The CAP after 2020 - Inra

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The CAP after 2020 - Inra
the CAP after 2020

MODERNISING & SIMPLIFYING THE COMMON AGRICULTURAL POLICY
TARGETED, FLEXIBLE, EFFECTIVE

      A STRONG BUDGET
      FOR A STRONG CAP

 Benjamin Van Doorslaer
 C.2 Analysis and Outlook
 Directorate General for Agriculture and Rural Development
 European Commission
#FutureofCAP
The CAP after 2020 - Inra
• THE FUTURE CAP PRIORITIES AT A GLANCE

   Simplification and modernisation of the CAP

   Support to the development of a knowledge-based agriculture

   Higher ambitions on environment and climate

   A fairer and more effective distribution of support across MS and farmers

                                                                       Agriculture and
                                        2                              Rural Development
The CAP after 2020 - Inra
• WHY: LESSONS LEARNT FROM ASSESING THE CAP
Analysis and wide public consultation confirm major achievements of the CAP…
•   Increase in EU competitiveness turned the EU into a net agro-food value-added exporter
•   Positive impact on jobs, growth and poverty reduction spread in all EU rural areas
•   Relative income stability within a very volatile farm-income and commodity-price environment

…but analysis and public opinion also reveal shortcomings to be addressed…
•   Despite progress, the environmental performance of EU agriculture requires improvement
•   Productivity growth is mainly driven by labour outflow and less by R&I or investment
•   Equity, safety net and simplicity questions persist despite CAP efforts to address them

…in a changing broader environment within which the CAP operates
•   Expectations about the level of agricultural and commodity prices changed from CAP post-2013
•   The world trade environment has shifted from multilateral to bilateral/regional agreements
•   New climate change, environmental and sustainability commitments stem from COP21 and SDGs

                                                                                              Agriculture and
                                                     3                                        Rural Development
The CAP after 2020 - Inra
HOW MUCH: CAP BUDGET IN PERSPECTIVE (current prices)
       in billion EUR                                                                                                                                                                                                                                                                                      as share of GDP
80                                                                                                                                                                                                                                                                                                                                                   0,8%
                    EU-10                                                    EU-12                                                          EU-15                                     EU-25                            EU-27                                      EU-28                                              EU-27

70                                                                                                                                                                                                                                                                                                                                                   0,7%

60                                                                                                                                                                                                                                                                                                                                                   0,6%

50                                                                                                                                                                                                                                                                                                                                                   0,5%

40                                                                                                                                                                                                                                                                                                                                                   0,4%

30                                                                                                                                                                                                                                                                                                                                                   0,3%

20                                                                                                                                                                                                                                                                                                                                                   0,2%

10                                                                                                                                                                                                                                                                                                                                                   0,1%

0                                                                                                                                                                                                                                                                                                                                                    0,0%
     1980
            1981
                   1982
                          1983
                                 1984
                                        1985
                                               1986
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                                                                    1989
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                                                                                                                                                                                                                                                                                      2019
                                                                                                                                                                                                                                                                                             2020
                                                                                                                                                                                                                                                                                                    2021
                                                                                                                                                                                                                                                                                                           2022
                                                                                                                                                                                                                                                                                                                  2023
                                                                                                                                                                                                                                                                                                                         2024
                                                                                                                                                                                                                                                                                                                                2025
                                                                                                                                                                                                                                                                                                                                       2026
                                                                                                                                                                                                                                                                                                                                              2027
     Export subsidies                                                                                                       Other market measures                                                                                                    Coupled support
     Decoupled support                                                                                                      of which direct payments                                                                                                 of which green payments
     Rural development - environment/climate                                                                                Rural development - other measures                                                                                       Pillar I post-2020 proposal
     Pillar II post-2020 proposal                                                                                           Current CAP excl UK                                                                                                      CAP as share of EU GDP

     Source: EC-DG AGRI.
     Note: Budget figures are actual until budget year 2016, programmed from 2017-2020, and based on the MFF proposal for 2021-2027
     http://www.europarl.europa.eu/RegData/etudes/BRIE/2018/621864/EPRS_BRI(2018)621864_EN.pdf.

