Production norms: meaning, multiplication as well as red tape issues

One of the causes of farmers’ distress often mentioned in protests in recent days is the excessive bureaucracy they have to deal with to access CAP funds. Farmers feel that Brussels dictates to farmers how to cultivate and raise livestock. This feeling is certainly well-grounded considering recent policy developments both at EU and national levels. There are many reasons for this, but not all of them can be blamed on the CAP as such, and all of them call for real political will to be overcome.

First of all, it should be pointed out that, of course, the European budget for the Common Agricultural Policy is very significant. Therefore, it requires appropriate controls and guarantees to ensure responsible use of public money and to minimise the risk of fraud. Each European fund requires management and control costs, and those of the CAP are no higher than those of other European funds. For the administrative bodies, total annual administrative costs are estimated at around 3% of the CAP budget. For farmers, the share of administrative costs corresponds to around 2% of internal costs.

However, it’s also true that the last CAP reform increased bureaucracy with the introduction of green measures – particularly when it comes to the compliance with the definitions of Ecological Focused Areas (EFAs). For Member State administrations, this is main lever for the increased costs of complying with control requirements and mapping these areas. For farmers, this is linked to the correct declaration of EFAs (length of declaration, location and accuracy of dimensions) and to the increased number of auditing checks on farms.

This increasing complexity has accelerated with the latest reform of the Common Agricultural Policy. The eco-regimes introduced since 2023 are not simply a recognition of the environmental benefits of certain agricultural practices. They also entail adaptation costs, some of them substantial. This trend is made all the more difficult for farmers by the fact that CAP funds have shrunk in real economic terms: between 2003 and 2023, the European CAP envelope lost 40% of its value.

Weaker funding, harder to collect

With regard to the current CAP, which came into force on January 1, 2023, it is of course too early to quantify the impact on the bureaucratic burden for farmers. It’s normal that an implementation phase generates a considerable adjustment period. While, for administrations, the introduction of eco-regimes and the tightening of cross-compliance requirements have certainly represented a considerable increase in bureaucracy, at least in the initial phase, for farmers, the constant change of rules is in itself a major problem, associated with permanent stress that explains at least part of farmers’ resentment of the bureaucratic burden. For them, the additional administrative demands are real and lasting if nothing is done to lighten the load.

In addition, the bureaucracy that farmers have to deal with is not only linked to the European aspect of the CAP; in certain cases, it is a question of national requirements which are added by choice of the Member State to the conditions to be met in order to receive European funds. This trend has been reinforced under the New Delivery Model of the CAP. A significant share of the rules are under the responsibility of the Member States themselves, as part of their strategic plans, approved by the Euroepan Commission, but drafted at national level.

Given that national authorities manage CAP payments, it is no possible for farmers to distinguish between European and local administrative requirements. The level of implementation and the different Member States’ governance (centralized or regional) make bureaucratic demands on farmers unequal across the EU. However, one conclusion can already be drawn: transferring rules to Member State level is no guarantee of simplification, and it comes with a detrimental collateral effect, by undermining the level playing field on the internal market, generating unfair competition from one country to another.

All considered, there are concrete solutions to simplify this framework, and Farm Europe suggested some of them already in 2019.

• In order to substantially simplify the administrative burdens of the CAP and national strategic plans, it is feasible to limit rules and associated audits to the most ambitious ones. When a farmer implements an eco-scheme, which is by nature more ambitious and more effective than the basic requirement (cross compliance) associated with direct payments, it should be considered that his efforts is higher than the cross-compliance rules by definition. As a consequence he should no longer be audited for the cross compliance itself. This would be an automatic equivalence measure, guaranteeing considerable simplification without any loss of ambition of the CAP. On the contrary, it would reinforce the attractiveness of eco-schemes, and thus support farmers in positive transitional steps.

• In addition, a working group should be set up within the Council, made up by agricultural experts from each member state to ensure that the rules for implementing the Common Agricultural Policy are as simple as possible, and that they do not generate distortions of competition. In this respect, structured exchanges of best practices between member states should be encouraged, in order to ensure that each of the cross-compliance rules is subject to an equivalent level of ambition, consistent with the diversity of agronomic situations.

• Finally, as part of the current debate on simplification of the rules, Member States should be allowed to revise their national strategic plans with a view to simplifying eligibility conditions as early as 2024. The European Commission should undertake to approve these revised national strategic plans as soon as possible.

In any case, it is more the meaning of the measures, the multiplication of rules, sometimes contradictory, than the administrative problems as such that seem to pose the problem.

Pursuing administrative simplification and streamlining

For a sample of farmers surveyed as part of the European Commission’s study (1), the median time spent on CAP-related administrative activities is 15 hours per year. This figure includes all time spent on administrative activities by the farmer, potential family members or paid workers. But this time varies considerably if we take farmers from different member states.

The possibility to rely on external assistance also has a significant impact on the time farmers spend on paperwork. In the same sample, 43% of farmers used external assistance (payed) for aid-related administrative tasks. This help is often provided by cooperatives or professional organizations and, to a lesser extent, by banks or other service providers. These services are often covered by cooperative membership fees or included in bank charges. Recourse to this solution is more widespread in Italy, Spain and Sweden, where requests for help are rarely made internally. By contrast, less than 30% of farmers surveyed in Malta, France, the Netherlands, Germany and Estonia do so.

The level of digitalization in the various member states also has a major impact on the simplification of paperwork – since the last reform, the digitization of procedures has been widespread. Automation, digitization and the use of new technologies for CAP management and controls should not only create benefits for the future, but have already proven to do so.

This study mentioned above estimates that the costs incurred by administrations for greening represent one of the main items of expenditure in the management and control of direct payments. However, the situation varies greatly from one Member State to another, with smaller Member States incurring higher costs than larger ones. For farms, the situation also varies according to labor costs in the different Member States. Indeed, processing applications and carrying out on-the-spot checks requires significant labor costs.

The EAFRD (Rural Development Fund) is a fund with a relatively high administrative burden due to the type, size, variety and conditionality of its interventions. Errors add an extra burden and cost for farmers and businesses, as well as for public administrations. When such errors occur, additional clarifications and data exchanges are required.

In 2017, the Omnibus Regulation already included a proposal to further simplify the four CAP regulations for the benefit of farmers and national authorities. However, it is necessary to do more.

Proposals:

• Working on the meaning of the rules and the coherence between them
• Considering farmers automatically eligible for basic cross-compliance rules as soon as they enter more ambitious programs (eco-regimes).
• Preserving competition on the internal market by avoiding national rules that put farmers in one country at a disadvantage compared to another, by setting up a working group within the Council involving the farming world and the institutions.
• Opening up the possibility for all member states to simplify the rules initially put in place in national strategic plans as of 2024.