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Assessing the new CAP

The CAP reform process 2010-13 absorbed a great deal of time and resources of the EU institutions and civil society. The more ambitious proposals of the European Commission, such as a standard payment and new "greening" measures for all farmland, were distorted and watered down under pressure from farming interest groups and national governments.

The result is a highly complex mix of new rules and escape clauses allowing Member States to continue with a large degree of business as usual, although with a mass of new legislation and more bureaucracy than ever.

Some of EFNCP's proposals were incorporated in the new CAP, but not the main one of providing incentives for high-nature-value (HNV) farming. There are some opportunities for semi-natural pastures under both CAP Pillars, but also plenty of scope for disappointment depending on decisions taken by Member States and on the quality of governance applied by the European Commission.

What will it all mean for farmers and for ecosystems? As the new CAP beds in, EFNCP will assess the critical elements and how they are implemented on the ground, especially for extensive grazing systems and the semi-natural pastures that depend on them.

CAP greening and HNV farming

The new greening measures bring nothing positive for high-nature-value farming. Unlike our proposals, greening offers no increase in support for farmland that is already delivering for the environment, just more rules. For pastures, the main change is that farmers will be banned from ploughing or converting environmentally sensitive grasslands in Natura 2000 areas (Member States can extend this protection beyond Natura 2000 if they want to). It sounds "green" but it ignores the fact that the main threat to these grasslands is abandonment, and the main need is targeted support. EFNCP will be monitoring how the new control is applied in practice.

Farmers entering the new payment scheme for small farmers will be exempt from greening and from cross-compliance, meaning that they will be free to clear landscape features such as hedges, dry-stone walls and terraces. Some high-nature-value landscapes, especially in southern and eastern Europe, are predominantly small farms that should be rewarded for conserving their special landscapes, rather than being given a green light for intensification and landscape clearance.

Direct income payments

The majority (about 45 billion euros) of the CAP annual budget is spent on income payments to farmers, or "direct payments" in the CAP terminology. Despite the reforms undertaken in 2013, these payments are still not linked to any clear objectives or calculated in proportion to any meaningful criteria. They are intended to support farmers' incomes, but they take no account of a farm's income needs or what public services it delivers.

The European Commission's publicity for the new CAP explains that farmers produce public goods such as landscapes and biodiversity, but that the market does not pay for these. So "to remunerate farmers for this service to society as a whole, the EU provides farmers with income support".

Following this logic, you might expect the farmers who deliver the most valued landscapes and biodiversity to receive at least as much support as the more intensive farming that delivers very limited public goods. But no. In many EU countries, payments will still be determined by a mix of historic factors linked to the "old" CAP subsidies for production. The amount of money received per hectare or per work unit on the farm will still vary massively, and with no logical pattern. In many countries farms of high nature value will continue to receive much less income support than intensive farms, and in some cases they will be excluded from support entirely.

"Perverse rules" for direct payments

With the change 10 years ago from production subsidies to payments per hectare of farmland the EU was faced with the question of what land should be eligible for payments, and how to distinguish eligible land from non-eligible land. This issue has been approached through two overlapping sets of rules applied to all land: a) to be eligible it must have the right type of land cover (cropland or pastures, not buildings or forests) and b) there must be at least a minimum agricultural activity or land maintenance.

Unfortunately the rules that came in after 2003 defining eligible land cover discriminated against pastures with trees, shrubs and other features such as large hedges. Like most of the CAP, the rules were designed for intensively farmed land, and land with too much "nature" was penalised or was simply not eligible for payments. The message to farmers seemed to be to stop managing such land, or to clear trees and hedges in order to avoid losing payments. The EU imposed big fines on Member States for not being strict enough in applying these rules.

For the new CAP, the rules have been adapted and now it is OK for pastures to have trees and shrubs. The previous upper limit of 50 trees per hectare has been raised to an equally arbitrary 100 trees, but hedges still must be no more than 2 metres wide, with certain exceptions. How can it be right for "Brussels" to decide how many trees to have on farmland or how wide a hedge can be for the whole of the EU?

Alternatively, Member States can apply a system of pro-rata payment reductions in proportion to the coverage of trees and landscape features. In other words, continuing to penalise farmland with more trees and landscape features than the average. In some areas this approach goes directly against the objectives of EU biodiversity policy, particularly Natura 2000.

Pastures that are not predominantly herbaceous, in other words tree and shrub pastures, now can be eligible for CAP support, which is very good. But Member States must put them in a special category and define the "established local practices" that justify their consideration as pastures, which is a clear disincentive for authorities. Doing the right thing is never made easy under the CAP.

The result of the reforms is a tortuous system of rules and exceptions that allows Member States to implement a well-adapted approach to pastures with trees and landscape features if they choose to and if they make extra administrative efforts to push the boundaries of the EU rules. But after the heavy fines imposed by the European Commission on Member States for being too lax, authorities might prefer the simpler option of excluding any land that could raise the auditors' suspicions.

