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Opinion

The CAP after 2020: small debate, big implications

Renaud Thillaye / Jan 2018

Phil Hogan, the European Commissioner for Agriculture and Rural Development. Photo: European Union.

 

Don’t hold your breath thinking that Brexit, technology, climate change and new EU budget priorities lay the ground for a radical shake-up of the Common Agricultural Policy (CAP). The EU’s flagship policy has been reformed by stealth over the last thirty years, and there is no reason why this time should be different. Yet, rarely have the stars been more aligned for a substantial overhaul. In his Sorbonne speech in September, last year Emmanuel Macron suggested that there should be “no taboo” on the future of the CAP, a first for a French president. The communication recently published by the Commission lays the ground for an interesting year of negotiation.

More fundamentally, the debate on the post-2020 CAP raises three major questions of EU policy-making. Anyone interested in the travel of direction of the EU in the next few years should watch carefully.

Sharing a shrinking pie

The post-2020 CAP debate is first and foremost an EU budgetary question. Like in previous cases, the Commission will only publish its detailed proposal after the one on the 2021-2026 Multi-Annual Financial Framework, which is expected in the spring. But one thing is certain: the loss of the UK’s net financial contribution means that the CAP pie will shrink by approximatively €3 billion. The EU Commissioner Phil Hogan has been vocal in defending the existing volume of direct payments. Given Eastern and Central European member states’ demand to continue with the convergence in direct payments levels with Western countries, this position leads logically to either raise contributions from member states, or reduce the so-called ‘pillar 2’ subsidies for rural development.

Flexibility for national co-financing offers a possible way out. The Commission’s communication falls short of proposing this, but its idea of national ‘strategic plans’ which would make member states more responsible for implementation of pillar 1 could be accompanied with more control on spending. This would ensure that the overall volume of CAP spending stays the same in a context when EU spending is easier to justify on items such as research and innovation, border management and security.

Cutting red tape, raising green ambitions

Second, the next CAP debate also raises important EU governance questions. The Commission’s communication suggests that the top-down model that has been used to implement ‘greening’ is flawed. The policy, introduced in 2014, has consisted in making 30% of direct payments conditional on the implementation of specific environmental measures. It has received twin criticism from both farmers and environmental lobbies. For the former, greening has only added to the existing regulatory burden, an argument vindicated by the REFIT Platform. For the latter, it has simply not been transformative. In early December the Court of Auditors released a timely verdict, showing that greening has so far changed farming practice “on only around 5 % of all EU farmland”.

Finding the right equilibrium between policy ambition and bureaucratic control is not a CAP-only problem. In EU cohesion or research spending programmes, too prescriptive, rule-based approaches have also had high procedural costs, tweaked incentives, and ignored the diversity of practices. The Commission’s intention to turn greening upside down should therefore be welcome.

The idea of setting ambitious targets related to “soil, water, biodiversity, air quality, climate action” whilst letting member states decide on the best way to achieve them locally is laudable. It would take the CAP closer to the EU’s climate-energy policy, which has been deemed a relative success. The difficulty will lie in setting up a performance-oriented system based on unquestioned indicators and lean control mechanisms. If member states set up new ‘usines à gaz’ to micro-manage what farmers do, the reform will not achieve less bureaucracy. This is where a third dimension comes into play.  

Data analytics, satellite technology and privacy

Commissioner Hogan is convinced there is a silver lining: satellite-driven technology that will increasingly replace ‘on-the-spot’ checks. The European Spatial Agency’s project Sen4CAP is expected to improve, in the near future, the Integrated Administration and Control System (IACS, the CAP’s complex monitoring system) and the decisions over compliance made by national paying agencies. Using data is not just a means to stricter controls. Farmers are, in theory, the first beneficiaries of data-based ‘precision farming’. If the technology is effectively rolled out, higher productivity and a more adequate use of crop protection products can be expected.

In other words, like other policy areas, agriculture is set to benefit from the data revolution, and policy-makers will be able to monitor performance more easily. However, before we get there, a number of questions will have to be answered. What privacy guarantees can be offered to farmers? Is it acceptable for private companies and public authorities to know so much about individual farms’ business model and performance? There is no reason why the principles laid out in the General Data Protection Regulation (GDPR) should not apply to farming. But important efforts are required to establish trust with farmers if technology is to help achieve the triple objective of higher productivity, environmental performance and lighter bureaucratic controls.

Getting it right

Deciding on the CAP’s future is therefore more than just tweaking on the margins of a outdated policy. On budgetary, governance, and technological questions, the EU has the opportunity to demonstrate its flexibility and its ability to project itself in the future. Despite their differences of appreciation, all member states adhere to a sustainable and quality-oriented farming model, guaranteeing both a fair price to farmers and consumers. But policy innovation and creativity is urgently needed.  

Renaud Thillaye

Renaud Thillaye

January 2018

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