                                                                                                                                                                                                                                                                                                                                Agriculture and
                                                                                                                                                                             4                                                                                                                                                  Rural Development
WORLDWIDE EXTREME WEATHER EVENTS
      Natural catastrophes worldwide - number of events
800

700

600

500

400

300

200

100

 0
       1980
              1981
                     1982
                            1983
                                   1984
                                          1985
                                                 1986
                                                        1987
                                                               1988
                                                                      1989
                                                                             1990
                                                                                    1991
                                                                                           1992
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                                                                                                                                                                                                                                              2013
                                                                                                                                                                                                                                                     2014
                                                                                                                                                                                                                                                            2015
                                                                                                                                                                                                                                                                   2016
                            Meteorological events                                                               Hydrological events                                                          Climatological events
      Meteorological events: Tropical storm, extra-tropical storm, convective storm, local storm
      Hydrological events: Flood, mass movement
      Climatological events: Extreme temperature, drought, forest fire

       Source: © 2017 Münchener Rückversicherungs-Gesellschaft,
       Geo Risks Research, NatCatService (January 2017)
                                                                                                                                                                                                                                          Agriculture and
                                                                                                                               5                                                                                                          Rural Development
THE NEED TO DO MORE ON CLIMATE AND ENVIRONMENT
      Reduction in environmental impact indicators (2010=100)
150

140

130

120

110

100

90

80

70
        1990

               1991

                      1992

                             1993

                                    1994

                                           1995

                                                  1996

                                                         1997

                                                                1998

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                                                                                                                                                                    2012

                                                                                                                                                                            2013

                                                                                                                                                                                   2014

                                                                                                                                                                                          2015
               Ammonia emissions from agriculture                               GHG emissions from agriculture                               Gross nitrogen balance

      Source: Eurostat.
                                                                                                                                                                           Agriculture and
                                                                                             6                                                                             Rural Development
• WHAT FOR: PRIORITIES OF THE FUTURE CAP
Strengthening environment and climate action
•   EU sets wide objectives and list of available types of intervention on air, water, soil, biodiversity
•   MS Strategic plans define the pertinent actions to meet EU objectives based on MS specific needs
•   Farmers apply for schemes and comply with stringent environmental criteria defined by EU/MS

Better targeting of support
•   DPs provide an important safety net for farm income lagging behind the rest of the economy
•   Better targeting of income support improved with internal convergence and redistributive payments
•   Fairer distribution is improved with degressive cuts above 60 000 € and capping at 100 000 €

Relying more on knowledge, innovation and technology
•   A better link of what we know to what we grow would promote the use of smart agriculture
•   Anticipating future knowledge needs promoted with more funding for research to address them
•   Exchange and knowledge transfer relies more on improved functioning of the FAS/EIP Systems

                                                                                                   Agriculture and
                                                       7                                           Rural Development
THE 9 COMMON OBJECTIVES
                                        REBALANCE
            INCREASE
                                        POWER IN FOOD CHAIN
      COMPETITIVENESS

     ENSURE                                      CLIMATE CHANGE
 FAIR INCOME                                     ACTION

                               THE 9
                               CA
                           OBJECTIVES
                                                    ENVIRONMENTA
                                                    L
                                                    CARE

RESPOND TO
   CITIZENS'
                                P                PRESERVE
                                                 LANDSCAPES
CONCERNS in                                      &
      terms of                                   BIODIVERSITY
                                        SUPPORT
     FOOD &                             GENERATIONAL
     HEALTH                             RENEWAL
                     VIBRANT
    QUALITY
                 RURAL AREAS       8
Improving water quality
 Focus on N, modelled through              Reduction in N-surplus per ha of UAA (relative to baseline),
  reduction targets of the gross nutrient   Most constraining scenario
  balance
 Reduction targets fixed according to
  actual surplus, lower targets if manure
  trading takes place
 Close to 4% N-surplus reduction
  on average in the EU in the most
  constraining scenario
 Farmers adopt more N-efficient
  technologies (like precision farming)
 Significant reduction in mineral
  fertiliser use (with 5% at EU level)

                                            Source: JRC, CAPRI model

                                                                                              Agriculture and
                                               9                                              Rural Development
HOW: THE NEW DELIVERY MODEL OF THE CAP
                                                           ex. foster sustainable development and efficient
                EU Specific objectives
                                                            management of natural resources (water, …)

  EU          Set of common Indicators                ex. I.15 Improving water quality: Gross nutrient balance on
                                                                          agricultural land

             Broad types of interventions

           Identification of needs in MS's CAP Plan

            Tailor CAP interventions to their needs
MEMBER
 STATES

          Implementation / Progress towards targets

                                                                                              Agriculture and
                                         10                                                   Rural Development
HOW: FOCUS ON PERFORMANCE

              Multi-annual programming approach for the whole CAP

   COMMON OBJECTIVES        INDICATORS          TYPES OF INTERVENTIONS

                   Annual Performance Clearance
Assurance                                                      Common Output Indicators
                      Linking expenditure to output

