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On 27/05/2020, the European Commission published the European Union's economic recovery plan. The new package called "Next Generation EU" amounts to € 750 billion (here). Part of the EU's Next Generation Fund (NGEU) will be provided in the form of loans (€ 250 billion). The loans should be repaid by 2058 at the latest. The Commission also presented a new proposal for a Multiannual Financial Framework of € 1.1 trillion (here and here). The budget for cohesion policy, defence, administration, and research has been reduced, while for agricultural policy has been strengthened. According to the new MFF, cohesion policy should have a budget of €323 billion (compared to the € 330 billion as proposed in 2018). However, € 50 billion from the NGEU package should be earmarked for cohesion for coronavirus recovery. Under the new MFF, € 81 billion (initially € 86 billion) should be earmarked for Horizon Europe, but it should receive an additional € 13.5 billion from the NGEU. The CAP budget under the new MFF should be increased to € 333 billion (compared to € 324 billion as proposed in 2018), and a further € 15 billion should be allocated from the NGEU to strengthen the second pillar of the CAP (allocations for Member States will be calculated according to the same key as in the 2018 proposal). Of the nine additional billions under the new MFF, less than 5 billion should be earmarked for strengthening the budget for the second pillar of the CAP - rural development programs. The common agricultural policy could thus operate with a budget of € 24 billion higher than proposed by the Commission in 2018. About € 20 billion of this amount would go to support the second pillar of the CAP. In comparison with the current situation, however, will be the second pillar € 7 billion lower. The budget for the first pillar - direct payments, will be increased by only € 4 billion. The total CAP budget should therefore amount to € 348 billion. According to European media, even after the new reinforcement proposals, the total CAP budget is € 34 billion lower than the current CAP budget (calculated at 2018 prices and after deducting UK aid). In this context, the media point to the European Commission's analysis that agri-food companies should lose up to € 37 billion because of the coronavirus crisis (here). Further details of the distribution of financial support under the CAP have not yet been published, so the allocations for individual Member States and the proposed amount of the future agricultural crisis reserve are not known. The Commission is also proposing to strengthen the Fair Transition Fund, for which € 10 billion was originally earmarked, with an allocation of € 40 billion now proposed under the NGEU. The Fair Transition Fund is intended to help Member States move more quickly to a climate-neutral economy. The Commission continues to envisage the introduction of own resources, such as the possibility of taxing non-recyclable plastics, the so-called plastics tax.

On 26/05/2020, the European Parliament's Committee on Agriculture and Rural Development discussed with the Director-General of the Commission for Agriculture and Rural Development (DG AGRI) Wolfgang Burtscher on the CAP and its potential to meet the objectives of the Europe Green Deal (document available here). In order to meet the objectives of the Europe Green Deal, according to DG AGRI, some aspects of the Commission's 2018 CAP proposal need to be maintained - at least 30% of the second pillars should be allocated to Agri-environment-climate Measures (AECM) (excluding ANCs areas), eco-schemes in the first pillar should be maintained, output and result indicators should be maintained, and enhanced conditionality should be maintained. The Commission does not envisage proposing amendments to the original 2018 proposal but is ready to support concrete changes - the Commission will support the allocation of a minimum budget for eco-schemes as well as a stronger emphasis on animal welfare and antimicrobial resistance. The Commission will emphasize the inclusion of Farm to Fork and Biodiversity objectives in the national CAP Strategic Plans but will consider the different starting positions of the Member States. Following the objectives of Farm to Fork Strategy, the Commission plans to present or revise several legislative proposals, but according to Wolfgangem Burtscher, an impact assessment should be carried out.
More information is available here.

On 29/05/2020, the European Commission launched another public consultation on the objectives of the European Green Deal and the Farm to Fork Strategy. A new public consultation on the sustainable use of pesticides has been launched, with the aim of revising current legislation and subsequently adapting it to comply with the Farm to Fork Strategy and the Green Deal. The public consultation will run until 07/08/2020 (here). The Commission is also preparing a draft legal act on the EU’s emissions trading system (EU ETS) for 2021-2030, and a public consultation has been launched on this initiative, lasting until 24/07/2020 (here and here). The Commission is also preparing an update of the concentration limits for persistent organic pollutants in waste, the consultation lasts until 07/08/2020 (here). There are still running public consultations on the revision of animal welfare legislation to strengthen the rules to be in line with Farm to Fork Strategy, the consultation is open until 29/07/2020 (here); evaluation of the animal welfare strategy for 2012-2015 with the possibility to participate until 15/06/2020 (here); evaluation of agricultural promotion programs to strengthen the emphasis on sustainable production, deadline for participation until 11/09/2020 (here); on the 2030 climate target - Commission proposes 50-55% reduction in greenhouse gas emissions (already pressure to boost ambitions and up to 80% reduction by 2030 as part of contributions), consultation open until 23/06/2020 (here); to adapt to climate change in order to promote an economically favourable economy, consultations will run until 30/06/2020 (here); and the European Climate Pact with the possibility to join 17/06/2020 (here).

On 27/05/2020, the European Commission published a document summarizing the economic impacts of Covid-19 on individual EU sectors. According to the document, the most affected sectors will be the tourism sector with an estimated loss of € 171-285 billion and the construction sector with an estimated loss of € 113-188 billion. According to the Commission document, the agri-food sector should suffer losses of € 22 to 37 billion. The Commission calculated losses in two different scenarios - for a total decline of € 720 billion and € 1.2 trillion, depending on the severity and duration of the crisis. As part of the Next Generation recovery package, the EU Commission for Agricultural Policy has proposed to provide support (from borrowed funds) of € 15 billion for the second pillar, also in the updated proposal of the Multiannual Financial Framework, proposed to strengthen the CAP budget by 9 billion compared to the 2018 proposal. According to European media, the CAP budget would remain more than € 30 billion below the current budget. According to Irish representatives, the estimated financial loss of farmers in Ireland, for example, could reach up to € 1.6 billion. Revenues from the sale of Irish beef are estimated to fall by as much as 78% in 2020, while revenues from other vulnerable sectors will fall by as much as 50-60%.
More information is available here and here.

Norbert Lins (EPP, DE), Chair of the European Parliament's Committee on Agriculture and Rural Development, sent a written request on behalf of the Committee to Agriculture Commissioner Janusz Wojciechowski to ensure that market measures were put in place to help the cheese, wine, beef, fruit and vegetables sectors due to coronavirus. However, the Commissioner refused to introduce further market measures. According to the Commissioner, increased private storage of cheese would lead to further support for production, but the lack of financial resources is also a problem. On the EP's proposal to relax the rules for agricultural promotion programs to help the wine sector, the Commissioner emphasized that the Commission would not approach the promotion of alcoholic beverages in the EU internal market, especially for health reasons.