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Last week, the European Parliament voted on the opinion on the CAP 2020+. In its opinion, Parliament supported, inter alia, the following elements of the new CAP:

Non-productive elements: Biodiversity loss in the EU needs to be reflected in cross-compliance and eco-schemes; in order to halt biodiversity loss, Member States should ensure in their CAP Strategic Plans that at least 10% of the area is set aside for biodiversity-friendly landscape features.

Good agricultural and environmental condition: Farmers engaged in organic farming are considered to comply with the rules of GAEC 8; for farmers participating in eco-schemes that comply with rules of GAEC 1, 8, 9, and 10, these farmers are also considered to comply with these GAEC.

Advisory services: Member States should set aside at least 30% of resources for advisory services on climate change mitigation advice, adaptation, sustainable energy, efficient management of natural resources, efficient management of biodiversity, and protection of biodiversity for strengthening ecosystem services. According to the compromise proposal, the advisory system was also to cover the technique of optimizing the economic results of production systems, improving competitiveness and market orientation.

Eco-schemes: Parliament has supported the extension of eco-schemes to include animal welfare rules. Parliament states that Member States will offer a wide range of eco-schemes to ensure the participation of farmers and to reward different levels of ambition. Member States will develop different schemes to provide co-benefits, promote synergies and emphasize an integrated approach. Member States shall establish scoring or evaluation systems to promote coherence and effective remuneration. Support for eco-schemes should take the form of an annual payment per eligible hectare or an agricultural holding and will be provided as an incentive payment in addition to compensation for additional costs incurred and income foregone, which may take the form of a lump sum. Agricultural practices must cover at least two of the areas on offer, such as climate change activities, including reducing greenhouse gas emissions from agriculture and maintaining or enhancing carbon sequestration; protecting and improving water quality in agricultural areas and reducing pressure on water resources; activities to reduce soil erosion; protection of biological diversity, conservation or restoration of habitats and species, protection of pollinators and care of landscape features; sustainable and less use of pesticides; allocation of areas for non-productive elements or areas free of pesticides and fertilizers; or strengthening animal welfare and tackling antimicrobial resistance. Member States, in cooperation with national, regional, and local stakeholders, shall establish national lists of procedures eligible for eco-schemes.

Financial allocation for the next CAP: 35% of the budget for the second pillar should be allocated to agri-environmental measures, with 40% of ANC payments being eligible. At least 60% of the first pillar budget may be allocated by Member States together to basic income support for sustainability, to VCS payments, to redistributive payments, and to certain sectoral measures. At least 6% of the budget for the first pillar should be allocated to redistributive payments. 30% of the budget for the first pillar should be allocated for eco-schemes, and up to 10 + 2% for VCS payments.

Monitoring climate developments: The Commission should develop a science-based and internationally recognized common methodology for more accurate monitoring of spending on climate and environmental objectives, including biodiversity, and evaluate the estimated benefits of different types of interventions. As part of the compromise, the original wording was removed, stating the allocation of expenditure targets differentiated according to whether the support contributes significantly or slightly to meeting the climate change objectives. Prior to the deletion, the weights were set as follows: 40% for expenditure on basic income support for sustainability and supplementary income support; 100% in the case of expenditure on eco-schemes; 100% in the case of ANC expenditure; 40% in the case of expenditure related to natural or other area-specific restrictions under Article 66 (ANC).

Transfers between pillars: Parliament proposes to allow transfers from the first to the second pillar up to 12%, and up to 5% from the second to the first pillar. Member States whose payments per hectare are below the EU average may move up to 12% from the second to the first pillar. Member States should communicate their decisions to the Commission by 31 December 2021.

Review of CAP Strategic Plans: Member States should review their strategic plans by 31/12/2025 to ensure that they comply with applicable Union climate and environmental legislation and submit requests to the Commission to amend their strategic plans accordingly.

Mid-term review:The Commission will review the CAP by 30/06/2025 and submit a report to the European Parliament and the Council to evaluate the functioning of the new implementation model by Member States, adjusting the coefficients for climate monitoring according to the new methodology.

