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CAP Reform – more details emerge

 The European Commission continues to leak like a sieve with new details emerging of the draft direct payments regulations due to be released on October 12th. A great deal of caution is required with dealing with leaked information, but it at least provides an insight into the way that the Commission is thinking about the issues. We must also remember that there is a very long process of negotiation ahead, which could remove some of these proposals.

The new details that have emerged include a suggestion that direct aid will only be paid to recipients who obtain at least 5% of their income from agricultural activity (excluding subsidies). Recipients of less than €5 000 in direct aid would be exempt from this rule. This is an attempt to exclude non-agricultural recipients such as utility companies and golf courses and is therefore well intentioned, but it does take the CAP in a highly bureaucratic direction.

There is a suggestion that Member States should set aside up to 10% of their ceilings for financing a lump sum scheme for small farmers, involving reduced environmental requirements. It is proposed that smallholders should gain between €500 & €1 000 under the scheme that aims to cut down on paperwork for the farmers & the authorities.

The Commission has stuck by deadlines of 2019 for countries & regions to move from historical towards regional area payments “in linear reduction steps” & the end of 2028 for payments to move to a single flat rate across the EU.

DG AGRI has raised the threshold for land devoted to ecological purposes such as buffer strips & afforested areas from 5% to 7%. Also, the area of permanent grassland must not fall by more than 5%.

In a new move, DG AGRI seeks to introduce more flexibility for transferring funds between the CAP’s 2 Pillars, with Member States having the option to shift up to 5% of their annual ceiling from P1 to P2. At the same time, 12 MS (including the UK) whose level of direct aid falls below 90% of the EU average may transfer up to 5% of their 2015-2020 RD envelope to Pillar 1 under the draft plans. This sort of reverse modulation is likely to prove highly contentious.

The UK is one of the countries that will be affected by the convergence proposals which would see the gap between their direct aid level & the EU average closed by one third over the 2014-2020 period.





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