The document discusses whether European agricultural policy could do more to promote biodiversity. It summarizes the biodiversity targets in the EU Biodiversity Strategy 2020 and finds a lack of progress towards these goals. It then analyzes specific CAP measures introduced in 2013, such as ecological focus areas and permanent grassland protections, finding they have limited additionality and environmental benefits. The document concludes by outlining upcoming opportunities and challenges for strengthening the CAP's support of biodiversity objectives in the next reform period.

1. COULD EUROPEAN
AGRICULTURAL POLICY DO MORE
TO PROMOTE BIODIVERSITY?
Alan Matthews
Trinity College Dublin
alan.matthews@tcd.ie
Presentation to the Teagasc Biodiversity Conference
“Farmland Conservation with 2020 Vision”
Portlaoise, Co. Laois
21st & 22nd October 2015

2. EU Biodiversity Strategy 2020 & the CAP
• Target 3A of the Biodiversity Strategy
• By 2020, maximise areas under agriculture across
grasslands, arable land and permanent crops that are
covered by biodiversity-related measures under the CAP
so as to ensure the conservation of biodiversity and to
bring about a measurable improvement in the
conservation status of species and habitats that depend
on or are affected by agriculture and in the provision of
ecosystem services as compared to the EU 2010
Baseline, thus contributing to enhance sustainable
management.

3. Lack of progress towards biodiversity goals
highlighted in 2020 Strategy Mid-Term Review
Changes in conservation status of
habitats associated with agricultural
ecosystems - 2007-13 vs 2001-2006

4. Agriculture and biodiversity
• Policy is complicated by the different and non-linear
relationships
• Positive: Much farmland biodiversity due to agricultural practices
and depends on continued active management
• Negative: Much farmland biodiversity loss due to agricultural
practices arising from intensification
• Negative: Land used for nature is not available for food or energy
production
• Positive: Agricultural productivity and resilience depend on
biodiversity, at least over the longer-term
• An area typified by market failures

5. The promise of the 2013 reform : a CAP
focused on delivering public goods
• Three objectives of the reform
• Objective 1: Viable food production
• Objective 2: Sustainable management of natural
resources and climate action
• Objective 3: Balanced territorial development

6. 2013 CAP reform and biodiversity
• Pillar 1:
• Mandatory 30% DP national ceiling for green payment in return
for three practices beneficial for the environment and climate
• Ecological Focus Areas
• Retention of permanent grassland
• Crop diversification
• Up to 5% national ceiling could be devoted to ANC payments
• Only Denmark made use of this option
• Pillar 2
• Initial MFF funding -18% reduction 2020 vs 2013 real terms
• Flexibility of funding between P1 and P2 resulted in net transfer of €3
billion to P2 (+ proceeds of capping)
• Greater flexibility for MS to choose appropriate measures
• but 30% required spend on agri-environment-climate
• State aids

7. Source: Euractiv
Green
spending in 6
large EU
member states
– big increase in
spending
labelled ‘green’,
but will there be
a commensurate
improvement in
biodiversity
status?

8. Ecological focus areas – the obligation
• Where the arable land of a holding covers more than 15
hectares, the farmer shall ensure that an area corresponding to
at least 5% of the arable land of the holding is ecological focus
area.
• Exemptions:
• Holdings with less than 15 ha of arable land;
• If more than 75% of the eligible agricultural area is permanent
grassland, used for herbaceous forage or for the production of crops
under water, unless the arable area is over 30 hectares;
• If more than 75% of the arable area is used for production of grasses
or herbaceous forage, for leguminous crops or is land laying fallow,
unless the arable area is over 30 hectares:
• If the holding is an organic farm;
• Permanent crop area (as this is not considered arable land):
• ‘Forest exemption’

9. EFAs – MS could choose up to 10 elements
(further choices under landscape elements)
Source: DG AGRI
Counting individual landscape elements, 5 member states
allow between 2-4 elements, 10 member states between 5
and 9, and 14 member states 10 or more.