                    Annual Performance Review                  Common Result Indicators
Monitoring         Checking progress towards targets

   Policy                 Interim Evaluation
                                                               Common Impact Indicators
performance     Assessing performance towards objectives

                                                                              Agriculture and
                                           11                                 Rural Development
HOW: THE NEW GREEN ARCHITECTURE OF THE CAP                                                                                                      40% of
                                                                                                                                                                 budget
                                                                                                                                                                 climate
                         Farm                                                                                                                                   relevant
                                                   Knowledge
                        advisory                    transfer              Level of requirement                  Cooperation              Innovation
                        services

                       Current architecture                                                                  New architecture

                                                                                                                                                           Voluntary for
                                                     Climate &                                                    Climate &

                                                                                                                                                             farmers
                            Voluntary for

                                                   Environmental                                 Eco‐schemes
                              farmers

                                                                                                                environmental
                                                  measures in Pillar II                            in Pillar I measures in Pillar
                                                   (AECM, Forestry measures,                                          II
                                                    investment measures… )
              Mandato

              farmers

                                                                                                                           (AECM, Forestry measures,
                                                   Greening
               ry for

                                                                                                                                                          Mandatory for
                              (3 detailed obligations on crop diversification,                   New, enhanced conditionality
                                                                                                                            investment measures… )

                                                                                                                                                            farmers
                                      permanent grassland and EFA)                               (on Climate/Env, 14 practices built upon EU minima
                                                                                              (climate change, water, soil, biodiversity and landscape)
for farmers
Mandatory

                                            Cross‐compliance                                       and requirements from Nitrates Directive, Water
              (on Climate/Env, 7 GAEC standards (water, soil, carbon stock, landscape)            Framework Directive and Natura 2000 Directives)
               and requirements from Nitrates Directive and Natura 2000 Directives)

                                                                                         12
• FOR WHOM: A FAIRER AND MORE TARGETED
                         DISTRIBUTION
   Reduction of all direct payments above EUR 60 000 and capping at 100 000
        taking into account salaries and labour costs

   Complementary redistributive income support for sustainability

   Additional amount per hectare, shift from bigger to smaller and medium-sized farms

   Complementary income support for young farmers (min 2% of pilar 1 budget)

   Convergence of income support within Member States:
        no payment entitlement with a value < 75% of the average (by 2026 at latest)
        maximum per entitlement

   Convergence between Member States:
        for all Member States with direct payments below 90% of the EU-27 average, the gap between their
         current level and 90% of that average will be closed by half over 6 years

                                                                                                  Agriculture and
                                                         13                                       Rural Development
THE CAP CYCLE: POTENTIAL RISKS
                         Administrative risks
                 • Inadequate administrative capacity

                                                                  PERFORMANCE                             Implementation issues
              Market risks                                       AND ASSURANCE                      • Insufficient quality of monitoring data

                                                IMPLEMENTATION
 • Un-level playing field between farmers
 • Insufficient uptake of intervention

                                                                                       EVALUATION
                                                                                                                     Timing issues

                                                    POLICY
                                                                                                        • Inadequate planning of data monitoring
     Implementation issues                                                                              • Timely
                                                                                                               y evaluation results
• Uneven national requirements
• Insufficient use of innovative solutions
  for checks and monitoring
• Insufficient performance

                                                                    PLANNING
   Administrative & timing issues
  • Inappropriate capacity for planning                                                                          Lack of vision
  • Unfair treatment of CAP plans                                                                   • Lack of support towards modernisation
  • Delays in approval of CAP plans                              Inadequate strategy                • Lack of ambition with regard to targets
                                                • Imbalance between economic,
                                                  environmental and social dimensions
                                                • Complex or incoherent strategy
                                                • Inadequate targeting of beneficiaries
                                                                                                                                  Agriculture and
                                                                         14                                                       Rural Development
THE CAP CYCLE: SAFEGUARDS
                                                                     Suspension of payments
                                     Performance bonus

                                                                                                Financial correction
                                EU audits

  Action plan for remedial actions
                                                                PERFORMANCE                          Interim evaluations (CAP Plan)
                                                               AND ASSURANCE

                                              IMPLEMENTATION
                                                                                                       Interim evaluation and report EC

                                                                                   EVALUATION
     Reduction in payments
                                                                                                               Ex-post evaluations

                                                  POLICY
   Annual review meetings
                                                                                                                       Conditionality

 Monitoring committee meetings
                                                                                                                       CAP plan requirements

Performance reporting, review and                                                                                  No backsliding rule
           assurance

                                                                 PLANNING                                     Budget earmarking
                       CAP plan approval
                                                                                                        EU basic requirements

