News

On 29/03/2021, the European Commission published a final sustainability impact assessment to support the negotiation of an EU-Mercosur trade agreement. According to the evaluation, the agreement between the EU and Mercosur will have a positive impact on the economies of both blocs and could contribute to the recovery from the economic crisis caused by the current pandemic. According to the evaluation, appropriate law enforcement policy instruments and market initiatives could prevent any significant impact of the trade agreement on deforestation in Mercosur. Similar policies and initiatives implemented in Brazil between 2004 and 2012 have led to a decline in deforestation while agricultural production has strengthened. Since 2014, deforestation rates, particularly in Brazil, have started to rise again due to worse economic conditions and weakened environmental law enforcement efforts. The European Commission has therefore made it clear that it needs meaningful results and the commitment of Mercosur before it can propose an agreement to the Council and Parliament for signature and conclusion. Addressing sustainability issues, including deforestation, will require clear, firm commitments and measurable sustainability goals.
More information is available here.

The European Parliament, the Commission and the Council met on 26/03/2021 for a full-day so-called super trilogue on all three parts of the CAP package - Strategic Plans, Horizontal Issues, and the Common Market Organization. The institutions have made the most progress on Horizontal Issues. According to the Interim Agreement (in the European negotiations, the rule is that “nothing is agreed until everything is agreed”) the European institutions, after a long debate, supported the voluntary use of ARACHNE, which should be used to collect data on CAP beneficiaries. The possibility of correcting errors by beneficiaries to reduce the number of fines paid should also be ensured, and the Commission should be responsible for proper control of the use of CAP funds. As part of the section on CAP Strategic Plans, the institutions originally wanted to agree on definitions of active / real farmer, small farmer, young farmer, and new farmer; however, no agreement has yet been reached on any of the definitions. However, according to information from some European media, support was expressed for a rather mandatory definition of a real farmer. The institutions reached a shift and an interim agreement for Annex I of the CAP Strategic Plans, i.e., for impact, result, and output indicators. The new implementation mechanism should be reviewed every two years (2024 and 2026), with an additional performance evaluation in 2025, but no sanctions should be imposed for non-compliance this year. The rate of deviation in meeting the indicators should reach 35% in 2024 and should fall to 25% by 2026. The rules on controls and sanctions for compliance with cross compliance should be introduced at EU level and should therefore be the same for all Member States. According to European media, during the trialogue, the Council proposed to introduce, on a mandatory basis, at least one of the tools for better redistribution of direct payments, i.e., capping, redistributive payments or degressivity, the choice should be left to the Member States. The Council also supported the achievement of an internal convergence of direct payments of 85% by 2026 (Parliament called for 100%). However, no agreement was reached on these issues, and negotiations will continue in the coming weeks. On the topics of capping, redistribution and degressivity, an agreement is expected to be reached at the very end of the negotiations. Neither the green architecture of the CAP nor social conditionality was placed on the agenda of 26/03/2021. Norbert Lins (EPP, DE), Chair of the EP Committee on Agriculture and Rural Development, said that the super trilogue negotiations had helped move the negotiations forward, but called on the EU Council for more flexibility in the forthcoming rounds of negotiations.

The Council of Agriculture Ministers met on 22-23/03/2021, as part of Tuesday's program, ministers were preparing for a meeting of the super trilogue. During the negotiations, Portugal confirmed its interest in trying to reach a final agreement on the CAP package by the end of May 2021. As part of the preparatory debate, agriculture ministers also discussed the setting up of direct payments under the CAP Strategic Plans. Portugal therefore presented a compromise proposal to ministers, which included voluntary capping of direct payments, voluntary degressivity, voluntary redistributive payment, but a mandatory definition of active farmer (the Council in its original opinion of October 2020 supported a voluntary definition of active farmer). However, the Portuguese Presidency emphasized that any mandatory definition would have to be flexible enough for Member States to work with it further. Aid to young farmers was also discussed, and the Council supported an increase in support from the envelope for direct payments from 2% to 3% (but LV, HU, CY supported maintaining 2%). The draft compromise during the negotiations 23/03/2021 was supported by FR, BG, ES, and SI, but the French Minister of Agriculture Julien Denormandie emphasized that one of the tools for better targeting direct payments, i.e., either capping or redistributive payments, should be made mandatory. States should be able to choose which of the two instruments to implement. The Council also presented the opinion of fourteen Member States (AT, CY, CZ, DK, FI, FR, EL, HU, IE, IT, LU, PL, RO, ES) calling for simplification of the CAP, one of the key aspects of the opinion being support for the possibility for beneficiaries to correct errors to reduce the number of fines paid. As part of the discussion on Horizontal Issues, the setting of controls was also discussed. In the long run, the European institutions cannot agree on whether the control system should be set up on The Portuguese Presidency proposed the possibility of a hybrid model, a model that would use both some cross-compliance rules and a performance model. However, the hybrid was rejected by the representatives of CZ, HU, DK, SE, RO, HR, AT, LU, EL, LV, SI, EE, FI, and IE, the model would not bring the required simplification and therefore, according to the representatives, should not be supported. Representatives of the Member States also discussed the ARACHNE instrument in the framework of Horizontal Issues, which should be used to collect data on CAP beneficiaries. According to representatives from LU, CY and DK, this tool should only be implemented on a voluntary basis. As a result, the Council supported volunteering for ARACHNE, and the Council also supported the introduction of a transitional period. In the next two months, the Council could meet at the same time as the CAP trialogue to adapt the Council's mandate more flexibly to the changing views of the other institutions.
More information is available here and here.

The Commissioner for Agriculture and Rural Development, Janusz Wojciechowski, is currently focusing on the issue of defining a real / active farmer on his Twitter account. The Commissioner supports the introduction of a mandatory definition. In the first half of March, the Commissioner proposed four own definition criteria - a real / active farmer, according to the Commissioner, should remain permanently on his farm, keep livestock at least to a minimum, make a profit from agriculture of at least 25% of his total income, and he should farm on the land he acquired from his ancestors. According to the Commissioner, meeting one of these criteria should be sufficient to meet the definition of a real farmer. At the end of March, however, he adjusted his own, unofficial, criteria and extended them to a total of 5 criteria - according to the Commissioner, a real / active farmer should live permanently on his farm, be involved in work and farm management (new), should to keep livestock at least to a minimum, a significant proportion of its profits (this time without a specific percentage) should come from its agricultural activity, and should farm the land it has acquired from its ancestors. According to the Commissioner, to meet the definition of a real farmer, it should be enough to meet two, not one, of the criteria. The Commissioner also said in other contributions that the Commission would seek to set the mandatory definition of a real / active farmer correctly, addressing several issues - checking the actual activities of agricultural landowners, comparing agricultural and non-agricultural incomes, checking actual work and personal involvement of beneficiaries in work on the farm. This control may involve additional risks of increased administrative burdens, considering the great diversity of European agriculture in terms of size, type, and farm layout.
More information is available here, here, and here.

Around 30 representatives of environmental organizations protested in front of the European Commission and EU Council buildings on 26/03/2021 against the current form of CAP reform proposals, calling on representatives of the European institutions who were discussing the CAP in a so-called super trilogue withdrawal the whole proposal. According to environmental organizations, the current form of CAP proposals is not in line with the requirements of the European Green Deal, so in addition to the protest, the organizations also organized a petition to withdraw the entire proposal, which has already been signed by over 157,000 European citizens. During their speeches, the organizations also pointed out that 80% of direct payments from the CAP in the EU go to only 20% of the largest beneficiaries; also criticized support for intensive agricultural production models.
More information is available here.