10. Source: Commission
Delegated Regulation
(EU) No 639/2014
Various
elements are
converted to
area
equivalents
and weighted
for
environmental
(mainly
biodiversity?)
impact

11. EFAs– benefits for biodiversity
• Depends on
• (a) the additional efforts farmers are required to undertake
in order to receive the green payment, and
• (b) the extent to which these additional efforts will
contribute to conserving biodiversity.
• There is thus both a quantitative and a qualitative element
in the evaluation.

12. Limited additionality of current EFAs
• Some arable area is exempt
• holdings less than 15 ha of arable land account for between 54-
59% of holdings with arable area accounting for between 13-21%
of the total arable area
• Limited extent of non-compliant arable area
• With the broad range of EFA elements permitted, the majority of
arable holdings will be able to meet their 5% obligation with their
current practices.
• One calculation puts the area of non-compliant land likely to be
affected at around 20% of the total arable area
• Suggesting EFAs might lead to lead to <1% of land use change on
the total arable area

13. Non-compliant EFA area is quite small….
Source: Gocht 2015

14. Non-compliance
after protein
crops (0.7),
fallowed land
(1), cover crops
(0.3) are
accounted:
Percent of EFA
obligation
(percentage of
the 5%
obligation)
Source: Gocht, CAPRI
…but differs between member states

15. EFAs – other considerations
• Qualitative evaluation - Limited biodiversity benefits derive
from some EFA elements
• What choices have farmers made in selecting EFA
elements?

17. Distinguishing between the gross and net
impact of EFAs
• EFAs not only change farm practices on the EFA areas,
but also have indirect effects for farm practices on non-
EFA areas
• To the extent that EFAs take land out of production, farmers will
respond by intensifying inputs on the remaining land
• Where crop prices increase because of reduced supply if EFAs are
truly additional, this could lead to an expansion of the arable area
at the expense of permanent grasslands which are also deemed
important for biodiversity
• If intensification did not happen, more of the production foregone by
EFAs would simply be displaced to another part of the world
• ILUC effect could result in greater loss of global biodiversity if, for
example, area expansion was at expense of tropical rainforest
• .

18. Permanent grassland - obligations
• Member States shall designate permanent grasslands which
are environmentally sensitive in Natura 2000 areas
• Member States may, in order to ensure the protection of
environmentally valuable permanent grasslands, decide to
designate further sensitive areas situated outside these areas,
including permanent grasslands on carbon-rich soils.
• Farmers shall not convert or plough permanent grassland situated in
areas designated by Member States under the first subparagraph and,
where applicable, the second subparagraph.
• Member States shall ensure that the ratio of areas of
permanent grassland to the total agricultural area does not
decrease by more than 5% compared to 2015 reference ratio.
Obligation can apply at national, regional, sub-regional or even
holding level where necessary to achieve objective.
• Where ratio falls below 5%, farmers who converted permanent
grassland to other uses can be required to reconvert.

19. Permanent grassland decisions
• Almost all Member States decided to manage the ratio of
permanent grassland at national level. Only four MS
opted for the calculation of the ratio at the regional level
(BE, FR, DE, UK).
• Four Member States decided to designate
environmentally-sensitive permanent grassland (ESPG)
outside Natura 2000 areas (CZ, LV, LU, UK-WA).
• New ESPG can be added on annual cycle, with farmers being
given notice in due time

20. Source: DG AGRI

21. Not all grassland is equal in biodiversity terms
• No distinction made between intensively-managed
grassland and high nature value grasslands
• Latter are often semi-natural grasslands, scrub or woodland
• Only obligation for ESPG is not to plough
• Key issue for HNV grasslands is how to maintain farming
activity while discouraging intensification
• In some regions, these areas are not deemed eligible land
for direct payments, e.g. wooded pastures
• Limited scope to link Pillar 1 payments to specific HNV
farming systems

22. Crop diversification
• Farms with arable area > 10 ha minimum of 2 crops, > 30
ha minimum of 3 crops
• JRC 2015 study
• 70% total holdings exempted either inc non-arable farms, farms
with small arable areas or arable farms with large areas planted to
fodder crops
• 30% of holdings covered, of which 15% non-compliant
• Taking benefit/cost of compliance into account, proportion of non-
compliant farms falls to 10% (+ reduction of non-compliant area)
• Total area of land brought into compliance < 1% of arable area
• Environmental benefits of crop diversification
• Not all net, as greening replaces GAEC standard requiring crop
rotation (weakly enforced)

