European policy consultants
Rural development and renewable energy

Crunch meeting of the Farm Council decides position on CAP reform

The Council meeting started at 10.00am on Monday 18 March 2013 and continued on Tuesday. It was chaired by Simon Coveney, Irish Minister for Agriculture, Food and the Marine.

Over lunch on Tuesday, ministers held a discussion on the outlook for European agriculture.

The Council reached agreement on a general approach on the four main proposals for regulations setting the framework of reform of the common agricultural policy (CAP).

The four key regulations are:
- the proposal for a regulation establishing rules for direct payments to farmers
(15396/3/11). The direct payment regulation seeks to better target support for specific
actions, areas or beneficiaries, as well as to pave the way for convergence of the support
level within and across member states;
– the proposal for a regulation establishing a common organisation of the markets in
agricultural products (15397/2/11). The single common market organisation (CMO)
regulation aims to streamline, expand and simplify the current provisions on public
intervention, private storage, exceptional or emergency measures and aid to specific
sectors, as well as to facilitate cooperation through producer and interbranch organisations.
– the proposal for a regulation on support for rural development (rural development
regulation) (15425/1/11). The rural development regulation covers voluntary measures for
rural development, adapted to national and regional specificities, whereby member states
draw up and co-finance multiannual programmes under a common framework in
cooperation with the EU; and
– the proposal for a regulation on the financing, management and monitoring of the CAP
(horizontal regulation) (15426/1/11). The horizontal regulation lays down rules concerning
expenditure, the farm advisory system, the management and control systems to be put in
place by member states, the cross-compliance system and the clearance of accounts.

This agreement constitutes a political agreement in the Council on the CAP reform package. This will enable negotiations to be launched between the Parliament and the Council with a view to a political agreement in June this year.

The Irish Presidency of the Farm Council had drafted a comprehensive package of amendments aimed at taking account of as many of the member states' concerns as could reasonably be accommodated (7183/13, 7329/13, 7303/13, 7304/13).

The agreement on the basic payment scheme is based on the Presidency compromise
package considered by the Council in February this year (6638/13). It provides in particular for
increased flexibility on convergence of the level of direct payments at national or regional level by allowing member states to move towards partial rather than full convergence by 2019, to limit the first convergence step to 10% of the national or regional ceiling, to employ alternative convergence options, and to apply convergence to the greening payment.

A voluntary extension of the Single Area Payment Scheme (SAPS) until 2020 in the member states applying the system is now foreseen. A provision to allow them the option to grant transitional national aid in the period 2015 to 2020 has been included.

On greening pillar 1, the agreement reflects the European Council conclusions of 7-8 February
on the Multiannual Financial Framework (MFF) and
– adjust and clarify the scope of 'equivalent practices' (practices which yield an equivalent or
higher benefit for the climate and the environment compared to the greening practices
proposed by the Commission);
– provide for a progressive application of the crop diversification requirements and clarify
the exemptions to that requirement;
– adjust the applicable minimum ratios of permanent grassland in relation to the total
agricultural area;
– allow for a graduated application of the Ecological Focus Area (EFA) requirement starting
with 5% and adjust the scope of eligible EFA after an evaluation report from the
Commission (2017) in order to increase it to 7% in 2018 if appropriate;
– allow for 50% of the EFA requirements to be applied at regional level and/or collectively
by groups of farmers, and clarify the weighting factors and exemptions.

Some exemptions to the crop diversification requirements, and further adjustments to the scope of eligible EFA (and the exemptions) have been better defined.

In the European Council conclusions on MFF, provisions on capping and flexibility between pillars were also included. The agreement introduces a voluntary 'redistributive payment' which would allow member states to grant a top-up on the basic payment for the first hectares of each farm and in so doing take account of the greater labour intensity on smaller farms and the economies of scale of larger farms.

For financing the voluntary coupled support, a provisions gives the opportunity to member states to use up to 7% of their annual national ceiling or 12% of this ceiling if they apply the SAPS system.

Single CMO Regulation:
The agreement extends the sugar quota regime until the 2016/2017 marketing year.
Specific provisions for the hops sector have been included to the current provisions of the text.
Provisions on vine plantings reflects the outcome of the High Level Group on vine planting rights.
– the introduction of a new authorisations system for the regulation of vine plantings for all
categories of wine, applying to all wine-producing member states for 6 years (1 January
2019 to 31 December 2024);
– free, non transferable authorisations granted at the request of applicants, and expiring after
3 years if not used;
– annual authorisations for new plantings granted by member states corresponding to 1% of
the planted vine areas;

The provisions on measures against market disturbance is intended to ensure that the Commission has tools at its disposal which are sufficiently flexible to deal with significant disturbances in the market where the deployment of more traditional market support instruments appears inadequate.

Horizontal regulation:
The agreement provides that the administrative penalty imposed on farmers for
non-compliance with the "greening" requirements shall not exceed 25% of the "green" payment.

Rural development:
Concerning agri-environment-climate payments, the "greening" payments have been excluded from the baseline.
As regards areas with natural constraints, the agreement has included flexibility by suggesting that the phasing out of payments become degressive by 2016 at the latest and Member states may decide to start, and finish, the phasing out earlier.
The aggregation threshold for the new delimitation has been maintained at 60%. Furthermore, when
carrying out the fine-tuning exercise to exclude areas in which significant natural constraints have
been overcome, member states can also consider evidence of normal land productivity.
Greater flexibility has also been provided regarding areas which were eligible during the current
programming period. In those areas, Member States may apply a combination of two biophysical criteria at a lower threshold for the delimitation.

Finally, the support rates (in Annex I) have been adapted in order to take into account the
introduction of transition regions, and to increase the rates for measures related to forestry
technology and crop, animal and plant insurance.

See www.consilium.europa.eu

The public debates in Council and the press conferences at the end can be followed by video streaming:
video.consiliums.europa.eu