Beth Metson Blog
May 13, 2013
Looking into the CAP crystal ball
Up until now I have avoided the Common Agricultural Policy subject like the plague, my opinion was, unless I know definitively what is going to be put upon us, why make assumptions. However we are starting to get a feel for where we are going with it and after getting along to some informative events, attending webinars and speaking to those at the policy end I have put together a summary of my findings.
The Common Agricultural Policy affects 45% of land across Europe, it makes up 40% of EU budget and it goes beyond agriculture to industries such as forestry.
As we know the CAP reform is not likely to be complete until 2015 at the earliest, which is delayed from 2014. This gap means there are some transitional issues to think about. Climate change, food security and the sustainable use of natural resources have all encouraged the need for a reform of this magnitude.
Going forward the CAP will become more outcome focused. It will be aiming to help achieve policy and legislative targets more than it is has ever done previously. In particular the CAP objectives will be driven by directives that focus on water, soil, biodiversity, climate change and historical landscape and archaeology. It is considered that agriculture has a big role to play in achieving set policy targets.
Pillar 1 – EU want more bang for their buck
To remind ourselves, Pillar 1 and 2 are funding pots. Pillar 1 is the pot that deals with the wider audience, it is currently where Cross Compliance sits, this is solely EU funded and therefore notoriously less flexible. Pillar 2 is more flexible as it is made up of member state funds too; this is where current agri-environment scheme payments and RDPE grant funding originate.
It is widely accepted that Cross Compliance has not been as successful as hoped. Therefore compulsory greening options are being considered, these are likely to include ecological focus areas, crop diversification and permanent grassland. These will potentially have direct payment implications attached to them.
There is no definitive figure yet in terms of the funding implications for these but it is likely to be in the region of 30% of the direct payment paid to growers. The discussions at the moment are around whether growers will be able to opt out of these compulsory options and therefore forego this 30% of their payment. For what it is worth at current payments that could be valued at approximately £70/ha.
Pillar 2 – Less money but ambitious environmental aims
Pillar 2 is likely to see a larger reduction in budget than Pillar 1. This will inevitably encourage the need to further develop successful partnerships already in the industry. This will help to achieve ambitious environmental outcomes desired particularly around policy targets and landscape scale coordination. One key example of this growers will be most familiar with is the water catchment scale approach.
Over the past few years we have seen many water companies increase their involvement in partnerships with government organisations to control diffuse water pollution from agriculture. This example of partnership working will help to achieve environmental and policy (Water Framework Directive) outcomes. There is a recognition that these relationships need to be further exploited and formed to efficiently and effectively achieve environmental outcomes.
There is an encouragement for large scale digitalisation of all CAP related applications, the implications of this are currently being considered.
Advice, training and skills development for land managers is seen as key to achieving the environmental outcomes desired from the CAP. It has been recognised growers need to know why they are undertaking options in agri-environment schemes in order to manage them correctly and achieve their aims. Current agri-environment schemes are too complex, prescribed and the desired outcomes are not spelt out for all to understand, this is likely to change.
Agri-Environment Schemes and the gap – Pillar 2
New Agri-Environment (AE) schemes are being designed at the moment taking into consideration policy objectives and lessons learnt from the current and old schemes. Capital works options are likely to feature and be available on a wider scale, subject to review of these options particularly those currently available under the CSF banner. New AE schemes aim to be launched in 2015 ready to begin January 2016. From January 2016 there will be a single uniform annual start date for these.
There is a concern with regard to the gap between December 2013, when the last of the AE agreements can be accepted and commence, and January 2016, the next available time agreements can be implemented. This gap is not good for the environment or farmers. It will affect those AE agreements that are coming to an end during 2014/15.
In terms of ELS, there are 2219 (185,000 ha) agreements expiring in 2014 and 12,000 (1.38m ha) in 2015. Negotiations are currently happening to decide what to do about this situation to avoid undervaluing and in some cases losing the environmental benefits of AE agreements coming to an end in 2014/15…watch this space.
You can email Beth your comments and opinions via email@example.com.