Consistent Reform of the EU Agricultural Policy Now

Transcription

1 Consistent Reform of the EU Agricultural Policy Now Opinion on the Communication from the EU Commission of Nov. 18, 2010 entitled The CAP towards 2020: Meeting the food, natural resources and territorial challenges of the future and Proposals for the EU Commission s legislative proposals on the reform of the European Union s Common Agricultural Policy (CAP) Joint paper by associations engaged in environmental protection, nature conservation, agriculture, development policy, consumer affairs and animal welfare. June 2011

2 Consistent Reform of the EU Agricultural Policy Now German Platform Juni 2011 Imprint This platform was jointly developed by the undersigned associations, coordinated by the Arbeitsgemeinschaft bäuerliche Landwirtschaft (AbL) and the EuroNatur Stiftung. Rheinbach/Hamm, Juni 2011 EuroNatur Stiftung Europäisches Naturerbe Grabenstraße 23 D Rheinbach / Bonn Tel.: , Fax: lutz.ribbe@euronatur.org Arbeitsgemeinschaft bäuerliche Landwirtschaft e.v. (AbL) Bahnhofstraße 31 D Hamm/Westf. Tel.: , Fax: jasper@abl-ev.de 2

3 German Plattform Juni 2011 Consistent Reform of the EU Agricultural Policy Now Consistent Reform of the EU Agricultural Policy Now Opinion on the Communication from the EU Commission of Nov. 18, 2010 entitled The CAP towards 2020: Meeting the food, natural resources and territorial challenges of the future and Proposals for the EU Commission s legislative proposals on the reform of the European Union s Common Agricultural Policy (CAP) Signatories: Agrar Koordination - Forum für internationale Agrarpolitik e.v. Arbeitsgemeinschaft bäuerliche Landwirtschaft e.v. (AbL) Assoziation Ökologischer Lebensmittelhersteller (AoeL) Biokreis e.v. Bioland e.v. Brot für die Welt Bund für Umwelt und Naturschutz Deutschland e.v. (BUND) Bund Naturschutz in Bayern e.v. (BN) Campact Demeter e.v. Deutscher Naturschutzring e.v. (DNR) Deutscher Tierschutzbund e.v. Deutscher Verband für Landschaftspflege e.v. (DVL) EuroNatur Stiftung Evangelischer Entwicklungsdienst (eed) FIAN Deutschland e.v. Germanwatch e.v. Industriegewerkschaft Bauen-Agrar-Umwelt (IG BAU) Misereor NaturFreunde Deutschlands e.v. Naturland Naturschutzbund Deutschland e.v. (NABU) Neuland e.v. Schweisfurth-Stiftung Slow Food Deutschland e.v. Verband Deutscher Naturparke e.v. (VDN) Verband Entwicklungspolitik Niedersachsen e.v. (VEN) WWF Deutschland Zukunftsstiftung Landwirtschaft (ZSL) 3

4 Consistent Reform of the EU Agricultural Policy Now German Platform Juni 2011 Table of Contents 1. Introduction Assessment of the Commission s Communication Environmental and social qualifiers for direct payments EU rural development policy Responsibility for development policy the Commission s blind spot Proposals for environmental and social coherence of the entire CAP Direct payments must yield environmental and social benefits Environmental requirements for the receipt of direct payments Social requirements for the receipt of direct payments Cross Compliance: Get rid of red tape Strengthen future-oriented measures under the second pillar Align investment aid with societal expectations Strengthen integrated rural development strategies Support for less-favoured areas and compensation for special regulatory requirements (Natura 2000 sites, nature reserves, water protection areas) Simplify administration Assume international responsibilities Summary Environmental and social qualifiers for direct payments Strengthening of future-oriented support measures under the second pillar Recognize and actively assume international responsibilities

