CAP reform proposals


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Scottish Government officials are currently touring Scotland with a series of public meetings to explain the CAP reform proposals.

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CAP reform proposals

  1. 1. The Common Agricultural Policy 2014-2020: proposals from the European Commission David Barnes/Drew Sloan Dec 2011 - Jan 2012
  2. 2. Purpose of these meetings <ul><li>To inform you about the European proposals for the future CAP </li></ul><ul><li>So that you can begin to think about preparing for it </li></ul><ul><li>To set out Scottish Government’s views at this stage </li></ul><ul><li>To hear your informal views and comments </li></ul><ul><li>And to enable you to give us well-informed formal feedback via our consultation exercises. </li></ul>
  3. 3. Caveats <ul><li>Some things still need clarification from the Commission. </li></ul><ul><li>Everything in the proposals is subject to change in the negotiations. </li></ul><ul><li>The consultation exercise is designed to inform SG’s final position, so what we set out tonight is just an interim position. </li></ul><ul><li>How the new CAP will be implemented in Scotland will be the subject of a separate consultation process nearer the time. </li></ul>
  4. 4. What tonight will cover <ul><li>Introduction/background: </li></ul><ul><ul><li>Procedure </li></ul></ul><ul><ul><li>Budget </li></ul></ul><ul><ul><li>Timetable </li></ul></ul><ul><li>The content of the European proposals: </li></ul><ul><ul><li>Pillar 1 </li></ul></ul><ul><ul><li>Pillar 2 </li></ul></ul><ul><ul><li>Issues common to both pillars </li></ul></ul><ul><li>Next steps </li></ul><ul><li>Q&A </li></ul>
  5. 5. Introduction <ul><li>The EU is negotiating its budget and policies for 2014-2020. </li></ul><ul><li>Three EU institutions are involved: </li></ul><ul><ul><li>European Commission </li></ul></ul><ul><ul><li>Council of Ministers </li></ul></ul><ul><ul><li>European Parliament </li></ul></ul><ul><li>Only the European Commission can table a proposal: focus tonight is on the Commission’s proposals for the CAP. </li></ul><ul><li>Council of Ministers and European Parliament then negotiate and decide. </li></ul>
  6. 6. CAP Budget and CAP rules will be decided separately <ul><li>CAP budget will be considered alongside the rest of EU budget, by Finance Ministers and Heads of Government. </li></ul><ul><li>CAP rules will be negotiated and decided by Agriculture Ministers and the European Parliament. </li></ul>
  7. 7. CAP budget <ul><li>Commission proposal is roughly a “flat cash” budget for CAP 2014-2020, which means a decline in value in real terms (no uplift for inflation). </li></ul><ul><li>Commission proposes redistribution of the budget, to boost Pillar 1 payments in new Member States and to make Pillar 2 fairer. </li></ul>
  8. 8. Pillar 1 Direct Payments budget <ul><li>Commission proposal for “convergence” to help new Member States: those below 90% of EU average €/ha get an uplift. </li></ul><ul><li>Proposed UK Direct Payments ceiling is slightly down. </li></ul><ul><li>Within-UK allocations not yet known. </li></ul><ul><li>Scotland’s average €/ha is as low as some new Member States. </li></ul>
  9. 9. Pillar 2 Rural Development budget <ul><li>Commission proposes to use more objective criteria than in the past to allocate Member State shares. </li></ul><ul><li>UK allocation not yet known. </li></ul><ul><li>Criteria should lead to bigger percentage shares of the EU RD budget for UK and Scotland. </li></ul><ul><li>Total RD budget in Scotland 2014-2020 will also depend on how big the EU RD budget is, and how much national co-financing money is available. </li></ul>
  10. 10. CAP rules <ul><li>What’s happened so far: </li></ul><ul><li>2009-2010 gathering ideas - Commission consultation exercise, Council discussions, Lyon report. </li></ul><ul><li>Pack Inquiry into future farm support. </li></ul><ul><li>Nov 2010 Commission options paper. Council discussions, Dess report. </li></ul><ul><li>Oct 2011 Commission issues formal proposals designed to meet its objectives. </li></ul>
  11. 11. Two Pillars, four regulations <ul><li>Pillar 1 </li></ul><ul><li>Direct Payments </li></ul><ul><li>Market measures (“Single CMO”) </li></ul><ul><li>Pillar 2 </li></ul><ul><li>Rural Development (“RDR”) </li></ul>Financing and monitoring (“Horizontal” regulation) EU implementing rules (“Delegated Acts”)
  12. 12. Commission’s ideal timetable <ul><li>CAP proposals issue 12 October 2011. </li></ul><ul><li>EU and CAP budgets decided summer 2012. </li></ul><ul><li>CAP regulations finalised end 2012 or early 2013. </li></ul><ul><li>EU-level and Member State-level implementing rules and legislation adopted during 2013. </li></ul><ul><li>New regime 1 Jan 2014. </li></ul>