                         Stakeholder consultation                                     Ex-ante evaluation

                                                                   SWOT analysis
                                       EC support
                                                                                                                              Agriculture and
                                                                    15                                                        Rural Development
• A SIMPLER CAP
                       EU focus on results and performance of the policy

                       Simplification and reduction of administrative burden
                              stems from requirement of the CAP Strategic Plan
NEW OPPORTUNITIES
                            Design of a plan adapted to local needs
                            Streamline schemes in both pillars
                            Development of a more targeted framework
                                    including for environment and climate-friendly practices

                       Rules defined much closer to their daily reality
                       No EU Commission’s audit on individual beneficiaries
 FOR BENEFICIARIES     Use of technologies for faster, slimmer and more automatic fulfilment of
                        administrative procedures
                       Access to impartial farm advice and assistance in applying for support

                         Less prescription from EU requirements
                         Stability in governance structures (Paying Agencies, Certification Bodies)
FOR ADMINISTRATIONS      Stability in systems (IACS, LPIS)
                         Streamlining of reporting requirements
                                                                                                Agriculture and
                                           16                                                   Rural Development
• A MODERN CAP
                       Huge potential to save time, money:
                        Development of an “area monitoring system” (i.e. a system based on systematic,
                         year-round remote observation of agricultural activities) with potential of replacing
                         classical control methods
   PUSH FOR NEW
   TECHNOLOGIES         Geo-spatial application (GSA), a digital application that integrates GIS technology,
                         will continue to be the default method of submitting applications

                        Pre-fill of application with as much up-to-date and reliable information as possible
                         (e.g. data from the Land Parcel Identification System)

                        Beneficiaries will get access to improved farm advice
                        Farm advice will cover all requirements of the CAP strategic plan
                                 including conditionality
                        Extensive list of new elements in farm advice
EXTENDED FARM ADVICE             Rural development interventions, financial instruments and business
                                   plans (included in CAP Plans), Clean Air Directive, National Emission
                                   Ceiling Directive, Animal Health Law, Plan Health Law, Practices against
                                   anti-microbial resistance, Risk management, Innovation support (with
                                   European Innovation Partnerships), Development of digital technologies

                                                                                                 Agriculture and
                                          17                                                     Rural Development
A TENTATIVE OUTLOOK

2018 - 2019         Debate in the European Parliament and in the Council on the CAP proposals

Spring 2019   Possible agreement of the next MFF 2021-2027 by the Heads of States and Governments

Spring 2019              Possible adoption of the next CAP 2021-2027 by the co-legislators

  May 2019                             Elections of the European Parliament

                                      Preparation of the CAP implementation

                                     Possible entry into force of the new CAP
    2021
REPORTS AND MORE INFORMATION AVAILABLE AT:
                                                     MFF Material
                  https://ec.europa.eu/commission/publications/factsheets-long-term-budget-proposals_en

                                           CAP legislative proposals
https://ec.europa.eu/info/food-farming-fisheries/key-policies/common-agricultural-policy/future-common-agricultural-policy_en

                                               Impact Assessment
                   https://ec.europa.eu/agriculture/policy-perspectives/impact-assessment/index_en.htm
                          https://ec.europa.eu/agriculture/consultations/cap-modernising/2017_en

                                          Background AGRI material
                                       https://ec.europa.eu/agriculture/index_en.htm
                                        https://ec.europa.eu/agriculture/statistics_en

                                    https://ec.europa.eu/agriculture/cap-indicators_en

                             Thank you for your attention!

                                                                                                                    Agriculture and
                                                            19                                                      Rural Development
• THE CAP IN THE MFF CONTEXT
Continuity within new EU priorities in a post-BREXIT MFF
•   A 5% cut in CAP expenditure, but a more targeted approach to improve efficiency and performance
•   The "C" in the CAP remains strong, implies a better sharing of responsibilities between EU and MS
•   Better link to other policies (esp. environment, climate, research, health) improves mutual efficiency

Main changes in the CAP
•   Stronger environmental/climate ambition with conditionality, echo-schemes and strategic plans
•   Specifying the objectives that add EU value render the CAP more sustainable, simpler and modern
•   Better targeting of support improves synergies between the economy and the environment

Main expected impact from changes
•   Stronger reliance on research, knowledge transfer and digital economy to modernise CAP and sector
•   A needs-based approach increases subsidiarity and flexibility to promote common EU objectives
•   The CAP shift from compliance to performance parallels MFF shift towards more focus on incentives

                                                                                               Agriculture and
                                                     20                                        Rural Development
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