5 German Plattform Juni 2011 Consistent Reform of the EU Agricultural Policy Now 1. Introduction The European Union s Common Agricultural Policy (CAP) is currently once again under review. On Nov. 18, 2010 the EU Commission published its Communication entitled The CAP towards 2020 in which initial proposals for the orientation of the coming CAP reform are outlined. 1) In its Communication, the Commission has in some instances taken on board proposals presented by the platform associations in their joint paper of April 2010 entitled For a fundamental reform of the EU Agricultural Policy. 2) This is true, in particular, with regard to the link between direct payments and environmental and socio-economic criteria or the provision of public goods. Other calls made by the associations have not or not sufficiently been taken into account in the Commission s Communication. For example, the Communication does not make reference to environmental and social responsibilities of the EU agricultural policy in the international context, despite the great dependence of the European agricultural and food sectors on feed imports on the one hand, and the EU s role as the world s biggest exporter of foods on the other. In terms of framework conditions for the EU internal market, the Commission does aim at a strengthening of the farmers bargaining position in the food chain and makes reference to the milk market proposals and to quality policy (labelling), but apart from that concrete proposals are lacking. With their present paper, the German platform associations do not only react to the EU Commission s Communication. With these latest proposals, the associations wish to contribute to the development of legislative proposals by the EU Commission which are expected to be published around October 2011, and to shaping opinion in the European Parliament, the upper and lower houses of the German Parliament, the German Federal Government and the federal states. Last but not least this paper is also intended to contribute to the public discussion on the pending reform of the EU agricultural policy and to demonstrate both the urgent need for change and existing possibilities to simply and effectively instigate such change. 2. Assessment of the Commission s Communication In its Communication on The CAP towards 2020, which is as yet framed in general terms, the Commission places a clear emphasis on using fiscal resources provided for the Common Agricultural Policy (CAP) in a more targeted manner and thus more efficiently than at present. The focus is on direct payments made by the EU to farms which are currently in the order of EUR 40 billion Euro per year, i.e. the single biggest budgetary item of the CAP 3) The EU Agriculture Commissioner, Dacian Ciolos, stated that the distribution of CAP funds needed to be greener and fairer when he presented the Commission s proposals. 1) European Commission, 18 November 2010, COM(2010) 672 final, Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions. The CAP towards 2020: Meeting the food, natural resources and territorial challenges of the future. 2) Joint paper by the associations, April 2010, For a fundamental reform of the EU Agricultural Policy. Rheinbach/Hamm, April ) For 2013, direct payments of 46 billion Euro are envisaged as part of a total EU agriculture budget of about 60 billion Euro. 5

6 Consistent Reform of the EU Agricultural Policy Now German Platform Juni Environmental and social qualifiers for direct payments The Commission envisages that the direct payments under the first pillar will contain a mandatory greening component in the form of simple, environmental minimum requirements that are applicable across the whole of the EU territory and go beyond statutory management requirements. Moreover, the Commission plans to introduce more equity in the distribution of direct payments, both between Member States and between farmers. Examples of such environmental measures ( greening ) given by the Commission include the preservation of permanent pasture, green cover / winter green cover for arable land, crop rotation and ecological set-aside. With a view to more equitable distribution of income between farmers, the Commission proposes to introduce an upper ceiling on part of the direct payments ( basic decoupled direct payment ) paid per holding and year, while disproportionate effects on large farms with high employment numbers could be mitigated by taking into account salaried labour intensity. The associations expressly welcome these proposals. This approach follows, in principle, some of the proposals made by the associations. The proposals are meaningful and can be implemented in an effective manner without compromising the conceptual autonomy of the second pillar or financially weakening the future-oriented measures of the second pillar. Effective environmental and social qualifiers for direct payments are necessary for a number of reasons: - The Common Agricultural Policy must provide effective incentives across the whole of the territory for agricultural practices that do not negatively impact the environment, biodiversity or the climate but instead foster these public goods, and that align livestock management with animal welfare requirements. This is also necessary to meet target-based agreements in these areas as concluded at EU level. - The current system of payment distribution is largely based on the holdings land base and in part still on past payment entitlements. The competition-distorting impact of these direct payments must end. Land ownership in itself, and rationalized production do not justify remuneration the provision of certain public goods arising from environmentally sustainable family farming methods do. As long as the payments include an income component, the labour force must be taken into account as a reference point. Income is generated by people, not by land. - Consistent environmental and socio-economic qualifiers for payments may also contribute to solving some of the development policy issues faced by the European agri-food sector. A more environmentally friendly agri-food sector that is less dependent on imports and resources will have less of a trade-distorting effect on the world market as artificially cheap exports will be reduced. However, the detailed design of the environmental and social qualifiers for direct payments will decide whether these will have the required impact. The Commission s Communication contains only vague indications in this regard which is why the associations make further proposals below. 6