Investments: In order for investment operations to be eligible for support from the EAFRD, according to the current EP opinion, they must be preceded by an expected environmental impact assessment in accordance with the law applicable to this type of investment, if the investment is likely to have negative environmental effects. Member States shall allocate at least 30% of the investment aid to investments for environmental and climate related purposes. Ineligible investments should now include the purchase of animals other than animals used instead of machinery to protect the landscape or to protect herds from predators; the purchase of annual plants and their planting for purposes other than the restoration of agricultural or forestry potential following natural disasters and catastrophic events; or investments in bioenergy production that do not comply with the sustainability criteria set out in the Renewable Energy Directive. The maximum level of support can be increased for investments in afforestation, introduction of agroforestry systems, protection of herds against predator attacks, or animal welfare investments.

Annexes - GAEC: within GAEC 4, Parliament proposed a condition for the establishment of buffer strips along watercourses with a minimum width of 3 m, where pesticides and fertilizers cannot be used; under GAEC 8, arable crop rotation, including legumes, other than crops grown in water; within GAEC 9, a minimum share of 5% of non-productive elements and areas on arable land where pesticides and fertilizers are not used; within GAEC 10, a ban on the conversion or plowing of permanent grassland in Natura 2000 sites.

The opinion on the Strategic Plans for the CAP was adopted in the final vote of the EP plenary on 23/10/2020 by 425 votes to 212, with the EP now having a mandate to negotiate the CAP in trialogues. The trialogues will start in the week after 09/11/2020.
More information is available here.

The European Parliament has adopted an opinion on Horizontal issues. Among the proposals adopted were proposals numbered 215 and 216, which provide for the collection of information by Member States on ownership structures and conflicts of interest (according to this proposal, beneficiaries should indicate the identity of their parent undertaking or undertakings if necessary); and enhancing transparency in the distribution of agricultural land in order to facilitate the monitoring of land take and concentration by public authorities and to ensure greater accountability and transparency with regard to EAFRD and EAGF support. Article 226 was also approved, which states that if shortcomings in a Member State are identified in the examination and handling of complaints, the Commission will set up a complaints mechanism whereby beneficiaries of unfair treatment can lodge a complaint directly with the Commission. The opinion on Horizontal issues was adopted in the final vote of the EP plenary on 23/10/2020 by 434 votes to 185, with the EP now having a mandate to negotiate the CAP in trialogues. The trialogues will start in the week after 09/11/2020.
More information is available here.

The European Parliament voted in plenary on 23/10/2020 on the EP opinion on the Common Market Organization (CMO), one part of the CAP reform package. In the vote on the CMO, MEPs rejected all amendments governing the labelling of plant-based alternatives to meat and meat products with the same names traditionally used for meat and meat products (steak, burger, sausage, etc.). This means that the EP in its opinion proposes that the labelling of plant-based alternatives to meat and meat products should not be addressed in the CMO Regulation, i.e. at EU level. However, in the case of milk and milk products, Parliament took a different view: according to the EP, plant-based alternatives to milk and milk products should not bear the same label as milk and milk products (yoghurt, cheese, milk), and the labelling of these products should be addressed CMO Regulation at EU level. The opinion on the CMO was adopted in the final vote of the EP plenary on 23/10/2020 by 463 votes to 133, with the EP now having a mandate to negotiate the CAP in trialogues. The trialogues will start in the week after 09/11/2020.
More information is available here and here.

