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Common Agricultural Policy

In November 2017 the European Commission put out a Communication outlining their early proposals for the future direction of the Common Agricultural Policy. Whilst it opened by praising EU agriculture as one of the world’s leading producers of food and one that guarantees food security for over 500 million Europeans, it swiftly moved on to say EU farmers are “the first steward of the natural environment.”

It acknowledged that high standards and high production costs mean EU agriculture has low profitability, and the role of direct payments will be further examined as it is well known the 2013 greening measures were an onerous administrative burden that were of limited effectiveness. In an echo of the current Defra mantra of leaving the environment in a better condition than we found it, the Communication states direct payments should ensure farmed areas are managed “with practices beneficial to the environment.”

The remit of the CAP seems to be ever expanding, and unsurprisingly given that the policy is the major recipient of EU funds, expectations are high that its impact will be wide ranging. Commission priorities include stimulating investment and creating jobs, and bringing down barriers to unlock online opportunities, so the Communication shows how it is in line with this aim by “bringing research and innovation out of the labs and onto the fields” and “fully connecting farmers and the countryside to the digital economy”. The strong environmental ambitions are a common theme, and it notably states the CAP should address citizens’ concerns around sustainable agricultural production, including resource efficiency, environmental care and climate action.

Though early on in the process, one of the defining features of this Common Agricultural Policy is that it will no longer be particularly ‘common’. In recognition of the huge variation in needs across the Member States, and greater speed needed to respond to challenges, it proposes that the European Union plan basic policy parameters (such as objectives of the CAP) and the Member States bear greater responsibility and accountability for how the objectives are met through locally tailored efforts.

Direct payments are called “essential” but it is recognised than the system needs adjustment and both capping of payments and reducing support for large farms over time are mentioned. The area of risk management will be closely examined, and farmer awareness needs to be improved around the options for risk management and agricultural insurance. Though direct payments and post-crises compensations are some examples of current approaches, it is made clear the industry needs to take more responsibility for planning for risk, and there is a strong role for private involvement not just public.

The ageing farming population remains a problem, and the Communication suggests Member States should take more local action to assist young farmers, including financial instruments to help them invest. Improved knowledge transfer is also seen as a significant priority in order to improve output and practices. The Communication again recognises some agricultural sectors would not survive in an environment of full trade liberalisation, and that such products need to be taken into account in trade negotiations.

What is left of these ideas once the full procedure for getting support for CAP proposals through and approved for 2020 remains to be seen. The impact they will have on the UK though could be significant, as to whether the UK seeks to merge with EU practices in future or capitalise on this time to diverge. However, the direction of travel of an increasing focus on the environment by the EU will come as a surprise to no one, and is unlikely to be deviated from by the UK. With the UK Agriculture Bill due to start the process of reshaping how farming and environmental management will look for decade to come, it is worth keeping an eye on what is being decided in Brussels over coming years and to see how much of the thinking is mirrored (perhaps in gold plate?) in UK policy.