7 German Plattform Juni 2011 Consistent Reform of the EU Agricultural Policy Now 2.2 EU rural development policy In its Communication, the Commission repeatedly emphasizes that one of the fundamental objectives of the Common Agricultural Policy should be to halt the greater concentration of agricultural production in some areas with particularly favourable conditions, using more intensive farming practices, while the less competitive areas would face marginalization and land abandonment. It is remarkable that the Commission does not assign this objective solely to the second pillar (rural development) as has often been the case to date. Evidently, here too the Commission is placing the onus on the entire CAP, a development much welcomed by the associations. However, the Commission s Communication contains few specific comments on the current second pillar of the CAP. The Commission announces that environment, climate change and innovation should be guiding themes that steer the policy more than ever before and states that for example, investments should lift both economic and environmental performance. But it is not clear whether this will mean that aid will be linked to compliance with mandatory requirements, as is called for by the associations, so that for example investment aid for livestock housing will only be paid if environmental and animal welfare standards are reached which go beyond the legal requirements. The associations welcome the fact that the Communication attaches particular importance to the development of direct sales and local markets as well as alternative distribution channels which add value to local resources. This is a positive way of looking at supporting the sector s (local and regional) competitiveness and market capacity. It would be desirable however to more clearly step back from the current system of investment aid which very strongly targets international competitiveness and which has drawn strong criticism from the associations. Concrete proposals should be incorporated into the legislative proposals; the Commission s Communication is rather vague in this respect. No support for insurance instruments The associations are strongly opposed to the Commission s proposal to include support for insurance instruments for crop insurance and farm income protection in the second pillar. Subsidized insurance is an incentive to reducing precautionary measures (e.g. choosing crops requiring less irrigation or choosing water-saving production methods). Support for insurance instruments would favour agriculturally advantaged areas and highly rationalized production, as those achieving high yields using high amounts of energy and resources profit to a greater extent from crop insurance and farm income protection than those achieving low yields. Support for insurance instruments thus distorts competition (including at the international level) in a similar way to the current EU price support mechanisms. Insurance instruments should continue to be purely private sector enterprises. 7

8 Consistent Reform of the EU Agricultural Policy Now German Platform Juni Responsibility for development policy the Commission s blind spot There are no indications in the passages of the Commission s Communication dealing with development and trade policy issues that the Commission recognizes and aims to actively assume the EU agricultural policy s responsibility for development policy. While the Commission promises to respect EU commitments in international trade and Policy Coherence for Development, this statement is contradicted by the Commission s conclusion that it is important to continue to enhance the competitiveness and productivity of the EU agriculture sector as a contribution to food security. The European Union s status as the worlds largest food exporter is facilitated by imported resources. The EU s need for agricultural lands outside of the Community (including c. 19 million hectares for the production of imported soy and protein feeds) is estimated to be in the order of 35 million hectares this is twice the utilized agricultural area of Germany. For this reason alone the Commission s reference to opportunit[ies] for EU food exporters is disconcerting. This world market orientation is also evident in the reform proposals on market measures. The Commission evidently aims at maintaining low prices for agricultural raw materials used in the European food industry in order to give this industry a competitive advantage at the international level. To this end, it is proposed to completely abolish the milk quota by 2015, without any consideration being given to new forms of quantitative regulation or stabilization in the internal market. Similarly, the Commission envisages a non-disruptive end of the sugar quota, to be examined after 2015, to bring about increased efficiency and greater competitiveness for the sector. Nowhere in its Communication does the Commission outline how it intends to implement the objective to stabilize markets as enshrined in Art. 39 of the Treaty. This is regrettable, as the new agricultural policy should not solely concentrate on re-organizing and legitimizing the distribution of funds within the agricultural sector. The increasing European food industry exports especially of animal products (milk products and meat, including inferior cuts of poultry and pork), but also of processed foods such as flour, baked goods, sweets, and instant soups hamper the urgently needed development of food processing industries in developing countries and make it more difficult for their local small farmers to access consumers with greater purchasing power in their own countries. Exports of directly or indirectly subsidized processed foods do not combat hunger but exacerbate it. Moreover, from our point of view it is completely unacceptable that the Commission plans to leave even the traditional dumping instruments untouched. In the July package WTO framework agreement, the EU had already signalled the phasing out of export subsidies for However, it now appears that export subsidies are not to be removed from the market organizations. Presumably they will be re-deployed in times of low world market prices. The Commission s reference to the important role that existing mechanisms play in supporting the market in times of crisis such as the 2009 dairy market crisis where export subsidies for milk products were re-invoked, seems to point in that direction. In 2009, the EU s whole milk powder exports to West Africa increased by 16 %. Other worrying proposals in this respect include the extension of the intervention period and the extension of private storage to other products. In the past, the stored products were often exported with the aid of export subsidies and have artificially depressed prices for agricultural commodities both internally and outside of the EU. From the development policy perspective, the issue of the massive soy imports demands special attention. More and more soy is being imported in order to increase production of animal products such as milk and meat. Most of this soy is not produced in an environmentally or socially sustainable manner. Already, three quarters of the protein feed used in European livestock production is grown outside of the EU, with the land area required for EU soy imports, 8