23. RDPs – 6 priority areas, several focus areas per
priority
DG AGR May 2015

24. DG AGR May 2015

25. DG AGR May 2015
Note: 27% of UAA
covered by AEMs in
2007-2013 + further area
under Natura 2000

26. CAP built-in agenda 2015-2020
• 2016 review of experience with EFA’s in first year to
assess if there is a noticeable reduction in production
• 2017 evaluation of EFAs before end-March accompanied,
where appropriate, by a proposal for a legislative act to
increase the arable area covered by EFAs from 5% to 7%.
• Hogan commitment to widen this review to cover other aspects of
simplification of direct payments
• End 2016 mid-term review of the MFF – ‘revision clause’
• Will determine, inter alia, duration of next MFF
• End 2018 first report on performance of CAP under the
common monitoring and evaluation framework
• End 2017 Commission must present proposal for new
MFF – will propose CAP budget for period after 2020

27. Political economy drivers of next reform
• Economic situation of farming to 2020
• Outcome of negotiations on the next EU budget (MFF)
• Need for time to assess environmental impacts of the
2013 CAP reform
• ‘Reform fatigue’ among member states
• Commission focus on jobs and growth rather than
provision of public goods
• The unpromising legislative timetable for next CAP reform
• Yet, institutions seem to be gearing up for a substantive
CAP review

28. Future biodiversity directions – (1)
• Recall the dual demands on agricultural policy in promoting
biodiversity – support low-intensity farming and manage high-
intensity farming to protect biodiversity
• One direction - build on the Pillar 1 greening/cross-compliance
approach
• Has the advantage that (some) intensive farms are obliged to comply
with limited biodiversity practices
• Extend area of EFAs – 7%, 10% ?
• Remove exemptions
• But, Pillar 1 approach
• Pillar 1 measures constrained by requirement that they must be
‘simple, annual and generalizable’
• Pillar 1 measures do not require active management (non-contractual)
and they are not targeted.
• Huge opposition to moving payments from ‘productive’ farmers to
farmers in marginal areas simply on basis of land ownership

29. Future biodiversity directions – (2)
• Other direction is to emphasise a results-based
approach
• Payments should be provided not per hectare but per unit of public
good provided
• Transfer the greening budget from P1 to P2 and use to
strengthen agri-environment-climate schemes in RDPs
• Advantages of the targeted, contractual approach
• Active management
• Risky – funds might be lost to agriculture altogether
• Member state hostility to P2 (co-financing, absorption
problems, programming overhead, higher transactions
costs)

30. Future biodiversity directions – (3)
• Three longer-term perspectives
• Serious move in COMAGRI in the European Parliament to move
green payment to Pillar 2, maybe even as early as 2018 (no co-
financing)
• Talk about merging the EU’s Structural and Investment Funds
(Cohesion, Regional, Social, Fisheries, Rural Development) into a
single Fund – what implications for the land management elements
of Pillar 2?
• Move responsibility for agri-environment to DG ENVI rather than
DG AGRI (delivery could be contracted to agric advisory services)

31. The role for biodiversity advocates
• Communicate clear messages on what works for biodiversity
• Telling lack of ecological input to Commission’s impact assessment of
the green payment
• What lessons can be learned from the land-sharing versus
land-sparing debate for the appropriate spatial scale at which
to integrate food production and biodiversity?
• How can monitoring be undertaken accurately and cheaply to
allow the development of more results-based agri-environment
schemes?
• Can we improve our methods of putting an economic valuation
on natural capital and biodiversity to assist in making the
complex trade-offs not only between food production and
biodiversity, but between different environmental objectives as
well?
• Can we improve the design of agri-environmental schemes so
as to generate larger biodiversity benefits for a given
expenditure?

32. I look forward to the debate
Thank you