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Brief opinion on the Commission Communication on the Common Agricultural Policy towards 2020

Scientific Advisory Board on Agricultural Policy at the Federal Ministry of Food, Agriculture and Consumer Protection (BMELV). Berlin, 20 January 2011.

Preliminary remarks

With its Communication of 18 November 2010 entitled "The CAP towards 2020: Meeting the food, natural resources and territorial challenges of the future", the European Commission presented first proposals on the shaping of the Common Agricultural Policy between 2014 and 2020. The Scientific Advisory Board on Agricultural Policy wishes to comment on this Communication as follows. The Advisory Board also refers to its opinion on "EU agricultural policy after 2013: Plea for a new policy for food, agriculture and rural areas" presented in May 2010. This opinion calls for a fundamental reform which would have to be gradually implemented and most closely corresponds to option 3 of the Commission Communication.

The Advisory Board welcomes the Commission's attempt to better align the agricultural policy with the future challenges faced by the agri-food sector and rural areas and asks policy-makers to be more courageous in initiating the necessary CAP reform. The Advisory Board largely supports the main objectives for the future agricultural policy cited by the Commission ("Viable food production", "Sustainable management of natural resources and climate action", "Balanced territorial development").

At the end of its Communication, the Commission briefly outlines three options which are, however, not presented on equal terms and with an open mind. In addition, the three options do not cover the entire scope of action possible. The preceding part of the Communication only prepares the ground for option 2 which focuses on three-stage direct payments composed of a basic rate serving as income support, a "greening" component and an additional payment in areas with specific natural constraints. As the Commission is obviously in favour of option 2, this brief opinion mainly refers to this option.

Assessment by the Advisory Board

An assessment of the Commission Communication is hampered by the fact that the Communication not only contains incompatibilities and inconsistencies (unclear formulation of objectives, challenges and means-end relations) but also remains very vague on many aspects that are of relevance to an assessment. The Communication therefore offers no stringent development of a concept for future agricultural policy. A comprehensible concept would require a clear formulation of the initial situation, a concise presentation of objectives, a discussion of possible instruments, an analysis of effects and the carrying out of an assessment.

In the following, the Advisory Board would like to comment on selected aspects of the Commission Communication.

The criticism voiced by the Advisory Board can be summarised as follows:

  • lacks a vision of a Common Agricultural Policy in the 21st century
  • contains expensive and sometimes counterproductive measures
  • leaves important fields of action without concrete measures

a) A lack of vision: The Communication shows no convincing vision for a Common Agricultural Policy that does justice to the objectives mentioned ("Viable food production", "Sustainable management of natural resources and climate action", "Balanced territorial development").

The challenges described by the Commission and the above-mentioned main objectives of the CAP are supported by many people. The Advisory Board is concerned about the Commission's strong focus on income and the relatively minor importance the Commission Communication attaches to improving the competitiveness of the agri-food sector. Income and distribution policy matters are, above all, the task of the Member States and not of the EU.

The Advisory Council generally urges greater attention to be paid to the subsidiarity principle. A vision of the CAP of the future must also be convincing with regard to the distribution of responsibilities between the EU and the Member States. An apodictic endorsement of the two-pillar structure is not sufficient in this respect. A concept for the CAP of the future must also demonstrate that the desired objectives can be achieved with the proposed instruments at the lowest, or at least reasonable, social costs.

The Communication's strong focus on the further development of the "direct payments" instrument does not go far enough. This is particularly true as it is not possible to show convincingly that direct payments can contribute significantly to achieving the proclaimed objectives. Direct payments make sense as a transitional measure, and this transition still remains to be organised. The Advisory Board is convinced that a direct-payment regime offering financial support for all agricultural areas in the EU-27 is not a suitable approach in respect of the long-term alignment of the EU's agricultural policy.

A convincing vision should also set out the level of importance attached to the international division of labour and the integration of European agriculture into world markets.

b) Expensive and sometimes counterproductive measures: The proposed details do not lead to an efficient achievement of the Commission’s stated objectives and are sometimes counterproductive.

The proposed "greening" of the first pillar does not make sense in the opinion of the Advisory Board. The examples for a "greening" component mentioned in the Communication are, in principle, suitable for contributing to the objective of more sustainable management. But if these measures are offered in a differentiated and region-specific manner (as is already partly the case), second-pillar environmental objectives could be achieved at lower costs.

The Communication does not address the issue that a "greening" of the first pillar would tend to have negative effects on the competitiveness of the agricultural sector.

The idea of a more equitable distribution of direct payments figures prominently in the Communication. Even if the EU were given distribution and income-policy duties, direct payments would have to be distributed according to income-policy criteria. The Commission's proposal contains two very specific instruments (an upper ceiling for direct payments received by large individual farms, and a support scheme for small farmers) but the effects of these instruments were not systematically analysed with regard to their intra- and intersectoral impact.

The mixing of the first and second pillar (greening, support for less-favoured areas, risk management) leads to more bureaucracy for farmers and administrations and conflicts with the goal of simplifying the Common Agricultural Policy.

Maintaining the ability to couple direct payments with production conflicts with the spirit of the Luxembourg decisions and is viewed critically by the Advisory Board.

On the other hand, the Advisory Board welcomes the Commission's proposal to focus more strongly on the promotion of innovations in businesses.

c) Important fields of action without concrete measures

Although the Communication cites major future challenges, it is very selective with regard to the measures it presents. The area of animal production (environmental aspects, animal health and animal welfare), for example, is largely disregarded in spite of the fact that the discrepancy between the actual production methods and the social demands made of these methods appears particularly large in this area.

A balanced territorial development is mentioned as one of the three main objectives of the CAP. However, the brief explanatory comments on rural development within the scope of the three options lack a stronger focus on non-agricultural measures and problem regions.

Other policy fields such as bioenergy and climate policy have become increasingly important to the agricultural sector over the last decade. The relationship between the CAP and these policy fields is not sufficiently reflected in the Communication.

Conclusions

The Advisory Board calls for a courageous reform of the agricultural policy to be undertaken, which should focus on long-term objectives and no longer regard agricultural policy as a protection and distribution policy for the domestic agricultural sector. It is concerned about the fact that the Commission Communication lacks a stringent and convincing concept for the CAP of the future and, instead, focuses on modifications of the direct payment regime. The Advisory Board sees the danger that the social legitimation of such an agricultural policy will continue to dwindle and that, as a result, the availability of the funds necessary to tackle the agricultural sector's actual problems will be called into question.

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