  13. 13. If the timetable slips <ul><li>Pillar 1 Direct Payments and Market Measures – status quo could essentially continue until the new system begins, Eg on 1 Jan 2015. </li></ul><ul><li>Pillar 2 Rural Development Programmes – risk of a gap between current programmes and new ones unless “bridging” arrangements are agreed. </li></ul>
  14. 14. Content of the EU proposals <ul><li>Pillar 1 Direct Payments </li></ul><ul><li>Next slides from the Commission’s own presentation: </li></ul>
  15. 16. Who would have entitlements under the proposals ? <ul><li>All current entitlements would expire. </li></ul><ul><li>Entitlements under the new system would be allocated to: </li></ul><ul><ul><li>farmers who are actively farming in 2014 and submit a claim, and who activated at least one SFP entitlement in 2011. </li></ul></ul><ul><ul><li>and people eligible for the National Reserve. </li></ul></ul>
  16. 17. National Reserve <ul><li>Funded by one-off deduction of up to 3% of Scotland’s total Direct Payments. </li></ul><ul><li>Priority given to farmers under 40 who started farming in the last 5 years. If necessary to meet this demand, the 3% can be increased. </li></ul>
  17. 18. Who is an active farmer ? <ul><li>Direct Payments must be at least 5% of non-agricultural income (unless Direct Payments <€5,000). </li></ul><ul><li>Must grow crops/keep livestock; or keep the land in condition suitable for grazing or cultivation. </li></ul><ul><li>Member States/regions can impose minimum activity on land which remains in good condition even without management. </li></ul><ul><li>Minimum claim size and hectarage. </li></ul>
  18. 19. 1. Basic Payment <ul><li>What’s left after the various deductions have been made. </li></ul><ul><li>Can be regionalised, on objective criteria. </li></ul><ul><li>In 2014, 40% of the Basic Payment ceiling is area-based. Remainder shared out according to historic SFP. </li></ul><ul><li>By 2019, must be 100% area-based and all entitlements within a region must be equal. </li></ul><ul><li>Transition profile fixed in advance, in 2013. </li></ul>
  19. 20. 2. Greening <ul><li>If >3ha of cropping, minimum 3 crops each covering >5% and <70%. </li></ul><ul><li>Permanent grassland (>5yrs) must be maintained as declared in 2014. </li></ul><ul><li>Each holding must have Ecological Focus Area (buffer strips, landscape features, fallow etc) equal to 7% of arable and temporary grass area. </li></ul><ul><li>Organic farming qualifies automatically. </li></ul>
  20. 21. 3. Young farmer top-up <ul><li>Compulsory for Member States. 25% top-up per hectare, up to a limit on hectares. </li></ul><ul><li>Limit must be set between 25ha and average holding size in UK (54ha). </li></ul><ul><li>Under 40, and max. 5 years after establishment. </li></ul><ul><li>Up to 2% of Scotland’s total Direct Payments. </li></ul>
  21. 22. 4. Coupled support <ul><li>Voluntary for Member States/regions. </li></ul><ul><li>Replaces Article 68 and pre-SFP schemes (SCPS, SAPS etc) which some member States are still using. </li></ul><ul><li>Limited to fixed no. animals and to payment rates necessary to maintain current production. </li></ul><ul><li>Up to 5% of total Direct Payments, except for Member States currently using >5%. </li></ul>
  22. 23. 5. Area of Natural Constraint (ANC) top-up <ul><li>ANC = new designation for LFA </li></ul><ul><li>Top-up voluntary for Member States/regions. </li></ul><ul><li>Up to 5% of total Direct Payments. </li></ul><ul><li>Payable on all or part of ANC, according to objective criteria. </li></ul><ul><li>Must be deducted from Pillar 2 ANC support (LFASS). </li></ul>
  23. 24. Progressive reductions/capping <ul><li>Payments reduced by: </li></ul><ul><li>20% from €150,000 to €200,000 </li></ul><ul><li>40% from €200,000 to €250,000 </li></ul><ul><li>70% from €250,000 to €300,000 </li></ul><ul><li>100% above €300,000 </li></ul><ul><li>Salaries/employment costs are deducted. </li></ul><ul><li>Greening payments are exempt. </li></ul><ul><li>Proceeds used in Pillar 2 for innovation. </li></ul>
  24. 25. Small farmer scheme <ul><li>Compulsory for Member States, optional for the farmer (one-off decision in 2014). </li></ul><ul><li>Up to 10% of total Direct Payments. </li></ul><ul><li>Fixed payment, between €500 and €1,000. </li></ul><ul><li>Replaces other payments inc. coupled payments. </li></ul><ul><li>Minimum no. hectares. </li></ul><ul><li>Exempt from greening and from cross-compliance penalties. </li></ul>
