Weaker EU Farm Subsidy “Greening,” Re-coupling Proposed

European parliamentarians voted last week to water down proposals to “green” EU farm subsidy payments, and have called for some payments to be re-coupled to production.

The move relaxes greening plans tabled by the European Commission for the bloc’s post-2013 farm policy, under which all farmers would have to diversify crops, maintain permanent grassland, and protect ecological focus areas as a condition for receiving direct payments.

The package approved by the parliament’s agriculture and rural development committee could still be changed ahead of a March vote in plenary. However, the version passed last week has already come under fire by those environmentalists that had called for more far-reaching reforms.

Farm groups, however, largely welcomed the committee’s vote, while some parliamentarians expressed concern that “re-coupling” farm support to production could reverse the direction of farm subsidy reforms undertaken in recent years.

Committee chair Paolo da Castro defended the proposals, saying the bloc’s Common Agricultural Policy (CAP) “should be more efficient, greener, and able to respond to the enormous challenges ahead of us.”

The committee also voted to maintain sugar production quotas until 2020, rather than phasing them out five years earlier as previously planned. The move was opposed by the Committee of European Sugar Users, but welcomed by African, Caribbean, and Pacific (ACP) countries that benefit from higher EU prices under the scheme through preferential access to the bloc’s market.

“Ecological focus areas” cut to 3 percent

In a blow to green groups’ hopes for stronger biodiversity safeguards, the committee proposed that farmers with more than ten hectares will only have to maintain “ecological focus areas” on three percent of their arable land. These could include fallow land, terraces, hedgerows, ditches, stone walls, ponds, land planted with nitrogen-fixing crops, buffer strips, and afforested areas, according to the committee’s proposal.

However, farmers would be able to use these areas for production if they avoid using pesticides or fertilisers, according to the committee’s proposal.

The Commission had previously proposed that farmers safeguard seven percent of land in order to receive the subsidy payments.

In three years’ time, land devoted to ecological focus areas should rise to five percent, parliamentarians said, with the Commission preparing an evaluation the following year and proposing a further increase if needed.

Crop diversification: small farms exempt

While the European Commission had originally proposed that all farmers with more than three hectares should grow at least three crops on their land, the committee voted to relax this requirement.

Under the new proposals, farmers with less than 30 hectares will only be required to produce two crops, and those with less than ten hectares or with large farms in the north of Scandinavia would be exempt.

Producers with small farms should ensure that the main crop does not cover more than 80 percent of arable land - rather than the 70 percent originally proposed by the Commission. On larger farms, the requirement falls to 75 percent.

Governments to conserve grassland

Whereas the Commission had proposed that individual farms maintain existing permanent grassland at current levels as a condition for receiving future direct payments, the committee proposes that EU member states take the responsibility for protecting grassland and pasture at the national, regional, or sub-regional level.

EU member states would use 30 percent of the resources allocated to them by the European Commission to provide direct payments to farmers for complying with the “greening” measures. If farmers chose not to comply, they would lose the “greening” funds but not face cuts in their remaining direct payments, parliamentarians decided.

“Double funding” stokes controversy

While the Commission had initially proposed that organic farmers be considered to be “green by definition,” the committee voted to expand this category further. Farmers enrolled in agri-environment schemes would now also automatically qualify for the “greening” payment under the new proposals.

However, the committee vote sparked controversy as several parliamentary groups rejected the notion that farmers should be paid twice for the same activity as a result, specifically by receiving both the greening subsidy and payment under agri-environment schemes. Some warned that the move could be illegal under EU rules.

Re-coupling: reversing past reforms?

The new proposals would also allow EU member states to spend up to 15 percent of the money allocated to them by the Commission on “coupled” payments that link support to production, in a move that could reverse earlier efforts to make EU support less trade-distorting.

Special measures were also introduced for sugar, milk, wine, and for fruit and vegetables.

Export refunds were also maintained in the draft legislation, but with a budget of zero. The European Commission has said these should only be abolished as part of a broader deal under the WTO’s Doha Round of trade talks - although an opinion from the parliament’s development committee recently called for them to be ended as part of the current reform.

Capping: a “fairer” EU farm policy?

Under the proposed reform, payments to large farms are capped at €300,000 - a move welcomed by the Socialists and Democrats (S&D) group, but criticised by the Greens as too high a level.

The committee also agreed that member states would decide on who would qualify as an “active farmer” in order to receive the support - although they did set out a list of economic actors that would not be eligible.

“Entities such as transport companies, airports, real estate companies, companies managing sport grounds, campsite operators, and mining companies or other non-agricultural enterprises, to be defined accordingly by member states on the basis of objective and non-discriminatory criteria, shall not, a priori, be regarded as active farmers,” the committee said. In the past, the CAP has often been criticised for allowing payments to groups with links to farming that are, at best, tenuous.

Several parliamentarians argued that the proposed amendments would make the CAP fairer, including by narrowing inequalities in the distribution of payments between member states. The proposals would ensure that no farmer in any of the bloc’s member states receives less than 65 percent of the EU average.