9 German Plattform Juni 2011 Consistent Reform of the EU Agricultural Policy Now i.e. 19 million hectares, exceeding the agricultural area of Germany. This increases international competition for land. The social and environmental standards imposed on EU farmers are disregarded when it comes to imports. A further problem is the fact that part of the added production achieved with the use of soybean meal damages southern markets with cheap exports of milk powder or meat cuts from the EU (see above). The increase of EU agricultural exports implied by the EU thus does not positively contribute to world food supplies but instead doubly damages food security. But cheap protein imports do not only cause problems outside the EU. They are also at the heart of the increasing regional concentration of livestock production within Europe, primarily in the coastal regions (such as in Denmark, North Germany, Netherlands, Belgium, Brittany/ Normandy, Po Valley, Galicia etc.), which causes massive environmental problems, primarily due to high nitrogen loads and air pollution. Moreover, this leads to agri-industrial systems of livestock production and management which are unacceptable not only from the animal welfare point of view. The Commission s Communication however does not contain any adequate proposals which could help curb this trend. 3. Proposals for environmental and social coherence of the entire CAP It is now becoming apparent that the Common Agricultural Policy (CAP) of the EU will continue to be organized in the form of two pillars after 2013: - the first pillar for annual direct payments to agricultural holdings and for financing state market measures, - the second pillar for support for rural development in the EU which today includes i.a. both the agri-environmental measures and investment support for agricultural holdings. With this reform of the CAP, both pillars of the CAP must be effectively committed to the objective of an environmentally and socially compatible agricultural policy and development policy for rural areas and rural communities. To this end, the various measures under both pillars must be designed in such a way that each measure has a positive impact on the environment and on social justice both at the regional level or the level of the Member State as well as in the international context. This mandatory objective must be given priority over the pursuit of international competitiveness for the European agri-food industry. The new coherence that must pervade the entire European agricultural policy is the environmental and social commitment of all measures under both pillars. Only in this way can the failed current logic of compensation be overcome, which has meant that development policy and the second pillar have been used to compensate for the negative impacts of agricultural trade policy and measures financed under the first pillar. 9

10 Consistent Reform of the EU Agricultural Policy Now German Platform Juni Direct payments must yield environmental and social benefits In the future, direct payments must be made conditional upon the provision of environmental and social common goods by agricultural holdings. The requirements must go well beyond current legal minimum standards, as the legal standards do not assure the provision of these common goods. The environmental and social conditioning of payments is the key constituent needed to achieve environmental improvements and improvements in terms of fair competition in the farming sector (with reference to workers/employment) as widely as possible across the EU. The Commission s Communication is pointing in the right direction. There are multiple ways of conditioning payments. What is crucial, however, is that mandatory requirements be imposed upon farmers as a condition for their receipt of direct payments. These mandatory requirements must - be applicable to as much of the territory as possible, - have great positive leverage with a view to the set objectives, - be easy to administer, - be applicable without necessarily drawing on second pillar funds. We propose the following mandatory requirements as conditions for the receipt of direct payments: Environmental requirements for the receipt of direct payments In order to receive direct farm payments, holdings should comply with the following conditions, which are effective but easy to monitor: - Crop rotation on arable land with at least a three-field rotation and a single crop to take up no more than 50 % of a holding s arable land per growing season (crop acreage ratio); - A minimum share of 20 % of legumes (including grass-clover ley or legume mix) in the crop rotation on a holding s arable land; - At least 10 % of the holding s area to be managed primarily with a view to supporting biodiversity (ecological compensation areas); where individual plots are larger than 10 hectares, 10 % to be the minimum share per plot; - Permanent grassland to be maintained (ploughing up/re-seeding only in exceptional cases); - No genetically modified crops to be grown on the holding. Farms that do not or do not sufficiently meet these requirements revoke their entitlement to direct payments under the first pillar. Farms would thus be free to decide whether they wish to forego the payments which would be conditioned by requirements going well beyond the legal minimum requirements or comply with the requirements and thus maintain their entitlements. This would be the paradigm shift in the distribution of CAP funds the associations have been advocating for many years and which is sketched out in the Commission s Communication. 10

