Eurinco
Eurinco has been monitoring Brussels policy developments in agriculture and related fields since 1995. We anticipate the trends and help farmers and their professional advisers assess the implications and the commercial opportunities.
Published: 15-May-2012
The Commission's proposals for CAP reform post 2013
Dacian Ciolos, European Commissioner for Agriculture and Rural Development.
In October 2011, the Commission published legislative proposals for the CAP after 2013. While many commentators are underwhelmed by the nature of the proposals, some aspects have real and potentially damaging implications for some UK farmers (see "Commission publish CAP reform proposals").
Eurinco aims to ensure that our clients do not discover something in 2014 which they might have done something about in 2012. See "CAP reform" section of this site for updates on the discussions as they occur.
Responding to future policy developments in Brussels might involve minor changes to the business structure, or briefing MEPs and Commission officials, suggesting alternative ways of meeting the same objectives (see 'brokering solutions' below).
But the first step must be to assess the likely changes and their impact on your particular business or those of your clients.
Eurinco can help farmers and land managers respond to these and other policy challenges and derive new sources of income from meeting them.
Eurinco offers you and your clients the benefit long-standing expertise in anticipating and assessing policy changes at a European level, a good working relationship with Commission officials and members of the European Parliament, and a deep understanding of the way farming and estate management operate in UK (see ' About us').
A summary of the main proposals as published on 12th October is available on application (email peter.fane@eurinco.eu). These briefings are regularly updated to take account of more recent negotiations in the Council of Farm Ministers and developments in the European Parliament.
Eurinco and CAP reform proposals and implementation:
Our “pilot light service” is designed to keep busy professionals up to date with relevant developments as they emerge, ready to “turn up the gas” when a more detailed appraisal is justified, while minimising the distraction from fee-earning.
For more information about monitoring service, Brussels visits and brokering solutions, see http://eurinco.farming.officelive.com/default.aspx or contact peter.fane@eurinco.eu
Brokering solutions in Brussels
Note: while Eurinco is registered as a lobbyist, we do not undertake lobbying as such.
While current Defra ministers are exceptionally effective in the Council of Ministers, the Council works on the basis of QMV (qualified majority voting) and the Commission can only be over-ruled by unanimity - a rare phenomenon in a council of 27 (soon to be 28) members.
UK ministers and officials strive to sustain alliances with other member states on particular issues, and with a few on the overall approach to CAP reform and the budget; but they will rarely be in a position to secure even a blocking minority in the council or the SCA (Special Committee on Agriculture), let alone a qualified majority for any British proposal.
So if changes, however minor, are to be secured, they need to be acceptable to the Commission; and to be promoted by MEPs on the relevant committees, with support from other Groups and MEPS from other member states.
Eurinco takes small groups of farmers to Brussels from time to time to discuss key proposals with Commission officials and MEPs (we recently took clients to meet key Commission officials on alternative approaches to 'greening pillar 1' and on the role of energy crops within the proposed EFAs).
We work closely with NFU and CLA, who we would usually suggest as the first port of call for farmers and landowners needing to address potential problems or to promote particular business opportunities in relation to legislation.
However, we also help agri-businesses and professional firms to secure a better understanding of the proposals (and the thinking behind them) through meetings with key officials; and we can address specific issues impacting your business or that of your clients which may not be high priorities for industry-wide bodies.
Business restructuring or adjustment in anticipation of policy changes
In some cases, responding to future policy changes may mean restructuring the business to safeguard future payments or to maintain operational freedom.
Structural changes to the business should only be considered when they do not damage operational efficiency. It would rarely be benficial, in our experience, to split the business into separate units (for instance to avoid the impact of capping) and there are in any case anti-avoidance provisions in the legislation.
However, other changes can often be made without damaging, maybe even to enhance, operational effectiveness. Have you considered, for instance, what level of labour costs can be set against your future payments?
Small adjustments to the business structure and to contract farming and other arrangements can sometimes help to avert undue losses to future payments which might result, for instance, from the definition of 'active farmer'. Have you considered the relationship between your farm payments and non-agricultural income to the same business, or the implcations if different parties now claim SPS and agri environment payments on the same land?
