News

On 06/06/2019, the European Commission sent a reasoned opinion on infringements of EU regulations to representatives of Hungary and Poland. According to the Commission, Poland should bring into line with EU rules its national procedures for exemptions for imported alcohol used to manufacture medicinal products. Currently, Poland does not allow importers to benefit from compulsory excise duty exemption. Poland now has two months to react. According to the Commission, Hungary has not aligned its tax rates on cigarettes with the minimum EU threshold (60% of the valid weighted average retail price of cigarettes). Hungarian excise duty is below the threshold in the long term, leading to distortions of competition with other Member States. Hungary now has 2 months to react.

More information is available here.

Agriculture and Rural Development Commissioner Phil Hogan confirmed at the informal meeting of EU Agriculture Ministers in Bucharest that Mercosur countries have made substantial concessions in their negotiations with the EU. Further high-level political negotiations could take place in the week of 24/06/2019 in Brussels. According to Hogan, a final agreement could be reached before the G20 Summit in Osaka on 28-29/06/2019. Last month, negotiations made significant progress on EU priorities, such as car tariffs and the rules of indicating the country of origin. The EC now foresees tariff reductions of up to 28% for dairy products and 35% for champagne.

Elections to the European Parliament were held on 23-26/05/2019, results in individual EU Member States were gradually released in the course of the past week.

According to the results so far, the position of MEPs who also worked in the EP's Committee on Agriculture and Rural Development in the past was defended by: opponents of mandatory capping such as Peter Jahr (EPP, DE), Paolo De Castro (S&D, IT), Ulrike Müller (ALDE, DE), Maria Gabriela Zoana (S&D, RO) or Daniel Buda (EPP, RO); conversely, supporters of the mandatory capping that defended their posts are Luke Ming Flanagan (GUE/NGL, IE), Herbert Dorfmann (EPP, IT), Martin Häusling (Greens, DE), Maria Noichl (S&D, DE) and Clara Eugenia Aguilera García (S&D ES).

Spanish MEP Esther Herranz García (EPP), rapporteur for the EP report on the CAP Strategic Plans, which was adopted by the EP Committee on Agriculture and Rural Development in April 2019 and is still awaiting approval in the EP Plenum, was not re-elected and consequently, a new rapporteur is expected as well as a number of amendments to the report by new MEPs. Nevertheless, entire rejection of the April report and the start of activities for processing a new one are also possible. The approval of the report in the Plenary, which, according to optimistic estimates, is due to happen by the end of this year, could be postponed to the first half of 2020.

The current President of the Committee on Agriculture and Rural Development, Czeslaw Siekierski (EPP, PL), as well as Michal Dantin (EPP, FR), Albert Dess (EPP, DE) and Stefan Eck (GUE/NGL, DE) are also leaving the EP for various reasons.

The new European Parliament will strengthen the role of environmentally-conscious MEPs, and the position of nationalist factions will also be strengthened. For the first time, one mandate in the European Parliament has been won by PAN (People - Animals - Nature), which will fight for animal rights. So far, the strongest EPP faction should weaken from the current 216 mandates to 179, the second strongest S&D should weaken from 185 to 153 mandates. On the contrary, the ALDE faction’s number of mandates raises from 69 to 105, and of the Green Party, from 52 to 69. With a total of 751 MEPs, EPP and S&D will no longer be able to form a majority, so they will have to start working with one of the other factions to secure it. According to EPP chairman Manfred Weber, this faction could be ALDE.

As part of its Presidency, Romania continues to seek a partial general agreement on the legislative proposals of the CAP in the EU Council; the Romanian Presidency (RO PRES) in the Council ends on 30/06/2019, then the presidency will be handed over to Finland till the end of the year 2019. The last Council of Ministers for RO PRES will be held on 18/06/2019. So far, Denmark, the Netherlands, France and Spain are opposed to the adoption of a partial general agreement during June 2019, according to these countries, a Council working document prepared by RO PRES would be a sufficient output.

One of the most discussed aspects of the Commission's legislative proposal for the CAP is a new implementation mechanism of the CAP and application of national strategic plans for the CAP. A number of representatives of the Member States expressed their doubts about the deadline for the submission of the first draft of strategic plans. Moreover, most MSs rejected the Commission's proposal of annual inspections on fulfilling of the strategic plans - according to the majority of the Member States; the inspections should be carried out every two years.

Furthermore, the RO PRES suggests the provision of redistributive aid to be voluntary, not compulsory; and for MSs to be more flexible in defining large agricultural businesses (MS could define in the strategic plan the size of the farm with respect to the territorial dimension and/or the economic dimension). In addition, according to preliminary information, Romania could also propose that the introduction of eco-schemes would be voluntary not only for farmers, as proposed by the Commission, but also for Member States. In the RO PRES working document of 28/05/2019, RO summarizes support for coupled payments (VCS). Here, MSs are divided into four groups: support for the abolition of VCS payments (DE, NL, DK); support for Commission’s proposal 10 + 2% (AT, LU); support for maintaining the current level of 13 + 2% (FI, IT, EL, FR); and support for raising the level to 23% (CZ, BG, HR, HU, LV, SK, SI). Therefore, RO PRES proposes for the CAP post 2020 to maintain at least the current level of VCS payments at 13 + 2%. Furthermore, in the working document, the RO PRES proposes the control of business connectivity to be voluntary for Member States - according to the working document, MSs could determine in their strategic plans whether and how the activities of the connected enterprises are taken into account when assessing the actual farmer. In the document, RO PRES argues that the control of business connectivity would be very demanding and would cause a significant increase in administrative burdens, while the real number of interconnected companies is very low.

MS representatives will discuss the proposals at the informal Council of Ministers on 02-04/06/2019.
The Council working document can be found here.

The European Commission published on 27/05/2019 a report on the impact of the Common Agricultural Policy on climate change. The report states that there are no measures in the CAP to allow Member States to force their farmers to reduce greenhouse gas emissions. Moreover, the study shows that support for coupled payments leads to an increase in greenhouse gas production. According to the report, the CAP lacks sufficiently ambitious specific objectives, despite the proposal for the introduction of national CAP strategic plans. Agriculture and Rural Development Commissioner Phil Hogan said on 28/05/2019 that the policy structure of the approach to climate change has radically improved, but he acknowledged that more needs to be done to protect the environment.
More information is available here.