11 German Plattform Juni 2011 Consistent Reform of the EU Agricultural Policy Now In order to ensure widespread participation and spatial impact, payments should be at a level that is providing sufficient economic motivation for farm holdings to comply with the requirements linked to these payments. Unused entitlements should be made available for future-oriented measures (agri-environment, animal welfare, integrated development) under the second pillar in the respective Member State. All these measures are very easy to administer. The relevant data are already being recorded (by way of the annual SPS application and, where applicable, through the GMO site register). Cross-compliance of payments with the conditions listed above would have a broad impact, pervading much of the EU territory, giving a significant positive impetus for environmental protection, climate protection and biodiversity. Moreover it would increase the supply of protein feeds produced in the EU and replace energy-intensive mineral fertilizers. The integration of legumes into crop rotations does not represent a return to linking farm payments to the production of certain crops; instead it is a crucial step towards moving from the current strongly oildependent to solar-based agricultural production. The introduction of environmental conditions for the receipt of direct payments as outlined above would result in positive changes in the landscape which would be directly visible to the population. This visibility has the potential to substantially boost societal acceptance of the EU agricultural policy. Overall, the approach of conditioning direct payments to farmers upon their observance of certain environmental measures still allows for their combination with specific support measures under the second pillar. In particular, specific land use methods which are particularly favourable from the environmental or conservation point of view could be supported on the 10 % ecological compensation areas (more details below). The associations welcome the introduction of a flat rate payment for lands designated as NATURA 2000 areas Social requirements for the receipt of direct payments The Commission s proposal put forward in the Communication of 18 Nov should be adopted and constructively developed: The Commission proposed the introduction of an upper ceiling for direct payments to farms ( capping ), mitigating [d]isproportionate effects on large farms with high employment numbers [ ] by taking into account salaried labour intensity. The associations support this proposal. The distribution of direct payments to farms is seen by society at large as being very unfair. In Germany, only 1.6 % of farms receive more than EUR 100,000 per annum but together they receive about 30 % of the total EU direct payments paid out in Germany. The associations propose to implement the Commission s approach as follows: - A payment ceiling of EUR 100,000 per holding per year. 4) - Upon application, holdings affected by the payment ceiling are given the opportunity to reduce or compensate for the reduction applied to their payments due to the ceiling being in place, in line with the size of their paid and insured labour force. 4) The associations can also envisage clearly degressive payments as proposed, for example, by the EU Commission in

12 Consistent Reform of the EU Agricultural Policy Now German Platform Juni 2011 The holdings themselves must apply for this reduction and furnish the necessary supporting evidence. As a maximum, half of the labour costs can be offset against the reduction applied as a result of the payment ceiling, i.e. the maximum direct payment per holding is based on the eligible area and the holdings resultant payment entitlements, same as is the case for holdings below the payment ceiling. For holdings, the total payment entitlements of which are below the ceiling, the labour force and wage costs are not considered. Therefore, the number of holdings which could claim a reduced reduction would be very minor, with some variation between Member States. 5) The implementation of this proposal would lead to a fairer distribution of direct payments between holdings within individual Member States, as it reduces existing distortions of competition which at present disadvantage environmentally sustainable family farms and labour-intensive agricultural sectors (e.g. dairy farms). Potentially withheld funds should remain in the region concerned and be made available for measures under the second pillar Cross Compliance: Get rid of red tape As part of the 2003 reform of the EU agricultural policy, the cross-compliance system was introduced as both a rationale for payments and an instrument of sanction. Failure to meet the relevant statutory requirements results in payments being reduced. The associations see possibilities for cutting red tape in this area. However, in cases of infringements of statutory requirements which lead to significant negative impacts on the environment or animal welfare, effective sanctions must be applied, including a significant reduction in direct payments. Compliance with the provisions of the Tierschutz-Nutztierhaltungs-Verordnung (Animal Welfare Livestock Husbandry Ordinance - TierSchNutztV), including the provisions for laying hens and broilers, must be a condition for the receipt of payments; for livestock systems not covered by the ordinance, the proposals at hand from the Council of Europe must take effect. 3.2 Strengthen future-oriented measures under the second pillar The second pillar s remit (rural development) has been substantially broadened in the course of previous CAP reforms. This is true for the financing of measures in Natura 2000 sites and measures to implement the Water Framework Directive as well as for the responsibilities arising from the so-called new challenges, i.e. climate protection and climate change, biodiversity, water management, and renewable energy. Moreover, there is a growing challenge to maintain the economic, social and environmental viability of the rural areas and rural communities in the 27 Member States not least in light of demographic changes and the current progressive integration of local and regional markets for agricultural commodities into the internal market and the trade with third countries. The increased remit is not under dispute, and rightly so. However, while demands have increased, financial appropriations for the second pillar were not only not increased proportionately 5) In 2009, approximately 7.8 million holdings were in receipt of direct payments in the EU(27); a mere 0.4 % of these (30.870) received payments greater than the ceiling of EUR 100,000 under discussion. 12