Subsidising a field of maize through the CAP is very easy, supporting the continuation of farming on extensive pastures is fraught with administrative difficulties. Could it be that the EU institutions are still giving priority to intensive farming?

The other critical criterion for deciding if land can receive CAP payments is that there must be a minimum activity or minimum maintenance of the land. Until now, national authorities had the option of requiring farms to have a minimum density of livestock per hectare, or other appropriate regimes, such as a defined grazing regime. This makes sense for semi-natural pastures that can only be maintained in good condition through grazing.

Now the European Commission insists that it cannot accept minimum livestock density as a condition for CAP support, as they think there is a danger that third countries might object under World Trade Organisation (WTO) rules that ban the linking of payments to production. Instead the Commission suggests that national authorities require mechanical cutting of pastures as the minimum activity.

For extensive livestock farming and semi-natural pastures, this is a major problem and perhaps the biggest black mark against the new CAP. Cutting pastures generally means a loss of biodiversity compared with grazing (except for hay meadows), especially if the cut vegetation is not removed. On pastures with trees and shrubs it is impractical. Extensive pastures need grazing as the minimum maintenance activity, and the Commission should be prepared to defend this position at the WTO if there are objections (so far there have been none). Grazing is not agricultural production, any more than cutting the grass is production, it is just good land management.

Perhaps most importantly, the block on requiring minimum livestock densities removes the incentive to keep livestock, and could lead to the disappearance of farming, with agricultural funds being used instead to subsidise contractors for mechanical clearance of vegetation with none of the public benefits of active farming. It is ironic that the European Commission publicity claims that direct payments are now "better targeted by limiting support to those who are actively engaged in agricultural activities". The fact is that the Commission's interpretation of the rules makes Pillar 1 payments meaningless for Europe's most environmentally valuable farmland.

Typically, all of these changes to policy have been introduced without properly evaluating what the effects will be in practice, either on farming or the environment. EFNCP will be trying to find out the answers over the coming months and years.

Rural development

About 20% of the CAP budget is spent on the CAP's so-called Second Pillar, in the form of rural development programmes (RDP). These are designed by Member States and regions, drawing on a "menu" of EU measures that include investment aids for farms, grants to food-processing industries, rural infrastructure (for example tracks, irrigation projects), forestry, funding for local action groups and many other things.

A minimum proportion of each rural development programme budget must be allocated to a group of measures that are potentially good for the environment: payments for organic farming, agri-environment-climate payments to encourage particular farming practices that benefit the environment, and payments to farmers in Areas with Natural Constraints.

These measures are especially relevant for Priority 4 of EU rural development policy, with its focus on "restoring, preserving and enhancing biodiversity, including in Natura 2000 areas…and high nature value farming…". All rural development programmes should assess the needs on the ground for this and the other 5 EU priorities, and the programmes should respond to the identified needs.

In practice, the are huge differences in the extent to which different countries address the priority for biodiversity and HNV farming. Some countries do a lot, while some do very little. There are vast areas of HNV farmland across the EU where no agri-environment or similar measures are applied, including most of the farmland in Natura 2000 in Spain, for example. These inconsistencies have been revealed by a Commission study in which EFNCP played an important part.

Payments for farming in Areas with Natural Constraints (ANC) and for afforesting farmland can absorb a large part of the environmental envelope and are generally presented as supporting biodiversity goals, but the evidence is that most of the schemes are not designed in ways that would justify these claims [see for example]

Overall, there is no coherence or cohesion in the way biodiversity is addressed under Pillar 2 across the EU. Member States that choose not to give priority in their RDPs to biodiversity and HNV farming are allowed to carry on with this approach year after year, even if they are not fulfilling their commitments to conserve and restore Natura 2000 habitats.

Part of the problem is that the national and regional reports evaluating the effects of RDPs often don't include enough information on the implementation and outcomes of specific measures, so nobody really knows what has been achieved on the ground. There are many circular processes of analysis, for example measures that are intended to benefit the environment are then assumed to have benefited the environment, without any actual evidence.

For the new round of programmes 2014-2020, the Commission promised to take a stricter approach to ensure that Member States produce clearly justified programmes based around the EU rural development priorities. We will see how this works out in practice.

EFNCP will also be keeping an eye on the implementation of a new indicator for monitoring progress under rural development programmes and the wider CAP, namely the condition in each country of grassland habitats from Annex 1 of the habitats Directive.

Finally we should mention the new rural development measure for "co-operation". This measure incorporates a proposal made by EFNCP during the CAP reform process for RDPs to fund local partnership projects involving farmers and conservationists along the lines of successful projects run by our partners (see the Burren in Ireland and ADEPT in Romania). The outcomes of this interesting new measure will depend on how it is implemented by national and regional authorities.


 
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European Forum on Nature Conservation and Pastoralism
Online: http://www.efncp.org/policy/assessing-the-new-cap/
Date: 2017/04/27
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