If business change or restrucuring is to be considered, it is important that this is undertaken in good time and for sound business reasons.
Eurinco, in conjunction with a specialist rural law firm, offers a joint professional approach with surveying, legal and agricultural expertise being combined to advise you on the best options for your situation.
The Council of Ministers discussed the proposals on direct payments at Luxembourg on 26th and 27th April '12:
See CAP reform section for an update on these and other recent discussions.
The public events and the press conferences in the Farm Council can be followed at
http://video.consiliums.europa.eu, and there will be video coverage of the event on http://tvnewsroom.consilium.europa.eu .
Changes to the rules on voluntary modulation (Nov 2011)
REGULATION 1231/2011 of 16 November 2011 amends the existing Council Regulation (378/2007) on the rules for voluntary modulation of direct payments under the common agricultural policy.
See http://eur-lex.europa.eu/Result.do?arg0=common+agricultural+policy&arg1=&arg2=&titre=titre&chlang=en&RechType=RECH_mot&Submit=Search
EP Agriculture committee chair Paulo de Castro (above) comments on the start of negotiations about the CAP post 2013
The discussion about the future CAP is not only crucial for farmers but for all European citizens, since it deals with the challenge of food security, Paolo De Castro said as negotiations start on a new EU farm policy for 2014-2020.
The "greening element" in the European Commission proposal for CAP reform, particularly the setting aside of 7% of farmed land for ecological purposes, could lead to more bureaucracy, which would be an additional burden for EU farmers. The proposed measures would "keep production down instead of promoting it".
Read more: http://www.europarl.europa.eu/news/en/headlines/content/20111110STO31142/html/De-Castro-need-for-a-more-flexible-and-productive-CAP
Member states confirm their positions on greening the CAP and capping of payments, ahead of the Council of ministers meeting in Luxembourg (April '12):
Germany has repeated its call for cuts to be made to all headings under the EU budget for 2014-2020 (April 18th). In discussions on the ‘negotiating box’ related to Heading 2 (Sustainable growth – natural resources) of the budget, it became clear that the Commission proposals to narrow the gap in the distribution of direct aid across the EU, together with the proposals for mandatory ‘greening’ of Pillar 1 are the main areas of contention for most member states.
A number of delegations, including Portugal, have asked for “a more ambitious approach” to redistribution of payments. Poland, supported by Bulgaria, has argued that a flat rate payment should apply across the EU within the next six year period.
Germany, with Belgian support, warned against any sudden losses for recipients in the older member states, and called for an adequate adjustment period.
On the greening element of the 1st Pillar, a number of member states argued that for this to take up 30% of the budget was too ambitious, but France supported the Commission line in insisting that this measure would add to the legitimacy of the CAP.
Other members states called for Member States to have more control over the greening measures, favouring a more voluntary approach, and UK pushed for environmentally friendly farming practices to be supported under existing Rural Development measures.
Meanwhile, the UK delegation, with support from six other member states, objected to the capping of payments for large farmers, while France had support from Finland and Spain in supporting the proposal.
See CAP reform section for report on Council of Ministers discussions on greening the CAP (May 2012). A further debate under the Danish presidency will be held on rural development proposals (June '12).
Panorama - 'The money farmers'
BBC One 8.30pm Mon 5th March 2012
'Samantha Poling reveals how millions of pounds of public money are being paid out to businessmen and millionaire farmers in an abuse of the farming subsidy system. Investors tell us how they have been paid without having to do any farming at all.'
"Millions have been paid to very wealthy landowners while poor farmers struggle because they cannot afford to buy the rights they desperately need to survive. Another crazy EU scheme..."?
http://www.youtube.com/watch?v=24SOiKZzTZ8
The CAP Healthcheck 2008
The CAP Healthcheck set out the “new challenges” of climate change, water management and renewable energy, on which future rural development funding is to be concentrated.
The Healthcheck remains the basis for the CAP until new Regulations are agreed, probably early in 2013.