In a midnight statement to the Council on 20/10/2020, Commissioner for Agriculture and Rural Development Janusz Wojciechowski welcomed the outcome of the vote in the European Parliament, specifically supporting the allocation of 30% of the first pillar for eco-schemes. This opinion is more ambitious than the one discussed by the Council, so he called for reflection on Parliament's position in the Council's position as well. A general agreement on the CAP was reached in the Council on 21/10/2020 at 4 am after 45 hours of negotiations, the agreement was adopted by a qualified majority (Lithuania opposed it due to disagreement with the 20% allocation for eco-schemes, considering this share too high). Latvia, Romania, and Bulgaria were abstained). By approving the agreement, the Council also approved a mandate to negotiate the CAP in trialogue with the other European institutions. The Council has not changed its position on the genuine farmer, the implementation of this definition should continue to be based on the principle of voluntariness. Nor has it changed the position on coupled support, so the official position of the Council is 13 + 2% for VCS. Changes have taken place on the issue of capping direct payments - The Council continues to support voluntary capping only for basic income support for sustainability, with the voluntary possibility for Member States to reduce direct payments from €60,000 through degressivity. The possibility of voluntary deduction of labour costs was also retained. However, a new paragraph has been added stating that where farmers are part of a group of joint legal entities, as to be determined by the Member States, Member States may apply the capping referred to in paragraphs 1 (€100,000) or 1a (degressivity from €60,000) to at the level of this group under conditions to be determined by the Member States. As regard to the eco-schemes, the Council supported its previous position - it should be a mandatory instrument, with an allocation of 20% of the budget for the first pillar. According to the Council's opinion, a two-year transitional period, the so-called pilot phase, should be introduced for eco-schemes, which would allow the transfer of unused funds towards other specific environmental and climate objectives. Eco-schemes could include precision agriculture, agroforestry, and organic farming. However, Member States should also be able to propose their own measures to reflect the specific situations in the Member States. Within the second pillar, 30% of the budget should be allocated to agri-environmental measures. Within GAEC 9 (non-production elements), a limit of 10 hectares of arable land was set, the limit of up to 10 hectares is also valid for GAEC 8. Ministers also agreed to extend the scheme for authorization of vine planting, until 31/12/2040.

The Agriculture Ministers and their representatives adopted the Council's opinion on the Farm to Fork Strategy unanimously on 19/10/2020. Representatives of the Member States called for the achievements of the national targets to reflect the achievements already made in the Member States. They also emphasized the need to ensure a fair income for primary producers, setting Farm to Fork objectives based on specific situations in the Member States, reflecting different starting positions. At the same time, they emphasized the establishment of objectives on a scientific basis, and above all the assessment of the impacts of the entire Strategy. Member States' representatives further supported the submission of legislative proposals on sustainable food systems by the end of 2023 at the latest. They called for food safety, food security, and consumer health to be ensured and strengthened. The role of farmers, their cooperatives and producer organizations in the food supply chain should be strengthened. In the text of the Farm to Fork Strategy, the European Commission has set a target of reducing the use of pesticides and reducing the risks associated with their use by 50%, fertilizers by 20%, and veterinary antibiotics by 50%. According to agriculture ministers, these objectives need to be based on science-based integrated pest management measures, and support for the use of sustainable alternatives should be strengthened. The Commission has also proposed extending the area of organic farming to 25% of agricultural land by 2030. According to Member States' representatives, the Commission should examine whether other farming practices are not helping the environment and climate to the same extent as organic farming. According to the new Council opinion, harmonized rules should be laid down for food contact materials. For nutrition labelling for foods, the Commission should first carry out an impact assessment, which will assess the benefits of labelling for consumers and producers, as well as the impact of labelling on the EU single market. Commissioner for Health and Food Safety Stella Kyriakides has promised Member States that the different starting positions of Member States will be reflected in setting targets and that all Commission legislative proposals related to Farm to Fork targets will be accompanied by impact assessments.

During their speeches, Ministers and their representatives supported:

Reflections on different starting positions of Member States: SK, IE, SI, MT, HU, LT
The strategy must not create barriers to international trade: SE, FR, BE, HU
Supporting the reflection of national food labelling systems: DK
Country of origin labelling of foodstuffs must not create barriers in the single market: DK
Rejection of simplified nutrition labelling schemes for food: IT
Promoting a fair income for farmers: ES, PT
Support for maintaining EU competitiveness: RO, CZ, PL, BG
Support for the revision of animal welfare legislation: LU
Support for the implementation of impact assessments: LU, CZ, AT, BG, HU, SE, IE, ES, RO
Warning against the threat of a drop in production and rising food prices: CZ
Support for short supply chains: HR
The Czech Republic and Hungary have also submitted a Farm to Fork declaration, in which they describe the objectives of the Strategy as ambitious, emphasizing the parties' concerns about the negative impact of the strategy on competitiveness and production in the EU. The declarations call for impact assessments to be carried out and for a reflection on the different starting positions of the Member States.
More information is available here.