guarantees to maintain the total envelope at €1.1 billion and undertakes to cover the additional cost of €100 million induced by the change in funding rate. The EAFRD thus freed up will make it possible to finance the increase in the budget for conversion to organic farming.
Indeed, the FEADER resources for organic farming amount to a total of 980 million, leaving 1.832 billion for investments and 988 million for agro-environmental climate measures (AECMs).