The green reform of the CAP collapses due to the clash between governments and the European Parliament

cap aid during the period 2021 2027
cap aid during the period 2021 2027

The Portuguese EU presidency will try again for an agreement in June, although positions remain far apart.

It was the date set for the agreement, but in the end there was no white smoke. The reform to make the common agricultural policy (PAC) of the EU greener and more compatible with the fight against climate change has been shipwrecked this Friday by the clash between the governments of the 27 and the Eurochamber. The negotiating marathon of four days and a night without sleep has not served to bridge the differences on how to make the CAP contribute to the goal of a net zero emissions economy.

Despite the failure, the Commissioner for Agriculture, the Polish Janusz Wojciechowski, has announced that there will be a new attempt in June. But the delay in approving the reform triggers uncertainty for the European agricultural sector, which still does not know what aid they will receive during the 2021-207 period. In fact, the reform should have entered into force this year, but the delays have forced the EU to approve a two-year extension of the current regime.

“Despite all the efforts, this agreement has not been possible,” lamented the Minister of Agriculture, Luis Planas, at a press conference. “It has been a tough, complicated negotiation. We are talking about rules and decisions at the community level, but they are going to definitively influence the way of living and working of our farmers and cattle ranchers and our rural world, “says Planas.

“Therefore, we have to be particularly careful that the application of these norms is a real support to the work of our farmers and ranchers and not undue weight on your homework“, highlighted the Minister of Agriculture.

The CAP remains the policy that monopolizes the largest portion of the community budget, about 30% of the total. During the period 2021-2021, agricultural aid will amount to 378,000 million euros. Spain is the second beneficiary country of these subsidies, only behind France, with 630,000 recipients. In total, it will receive in the next seven years 45.2 billion: 37,400 in direct payments to farmers and 7,800 in funds for rural development, according to data from Brussels. These amounts were already agreed at the July 2020 budget summit.

CAP aid during the period 2021-2027

CAP aid during the period 2021-2027

What is at stake now is how this money is distributed among farmers to ensure that the CAP contributes to the green transition. In this sense, the main novelty of this reform is the creation of a new instrument (the so-called calls ecological regimes or eco-schemes), which aims to reward farmers who exceed basic environmental and climate goals.

Among the examples of eco-schemes there are practices such as precision agriculture, agroforestry, organic farming, fallow practices or extensive grazing.

The new instrument will be financed with part of the money earmarked for direct payments. This means that farmers with greener practices will receive more subsidies, but others could end up losing support. Namely, farmers’ European income could vary each year.

Therefore, the governments of the 27 they agreed last october limit the budget for eco-schemes 20% of total direct payments. In addition, they called for an initial two-year pilot phase to ensure farmers’ learning and loss of funds.

However, the European Parliament considers that this percentage is insufficient to meet the EU’s climate objectives and claims to increase it to 30%. Also environmental organizations, led by Greenpeace, they speak of “ecological bleaching”. The surprise is that the Ursula von der Leyen she has aligned herself with Parliament against governments, instead of acting as a mediator.

In fact, the vice president responsible for the Environment, Frans Timmermans, went so far as to suggest last year that it could withdraw the CAP reform because it is not aligned with the community’s green goals. In the end, Von der Leyen had to correct him.

During this week’s negotiations, the Portuguese EU presidency presented various compromise proposals in an attempt to bring positions between the European Parliament and governments. The last consisted of dedicating 25% of direct payments to ecological schemes (that is, halfway between the two), but with great flexibility to transfer the money that is not spent on them to other items. The European Parliament has rejected this final offer.