  25. 26. Pillar 1 Market measures <ul><li>EU has moved from permanent intervention in the market to safety-net only. </li></ul><ul><li>Provision for emergency measures in the event of extreme market disruption. </li></ul><ul><li>Milk quotas already being phased out, sugar quotas proposed to be phased out. </li></ul>
  26. 27. Pillar 2 Rural Development: current rules <ul><li>7-year programmes approved by Commission. </li></ul><ul><li>Co-financed by EU and domestic money. </li></ul><ul><li>Axis 1 farm business development (capital, skills). </li></ul><ul><li>Axis 2 agri-environment (capital and annual), LFA, woodlands, animal welfare. </li></ul><ul><li>Axis 3 diversification and community projects. </li></ul><ul><li>LEADER. </li></ul>
  27. 28. Pillar 2 Rural Development: proposals for 2014-2020 <ul><li>Evolution not revolution. </li></ul><ul><li>Common Strategic Framework – joined-up approach between RD, EU Structural Funds and EU Fisheries Fund. </li></ul><ul><li>No Axes, no minimum percentages except 25% of EU funds on environment (inc. organic and LFA). </li></ul><ul><li>Possibility for sub-programmes within RDPs. </li></ul>
  28. 29. Less Favoured Areas <ul><li>Re-titled Areas of Natural Constraint (ANC). Defined as: </li></ul><ul><li>Mountain areas, or </li></ul><ul><li>Other areas meeting biophysical criteria (now defined by EU not Member State), or </li></ul><ul><li>Other areas facing specific constraints (eg islands), up to 10% of total area. </li></ul><ul><li>No special budget for each category, but different maximum rates. </li></ul>
  29. 30. “ Other areas” biophysical criteria <ul><li>Temperature, soil quality, slope, wetness or dryness. </li></ul><ul><li>Close to criteria used already to define LFA in Scotland, but less fine-grained: applies to whole ward or parish if 66% of area meets the criteria. </li></ul>
  30. 31. ANC payments <ul><li>Costs incurred or income foregone as a result of natural constraints, compared with non-constrained areas. </li></ul><ul><li>Take account of Pillar 1 ANC top-up. </li></ul><ul><li>Minimum €25/ha, maximum €250/ha (€300/ha for Mountain), degressive above a threshold. </li></ul><ul><li>Transition arrangements for farmers excluded by the new criteria. </li></ul>
  31. 32. Common rules to Pillars 1 and 2 <ul><li>Cross-compliance </li></ul><ul><li>Rules to be followed by Member States (inspections, audit, financial reporting etc): not covered tonight. </li></ul>
  32. 33. Cross-compliance <ul><li>As at present, two elements: </li></ul><ul><li>Statutory Management Requirements (SMRs) and </li></ul><ul><li>Good Agricultural and Environmental Condition (GAEC). </li></ul>
  33. 34. Statutory Management Requirements (SMRs) <ul><li>EU legislation on environment, animal and plant health, public health, animal welfare, which farmers should be complying with anyway. </li></ul><ul><li>Down from 18 to 13 (15 when Water Framework Directive and Sustainable Use of Pesticides Directive have been implemented). Some animal health SMRs removed. </li></ul>
  34. 35. Good Agricultural and Environmental Condition (GAEC) <ul><li>8 requirements (previously 8 compulsory + 6 optional). </li></ul><ul><li>Retention of permanent pasture removed from GAEC: moved to greening. </li></ul><ul><li>Minimum stocking density removed from GAEC: moved to agricultural activity definition. </li></ul><ul><li>New GAEC: “Protection of wetland and carbon rich soils including a ban on first ploughing” </li></ul>
  35. 36. Cross-compliance penalties <ul><li>Take account of severity, extent and timescale. As at present: </li></ul><ul><li>Penalty can be waived if “minor” non-compliance (but not if risk to public or animal health). </li></ul><ul><li>Negligence: up to 5%, or 15% if repeated. </li></ul><ul><li>Intentional: 20% to 100%. </li></ul><ul><li>Detailed rules set by Commission. </li></ul>
  36. 37. Next steps: Scotland <ul><li>Consultation on Pillar 1, Dec to Feb. </li></ul><ul><li>Already consulted widely on Direct Payments for Pack Inquiry, and we need rapid information on stakeholder views. Questionnaire on SG website, with hard copy alternative. </li></ul><ul><li>Pillar 2, separate approach, including links with Common Strategic Framework. </li></ul><ul><li>These consultations are to inform the negotiating position. Separate exercises later to decide how to implement. </li></ul>
  37. 38. Commission proposal Parliament 1st reading Council 1st reading Parliament 2nd reading Council 2nd reading Conciliation procedure NEXT STEPS: EU By end-2012 or early 2013 ??!
  38. 39. <ul><li>Then: </li></ul><ul><li>EU implementing rules </li></ul><ul><li>Local implementation decisions. </li></ul><ul><li>Local implementation. </li></ul>
  39. 40. <ul><li>Questions </li></ul>