13 German Plattform Juni 2011 Consistent Reform of the EU Agricultural Policy Now in the last EU funding period ( ) and in the course of the CAP reforms but have in part even been restricted. Despite certain adjustments (primarily in terms of modulation) there is still a substantial gap between tasks and resources which has contributed to a significant weakening of existing future-oriented areas for support in rural development. It is therefore necessary to significantly strengthen future-oriented measures under the second pillar. To this end, funding must increase considerably and the areas of activity under the second pillar must be focused on rural development. These rural development measures should remain at the heart of the second pillar and should be strengthened in both structural and financial terms. Accordingly, the associations propose the following: - At the level of the Member States or Federal States (regions) respectively, the binding commitment of a minimum share of EU funds for agri-environmental measures and integrated rural development (current second and fourth axes, and in part also third axis) within the second pillar should be maintained (currently organized in the form of allocations to priority axes). The minimum shares allocated to agri-environmental measures should be increased, in particular for measures achieving a positive impact on biodiversity. - Agri-environmental measures ( new challenges ) and integrated rural development should receive higher levels of EU co-financing, underlining the prioritization of measures ensuring European added value. Moreover, the Member States (or regional states) should be given the opportunity to top up funding for these measures from their own funds in addition to their national co-financing share. Private contributions should also be acceptable as cofinancing. - Agri-environmental and animal welfare measures should have more ambitious targets. The incentive component for these measures should be reintroduced, i.e. funding for these measures should go beyond compensation of additional costs and income foregone resulting from the commitments given, in order to make it attractive for agricultural holdings to participate in these targeted schemes. - With respect to agri-environmental measures the associations further propose the following: o o o o Especially those agri-environmental measures should be strengthened which target multiple environmental policy objectives (such as organic farming) and thus create synergies. Support for organic farming as a systemic measure must not be less financially attractive than the relevant individual measures alone or in combination. Result-based remuneration (a result-oriented approach) should be an option and should be employed where this is possible and meaningful (contractual conservation management agreements). The minimum duration of measures should be flexible, dependent on environmental and conservation needs, without jeopardizing sustained funding. Targeted support should be provided for pasture livestock management (especially of ruminants) as a component of ethologically sound management; existing support measures should be sufficiently attractive. - It is necessary to consolidate and further develop Article 57 of the EAFRD Regulation on Rural Development regarding Conservation and upgrading of the rural heritage as an important instrument for nature conservation, water and climate protection. This investment support is a necessary and logical complement to area-based agri-environmental measures and has proven its worth in many countries. Measures that should be supported include, for example, the creation of wetland habitats, rewetting of peatlands, scrub removal from important grassland sites, planting of woodland copses and traditional orchards, as well as special conservation management measures for highly endangered species. Support for 13

14 Consistent Reform of the EU Agricultural Policy Now German Platform Juni 2011 such measures must not be limited to utilized agricultural areas; planning, management and monitoring must also be supported. - Support for natural heritage should in future be available in the entire territory. To date, urban areas with more than 30,000 inhabitants have been excluded from such support. However, this is not appropriate for the implementation of Natura 2000 and the Water Framework Directive in urban areas. - All measures required to implement the relevant politically agreed objectives, especially in the areas of biodiversity (Habitats Directive and Birds Directive) and water protection (Water Framework Directive), must become eligible for funding, including measures in protected areas and in stepping stones as part of habitat networks outside of normally eligible areas. This also includes advisory services for the farming and forestry sectors promoting the provision of public goods (e.g. conservation advice for farmers) Align investment aid with societal expectations Investment aid for agricultural holdings or for enterprises in the upstream and downstream sectors must no longer solely be focused on rationalized production. Not only does this type of support displace family farms in Europe, but by way of exports it can also cause distortion of competition in the global marketplace, e.g. in impoverished countries. Instead, funds should be made available to cover investment needs allowing farms and other enterprises to adapt their production methods to the requirements of environmental and climate protection, and animal welfare. Investment support must only be provided for stipulated qualitative purposes. It is imperative that coherence be achieved between investment aid for agricultural holdings and environmental protection, nature conservation, and animal welfare. Therefore, investment aid should only be paid if it - helps achieve ethologically sound livestock management of a particularly high standard (going beyond current legal standards), - ensures that livestock production is linked to locally available agricultural land, - reduces environmental damage, - maintains jobs. To this end, grant aid for new livestock housing should be made conditional upon compliance with best practice in livestock management as defined in the national assessment framework for livestock housing systems. 6) Strengthen integrated rural development strategies In addition to production-related services provided by individual holdings and area-specific conditions, there are challenges and development opportunities which go beyond the individual holding and which should be combined into locally or regionally adapted development strategies. Mirroring the societal orientation of agricultural policy at the EU level, a cooperative approach can be used at the local level in a more targeted way to develop quality-driven and consumer-oriented market strategies. To this end, it is useful to harness the individual support 6) Siehe: Nationaler Bewertungsrahmen Tierhaltungsverfahren KTBL-Schrift 446. (Category 3 should be excluded from support). 14

