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Political Agreement Reached on CAP Reform

After several months of negotiations the European Parliament, European Commission and Agricultural Ministers (from the Council of Ministers) finally reached a political agreement on the Common Agricultural Policy reforms. The 'deal' will determine how the €50 billion a year pot is distributed between 2014 and 2020. Trainee Solicitor Ross Galbraith explains the key issues. 

After several months of negotiations the European Parliament, European Commission and Agricultural Ministers (from the Council of Ministers) finally reached a political agreement on the CAP reforms on 26th June. 

The Agricultural Committee Chair and the head of the Parliament's negotiating team, Paolo de Castro commented, "The political agreement we reached today is a victory both for EU farmers and consumers. This is the first time Parliament has been involved in the reform of EU farm policy as a full co-legislator and we proved that we are fully capable of doing the job. We managed to improve the proposals while defending Parliament's mandate"

Key elements of the Reforms

Young and small farmers - Farmers under the age of 41 years old will receive an additional 25% in top-up payments for their first 25 to 90 hectares. The main aim of this is to encourage generational renewal. In addition, small farmers may receive additional funds if Member States decide to set up a specific scheme for them.

Greening - If farmers are to receive their full single farm payment, they will be required to implement appropriate greening measures. The 3 basic greening measures include crop diversification, maintaining ecologically focussed areas and maintaining permanent grassland. In addition Parliament's negotiators won the right to ring-fence 30% of total rural development spending for environment-related measures.

Coupled Payments - Member States will have the choice to provide limited amount of coupled payments, i.e. payments that are linked to a specific product.

Other measures that have been agreed include stricter rules to make sure that only active farmers receive subsidies and also the reforms see an end to the sugar quota regime.

Outstanding Issues

Although, a political agreement has been reached between the 3 institutions on the majority of issues, there still remains a few outstanding issues. One important issue that remains to be decided  is the proposal to limit payments to large farms to €300,000 a year. This is a proposal Parliament want to be mandatory but Governments say it should remain optional. A decision will be made separately on this issue in due course.

Another outstanding issue (as previously highlighted) and an area of the reforms that may affect large areas of Cumbria, is 'areas facing natural constraint'. Member States may grant additional funds to these areas. Large parts of Cumbria are classed as such. This is an optional measure and England and Wales have not made a decision whether to implement the scheme.

Next steps

The agreement is still subject to formal approval by the Council and Parliament once the texts of the agreement have been formalised in all languages; this is likely to be in September, after the summer recess.

Expert View 

Head of Agriculture Richard Miller comments, "The reform of the CAP presents challenges to Cumbrian farmers who will need to ensure that they do not fall foul of their “greening” obligations. In addition, if stricter rules are to be applied so as to ensure only “active” farmers are supported then those who have retired in reality but continue “farming” on paper will need to ensure that they have the correct documentation in place in relation to grazing arrangements on their properties. For larger farms and estates, the pending decision on a cap will be big concern going forward. On the positive side, it will be of some relief to have the new agreement finalised and the gesture of encouraging young people involved with agricultural businesses will hopefully encourage the older generation to let the reins go a little earlier"

For further information contact Richard Miller or one of the agri-business team on agribusiness@burnetts.co.uk  or 01228 552222. 

About the author

Published: Monday 1st July 2013
Categorised: Agribusiness

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