News

The Prime Ministers of 7 EU Member States (DE, CZ, PT, ES, LV, SE & NL), in a letter dated 20/06/2019, invited the President of the European Commission, Jean-Claude Juncker, to present a balanced offer for a possible agreement to the Mercosur countries. They joined the call of agriculture ministers from PL, IE, FR and BE, who expressed their dissatisfaction with the ongoing negotiations on the agreement last week. The EU has offered Mercosur quotas for products such as beef, poultry, sugar, ethanol, rice, eggs and egg products, garlic, pork and sheep meat, provided that Mercosur offers a satisfactory offer for European dairy products, wines and spirits. The EU-Mercosur Trade Agreement was agreed on 28/06/2019, according to initial information by Commissioner for Agriculture and Rural Development Phil Hogan, the EU and Mercosur agreed on quotas (for Mercosur) for beef (99.000 tonnes), sugar (180.000 tonnes) , and poultry meat (180,000 tons). Further details of the agreement are not yet known.
More information is available here.

On 18/0/2019, the European Commission approved, within the 37th wave of intervention sales, an offer to sell 162 tonnes of skimmed-milk powder (SMP) from intervention stocks at a minimum price of EUR 175.90/100 kg, an offer has come from Slovakia only. Since 13/12/2016, the Commission has approved the sale of a total of 394,625 tonnes of SMP, finally sold 379,674 tonnes of SMP. The stocks of SMP in intervention warehouses have thus been exhausted, the warehouses are now empty.
More information is available here.

EU Ministers of Agriculture met on 18/06/2019 at the Council of Ministers, the last one under the Romanian Presidency. Ministers were dealing with the issue of CAP reform post 2020 - the Romanian Presidency presented the Council's Progress Report on that matter (here). Furthermore, ministers discussed the results of the conference on eco-schemes, which took place in Spain on 29-31/05/2019 (here), biosafety issues, and the issue of maximum residue limits for some pesticides.

The Progress Report summarizes the Council's activities over the past six months. Further discussion will be needed regarding definitions, including the definition of a real farmer, young farmer or the definition of eligible hectares, as well as the Council's approach to compulsory capping. For the time being, the Council has agreed on some technical adjustments to sectoral measures (for example, to extend the list of other industries); to reintegrate payments for areas with natural or other constraints (ANCs) into AEKO measures (as opposed to the Commission's proposal to exclude ANC payments from envelopes for AEKO measures) or to strengthen Member States' flexibility in using risk management tools. However, a number of ministers pointed out that nothing is agreed on until the Council's final position is adopted.

The ministerial debate further showed:

The basic principles of cross-compliance in the area of new green architecture are necessary to be further addressed, and some mandatory requirements may eventually be abandoned (especially in the case of small farmers) - IE, PT, BG, HU;
Support for mandatory introduction of eco-schemes in all Member States - IE, DE, PT, FR, HU;
Promoting voluntary introduction of eco-schemes (or flexibility) - IT, SI, CY, DK;
Before moving on with the CAP, it is necessary to wait for the results of the negotiations on the Multiannual Financial Framework - EN, ES, CZ, LT, EE, PL, FR, FI, HR, LU, BE;
Refusal to cut budgets, especially for the second pillar - SK, CZ, PT, SI, EE, HR, BE, FR, IE, LT, LV;
Supporting voluntariness for capping or real farmers - DE, CZ, EE, SK;
Supporting promotion of VCS payments - SK, CZ, SI, BG, HU, SE;
Supporting termination of VCS payments or at least reduction of the envelope - DE, DK;
Promoting the empowerment of women in agriculture - ES, SE;
Support for achieving external convergence to the average of direct payments in the EU - CZ, LT, EE, HR, LV;
Inevitability of introducing a transitional period - FR, CZ, SK.

Agriculture and Rural Development Commissioner Phil Hogan consequently rejected the introduction of eco-schemes on a voluntary basis for Member States.

The Presidency of the EU Council will now be taken over by Finland (from 01/07/2019). The negotiations on the CAP will continue, issues that are still open are compulsory capping of direct payments, coupled payments support, external convergence, and the set-up of a new implementation mechanism or the rules of the new green CAP architecture. Finland will chair the Council until the end of 2019, after which Croatia will take over the Presidency.

The EP's Committee on Agriculture and Rural Development adopted its opinion on the CAP strategic plans on 02/04/2019, supporting the mandatory introduction of a definition of a real farmer; mandatory capping over EUR 100,000 with the possibility of deducting 50% of staff costs; if the allocation for redistributive payments is strengthened to at least 10% of the envelope for the I. pillar, then the possibility for Member States not to introduce capping at all; as for VCS payments, the Committee supported a maximum allocation of 10 + 2% (on a voluntary basis) and 20% on eco-schemes for the first pillar envelope (compulsory). However, during the April vote, a number of MEPs supported alternative proposals that were not approved, but their supporters were re-elected to the European Parliament during May elections - for example, the introduction of mandatory capping of over EUR 60,000 with a maximum deduction of 50% of staff cost (in the first option), or no staff cost deduction (in the second option), redistributive payments should be mandatory under these proposals, Member States should not be allowed to choose between enhanced redistributive payment allocation and capping.

The composition of the European Parliament has changed after the May elections, pro-environment-minded parties have strengthened. According to information from European agricultural NGOs, the Greens are seeking to win the post of a chairman or vice-chairmen of the EP Committee on Agriculture and Rural Development, with the Greens being one of the main supporters of mandatory capping over EUR 60,000 in the past. Similarly, the shadow rapporteur for the April report, Maria Noichl (S&D, DE), stated that in April, the majority of S&D representatives in the Committee voted against the report finally adopted and then she stressed that she would request a revision of the opinion. Noichl said that the new proposal should focus on promoting more environmental and fairer CAP support. Noichl has long been one of the supporters of the mandatory capping of direct payments.

During the General Affairs Council meeting of 18/06/2019, the Council of the European Union published a document about the negotiations on the Multiannual Financial Framework (MFF) post 2020, which includes a chapter on the Common Agricultural Policy. The document does not yet state any specific figures indicating how much the CAP budget should be for the next seven years, a number of data remain in square brackets, i.e. not closed and meant to be discussed further. According to the document, the Council continues to negotiate three options for external convergence - the European Commission's proposal; the possibility of achieving external convergence by 202X; and the possibility of not continuing in external convergence. The Council's position is not yet final even in the case of capping - the latest version of the document states that capping will be implemented on a voluntary basis, with "voluntary" in square brackets again. Capping should not apply to eco-schemes and support for young farmers, the Council's position on this matter is unified so far, the possible inclusion of coupled payments and redistributive payments in capping is still being discussed. The financial reserve should be secured, however it still has not been set. Meanwhile, the Council envisages the possibility of shifting between pillars up to 15%, but this figure also remains in brackets. Document is available here.

A number of Member States (SE, NL, IE, IT, ES, LV) have expressed dissatisfaction with the speed at which MFF negotiations have been conducted under the Romanian Presidency. Budget and Human Resources Commissioner Günther Oettinger urged Member States to conclude a MFF agreement post 2020 until October 2019 in order to implement the new rules from 01/01/2021. In this context, Commissioner for Agriculture and Rural Development, Phil Hogan, supported the Budget Commissioner as well.