European policy consultants
Rural development and renewable energy

22 / 23 October 2012 Farm and Fisheries Council meeting:

Ministers held three 'orientation debates' on CAP reform in the October Farm Council.

Discussions focussed on specific issues in:
· the proposal for a regulation establishing rules for direct payments to farmers (the direct payments regulation, 15396/3/11);
· the proposal for a regulation establishing a common organisation of the markets in agricultural
products (the 'Single CMO' regulation, 15397/2/11); and
Direct payments - 'Internal convergence' (ie. equalisation of payment rates) and the young farmers scheme


Owen Paterson MP, new Defra Secretary of State (September '12).

The debate on direct payments focused on:
· (i) internal convergence - the Commission proposal that member states achieve a
uniform level of direct payments at regional or national level by 2019; and
· (ii) the young farmer scheme to help those under 40 to secure access to agriculture (14993/12).
It was widely accepted that a direct payment system based on purely historical level of payments constitutes an outdated concept in need of reform.

Many delegations insisted that all member states should achieve significant progress towards the principle of uniform payments per hectare, though views are diverging on the goal of 2019 proposed by the Commission.

On the methodology of the internal convergence, many delegations were in favour of a
more gradual process.

A number of member states applying the Single area payment scheme (SAPS) requested an arrangement allowing a smooth transition to the new payment scheme.

On the scheme for young farmers, there was a widespread view that ageing of the farming
population is an EU-wide issue, and many delegations agreed on the need for a common EU framework to address this issue provided that this allows member states to tailor measures according to the specific need of their young farmers.

There was much support for a voluntary first pillar scheme alongside the existing voluntary second pillar scheme.

Note: see earlier orientation debates on internal convergence and young farmers scheme in
April 2012.

The proposal for a Single CMO regulation would lay down rules for the common organisation of agricultural markets. In order to strengthen the bargaining power of farmers and the functioning of the food supply chain the Commission proposes to extend current provisions applying in the fruit and vegetables sector to producer organisations (POs) and inter-branch organisations (IBOs) in all sectors (14994/12).

Most delegations supported the case for strengthening the position of producers in the food chain, but there were different views on how this can be best achieved. A number of member states were opposed to compulsory recognition being extended beyond the milk and fruit and vegetable sectors.

Many delegations held that producer organisations should be strenthened in all agricultural sectors.

The CAP reform package was presented by the Commission at the Agriculture Council meeting in October 2011. Since then, the Council has held general policy debates on the CAP reform proposals almost monthly.

The debate in July 2012 Farm Council covered the proposed risk management and income stabilisation tools under rural development policy.

Also 'exceptional support measures' under the single CMO (measures to respond to threats of market disturbances or animal disease and loss of consumer confidence).

The second debate on the single CMO in September focused on the safety net function of market management measures and the case for updating reference prices.

In September there was also a debate on areas with natural constraints (previously referred to as LFAs, or less favoured areas under rural development policy).

In March 2102 ministers held a debate on the simplification of the CAP.

In April the Council held an orientation debate on young farmers, small farmers, voluntary coupled support and top ups for farmers in areas with natural constraints, as well as on the definition of "active farmer" and the capping of support to large farms.

In May the Council held another orientation debate on the greening of the CAP.

In June the Coucil held a debate on rural development issues. The Danish Presidency also presented a progress report highlighting the progress achieved during the first half of 2012 on key issues of the CAP reform proposals.

The Commission briefed the Council on an amendment to a proposal for a regulation on the
financing, management and monitoring of the CAP (the "horizontal regulation" in CAP reform package).

Some amendments were discussed on the proposal to publich names of beneficiaries of CAP support. Some member argued that all beneficiaries of CAP payments should be listed, with no 'de minimis' threshold. Others expressed concern about the details given on individual beneficiaries and requested an opinion of the Council Legal Service.

In addition, to amendments to the provisions related to cross-compliance for Croatia in view of its imminent accession, the proposal on the horizontal regulation also includes amendments, regarding new rules on the publication of information on all beneficiaries of the EU agricultural funds.

The new rules, amended to take account of a Court of Justice ruling
· are based on a revised detailed justification, centred around the need for public control of the use of European agricultural funds in order to protect the Union's financial interests;
· require more detailed information to be given on the nature and description of the measures for
which the funds are disbursed;
· include a de-minimis threshold below which the name of the beneficiary will not be published.