15 German Plattform Juni 2011 Consistent Reform of the EU Agricultural Policy Now measures in a targeted manner for an overall strategy for the region and thus to integrate and thereby amplify the impact of the common good generated at farm level. The EU rates of aid for individual measures should be increased if these measures are components of integrated local or regional development or marketing strategies. Nature parks and other similar areas could serve as ideal model regions for sustainable regional development in Europe, thus meeting European Union objectives. The areas land bases and organizational structures should be used more intensively to implement support programmes for rural areas. Building on the experiences with the LEADER programme, there should be opportunities to support innovative actions, regional collaborative and network projects as well as value-adding partnerships, including the requisite mediation and communication services. Private contributions should also be acceptable for meeting co-financing requirements. At the regions local level, autonomous regional funding envelopes should be on offer through which an agreed list of measures could be administered and financed. This would strengthen local implementation of certain measures and increase regional stakeholders identification with such measures. Cooperative local initiatives such as for example collaborations between farmers and nature conservationists for special conservation measures (MicroLEADER) should be included in the EAFRD Regulation in order to extend the LEADER strategy to the level of farm holdings Support for less-favoured areas and compensation for special regulatory requirements (Natura 2000 sites, nature reserves, water protection areas) Compensation for natural disadvantages in less-favoured areas (LFA) should continue to be provided. However, these compensatory payments should more strongly take into account real disadvantages in terms of land management, rather than be governed by municipal or district boundaries as is currently the case. A differentiation based on the degree of difficulty imposed by biophysical conditions would also be desirable Simplify administration Greater emphasis should be placed on administrative simplification, particularly where environmental and conservation measures are concerned. The straightjacket of implementing regulations for agricultural support causes friction losses, legal uncertainties and the risk of penalties. The system needs a radical overhaul. The system of penalties as well as the effort and expenditure for programming, monitoring and evaluation are excessive. Payments of subsidies towards VAT should be possible, as is the case under the Structural Funds. Pre-financing should be re-considered, especially with regard to beneficiaries in the environmental sphere who tend to rely heavily on voluntary and honorary engagement. Provision should be made for flat rate payments. 15

16 Consistent Reform of the EU Agricultural Policy Now German Platform Juni Assume international responsibilities The EU Treaty stipulates that the EU agricultural policy must be coherent with the Millennium Development Goals and with human rights. We therefore call on the Commission to take the following recommendations into account in the legislative proposals for the reform of the CAP: - International responsibility and coherence with the Millennium Development Goals and with human rights must be defined as basic objectives and must also be given greater weight in the design of the market instruments. To this end, the EU must support the balanced development of global markets for agricultural commodities and must not impair the development of agricultural sectors in developing countries with directly or indirectly subsidized exports. - The term competitiveness should explicitly relate only to the local and regional levels and incorporate social and environmental aspects. - All export refunds must be abolished and removed from the market organizations in their function as legal instruments. This step must not be made contingent on agreement being reached in the World Trade Organization (WTO) or relevant concessions made by other stakeholders. The abolition of this instrument must encompass export refunds for exports of live cattle to third countries, including cattle for breeding. This is also important for animal welfare reasons. - Export subsidies must not be replaced with other export promotion measures such as export credits, sales promotion instruments or Public Private Partnerships with a market-opening effect. - For strongly supported product lines benefiting from high direct payments, including payments made for environmental or social reasons, or from protective tariffs, exports of partial products should either be prohibited or subject to export levies equivalent to the level of support paid. Quantity guidance for such products should also be correspondingly restrictive. For processed products, the value-added share of the relevant product category should apply. - At the same time an environment needs to be created which ensures that producer prices for European farmers are also at a level allowing them to achieve sufficient incomes with sustainable and environmentally-friendly production methods. The practical implementation should be product-specific. Flexible, demand-oriented quantity guidance measures which align production quantities with internal demand should be considered for the particularly sensitive milk market. This is also of significance in development policy terms. To this end, the EU would need to create a legal framework through which producers and consumers could be involved in an effective and appropriate manner in regularly determining demandled adaptations of production quantities. - For agricultural commodities, and in particular for feedstuffs, international product and process standards must be a further developed in the context of qualified market access, in a manner that is sensitive to development policy issues. Imports of products the production of which has a highly negative greenhouse gas balance or damages important biodiversity areas must be restricted. In contrast, products in the production of which the core principles of the International Labour Organization (ILO) and internationally recognized organic standards, such as the standards of the worldwide umbrella organization for the organic agriculture movement, IFOAM, are being met, should be given improved market access. 16

