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Final agreement on new EU agricultural policy


Thursday, 27 June 2013

Final agreement on new EU agricultural policy

On 26th June, the European Parliament, the EU Council of Ministers and the European Commission reached an agreement on the package of the reformed European common agricultural policy (CAP), to be applied post 2013.
This is an historic deal, ending two years of negotiations between the three institutions. It was also the first time the European Parliament has had a direct say in shaping the farming policy under powers it acquired under the 2009 Lisbon Treaty. The deal now heads to the full Parliament and national governments for final approval.

According to the convergence criteria, by 2019, no single Member State will receive less than 75% of the Community average. Moreover, within a given Member State or region, divergences in the levels of aid will be reduced from one holding to the next: aid per hectare may not be less than 60% of the average of the aid disbursed by 2019. This is due to change the unfair current situation, in which, 20% of farmers receive 80% of the direct payments.  Member States will be able to increase support for small and medium-sized farms by allocating higher levels of aid for the 'first hectares' of a holding.

Another important change is that only active farmers may benefit from income-support schemes.
In addition, young farmers will be strongly encouraged to set up business, with the introduction in all Member States of a 25% aid supplement during the first 5 years in addition to the existing investment measures aimed at young farmers.
Young farmers were one of the elements of the reform which stayed particularly close to the European Commission’s original proposals, in practice amounting to a potential 800 million euros available to young farmers across the entire EU, CEJA - the European Council of Young Farmers – declared.

With regard to the environmental aspect, it was agreed that 'greening' of 30% of direct payments will be linked to three environmentally-friendly farming practices: crop diversification, maintaining permanent grassland and conserving 5%, and later 7%, of areas of ecological interest as from 2018 or measures considered to have at least equivalent environmental benefits. At least 30% of the rural development programmes' budget will have to be allocated to agri-environmental measures, support for organic farming or projects associated with environmentally friendly investment or innovation measures.
Environmental groups, meanwhile, saw little to celebrate in a deal that includes broad exemptions from mandatory greening measures first proposed by the Commission’s CAP reform in October 2011.
On greening measures, the compromise package:
•    Exempts farms of under 15 hectares from new requirements to create “ecological focus areas,” land that is to be set aside to promote biodiversity and help absorb farm runoff. Initially, the requirement will apply to 5% of farmland in 2015. Environmentalists, who wanted a 10% minimum, said the new standards mean little since the new CAP would exempt more than one-third of all farmland and 89% of farmers from the rules.
•    Frees farms under 10 hectares - or one-third of EU farms - from new crop diversification rules that are aimed to improve soil quality. Farmers with 10 to 30 hectares would have to plant two crops, while those over 30% would be required to plant three.
•    Exempts farmers from some EU environmental and water pollution laws, defeating efforts by the Commission and some MEPs to bring agriculture in line with other industries. Agricultural runoff is a leading source of nitrate contamination of fresh water supplies, environmentalists say.
•    Takes a step back from Commission proposals for EU-wide environmental mandates by giving member states flexibility to apply standards, options that environmental groups say will lead to uneven enforcement.

Other specifications of the agreement:
•    Sugar quotas will be abolished by 2017, and the organisation of the sugar sector will be strengthened on the basis of contracts and mandatory interprofessional agreements.
•    As from 2016, in the wine sector, the planting rights system will be replaced by a planting-authorisation management mechanism (applicable until 2030) in which professionals are expected to be involved to a greater extent.
•    The Commission will be able to temporarily authorise producers to manage the volumes placed on the market.
•    A simplified aid scheme for small farmers will be available to the Member States that so desire. Farmers with a few hectares of land could qualify for an additional payment of up to €1,250 per year, while national governments could use up to 2% of their CAP funds to encourage people under the age of 40 to become farmers.

All aspects of the reform will be applicable as from 1 January 2014, except for the new direct payments structure ('green' payments, additional support for young people, etc.) which will apply as from 2015 in order to give Member States time to inform farmers about the new CAP and to adapt computer-based CAP management systems.

Source: European Commission