17 German Plattform Juni 2011 Consistent Reform of the EU Agricultural Policy Now 4. Summary In the current paper, the undersigned associations present their joint proposals for the pending reform of the Common Agricultural Policy (CAP) of the European Union. The associations welcome the fact that the Commission in its Communication of November 18, 2010 on the CAP toward 2020 has already taken on board some of the measures they have called for. In particular, the proposed cross-compliance of compensatory payments with environmental and social conditions going beyond current legal minimum standards should be highlighted. The detailed design of these environmental and social criteria will determine in how far these qualifiers for payments will truly be able to have the necessary positive impacts on climate, biodiversity, the environment, animal welfare and rural employment, and thus also be able to contribute to reducing trade-distortions at the international level. The associations are highly critical of the Commission s Communication in terms of the role of the European agri-food industry in the international context. The EU is the worlds biggest importer and exporter of foods and other agricultural commodities. However, the Communication lacks measures that address the current negative impacts of the CAP on international markets, on food security in developing countries, on the right to food, and on environmentally sustainable rural development in partner countries. The associations expect the Commission to recognize and actively assume the responsibilities for development policy issues arising from the EU agricultural policy. The EU agricultural policy must not be limited to distributing funds. Nonetheless, tax revenues spent on agricultural policy must be used to make a substantial contribution to achieving essential improvements in the areas of environmental protection, employment, fair competition and rural development. Both pillars of the agricultural policy must be committed to these objectives. To this end, the associations make the following proposals: Environmental and social qualifiers for direct payments Direct payments must be made conditional upon compliance with certain mandatory requirements without necessarily having to activate second pillar funding. The associations propose the following criteria: Environmental requirements: - Crop rotation on arable land with a single crop to take up no more than 50 % of a holding s arable land per growing season. - Legumes or legume mixes such as grass-clover ley to take up a minimum share of 20 % of a holding s arable land. - At least 10 % of the holding s area to be managed primarily with a view to supporting biodiversity (ecological compensation areas); where individual plots are larger than 10 hectares, 10 % to be the minimum share per plot. - Permanent grassland to be maintained (ploughing up/re-seeding only in exceptional cases). - No genetically modified crops to be grown on the holding. 17

18 Consistent Reform of the EU Agricultural Policy Now German Platform Juni 2011 Social requirements: - Based on the Commission s proposal to introduce an annual payment ceiling per holding, the associations suggest a payment ceiling of EUR 100, Upon application, holdings affected by the payment ceiling should be given the opportunity to reduce or compensate for the reduction applied to their payments due to the ceiling being in place, in line with the size of their paid and insured labour force. Unused entitlements should be made available for future-oriented measures under the second pillar in the region concerned. Strengthening of future-oriented support measures under the second pillar The associations call for the significant financial and structural strengthening of targeted, futureoriented support measures under the second pillar. This entails the following: - Binding commitment of a minimum share of EU funds for agri-environmental measures and integrated rural development (current second axis and LEADER, and in part also third axis) should be maintained. - Agri-environmental measures should receive higher levels of EU co-financing. - Agri-environmental and animal welfare measures should have more ambitious targets and the incentive component for these measures should be reintroduced. - Systemic agri-environmental measures which serve a number of different environmental objectives, such as organic farming, should be strengthened; they must not be less financially attractive than the relevant individual measures alone or in combination. - There should be attractive support measures for pasture livestock management as a component of ethologically sound management. - Article 57 of the EAFRD Regulation regarding Conservation and upgrading of the rural heritage should be consolidated and further developed. Support for such measures should not be limited to utilized agricultural areas and should in future be available in the entire territory. All measures required to implement the relevant politically agreed objectives, especially in the areas of biodiversity and water protection, must be eligible for funding. Investment aid for livestock housing on individual agricultural holdings should only be made available if it helps achieve ethologically sound livestock management of a particularly high standard, ensures that livestock production is linked to locally available agricultural land, reduces environmental pollution, and maintains jobs. Integrated strategies for rural development should receive particularly strong support. Building on the experiences with the LEADER programme there should be opportunities to support innovative actions, regional collaborative and network projects as well as value-adding partnerships. Nature parks and other similar areas could serve as ideal model regions in this regard. Recognize and actively assume international responsibilities The associations call on the EU to take appropriate measures to make the EU agricultural policy coherent with the Millennium Development Goals and with the right to food. Developing countries must be given the opportunity to develop their own socially and environmentally just 18