The CAP towards 2020 Legal proposals Selected slides from different presentations by DG Agriculture and Rural Development European Commission Selected slides from different presentations by DG AGRI

Where are we with the CAP reform process? 12 April – 11 June 2010 Public debate (EU citizens and organisations) 19-20 July 2010 Public conference 18 November 2010 Commission Communication ‘The CAP towards 2020’ 23 November 2010 – 25 January 2011 Consultation on Impact assessment (stakeholders) 29 June 2011 Commission proposals on the EU budget 2014-2020 12 October 2011 Commission legal proposals on the CAP The legal proposals are accompanied by an impact assessment that evaluates alternative scenarios for the evolution of the policy on the basis of extensive quantitative and qualitative analysis Timetable of the CAP reform. Important to understand that now there is co-decision on CAP reform. End of the negotiation will depend on Parliament & Council discussions. Debate in the European Parliament and the Council 2011-2013 Approval of Regulations and implementing acts

How will the CAP be financed? Commission proposals on Multi-Annual Financial Framework for 2014-2020 to maintain CAP spending at 2013 levels in nominal terms in billion EUR Current prices - Pillar I - Direct payments and market-related expenditure 317.2 - Pillar II - Rural development 101.2 Total Pillar I and II 418.4 - Food safety 2.5 - Most deprived persons 2.8 - Reserve for crises in the agricultural sector 3.9 - European Globalisation Fund Up to 2.8 - Research and innovation on food security, the bio-economy and sustainable agriculture 5.1 Total additional amounts Up to 17.1 Total proposed amounts for the period 2014-2020 Up to 435.5 Budget for the next CAP should be maintained compared to the current CAP (appears in a separate commission proposal). Source: Commission Communication ‘A budget for Europe 2020’ – COM(2011) 500 final, part II.

The path of CAP expenditure 1980-2020 (in current prices) It is important to figure out that an important objective for the EU has been to make the CAP more « WTO compatible ». The trend in recent CAP reforms show an increasing decoupling of the support from the production. The coupling has been substituted with direct payments. Greening the direct payment helps to legitimate the CAP towards the WTO partners. Source: DG Agriculture and Rural Development Notes: 2011 = Budget; 2012 = Draft Budget; 2013 = EAGF subceiling for direct payments and market-related expenditure + pillar 2 in commitments. Rural development for 2013 includes UK voluntary modulation and Article 136 “unspent amounts”. As these cease to exist end 2013, the corresponding amounts are put back to direct aids as from 2014.

… and how will the CAP address them? Commission Communication ‘The CAP towards 2020’ Legal proposals Challenges Policy objectives Reform objectives Europe 2020 Viable food production Economic Enhanced competitiveness Sustainable management of natural resources and climate action Environmental Improved sustainability Balanced territorial development Territorial Greater effectiveness This gives an overview of the overall objectives mentioned in: - the 2010 communication, - the 2011 legal proposals. Simplification

What CAP instruments to meet the reform objectives? Enhanced competitiveness Improved sustainability Greater effectiveness Improved economic tools to address market developments Crises reserve / Risk management toolkit Improved position of farmers in the food supply chain Research, innovation and knowledge transfer and an improved Farm Advisory System New ‘green’ payment in Pillar I Enhanced cross compliance Two environmental priorities for rural development Research, innovation and knowledge transfer and an improved Farm Advisory System Redesign of direct payments Common strategic framework for EU funds Redistribution of direct payments across and within Member States Allocation of rural development envelopes Simplification of the policy This details the different tools to meet the different selected objectives. Water protection is mainly concerned by the middle column “improved sustainability” Pillar I Pillar II Flexibility

New design of direct payments (2) Degressivity and Capping (all layers except Green Payment) Coupled support Natural constraint support Wide range of sectors Up to 5% or 10% of DP envelope, to be decided by MS For areas with natural constraints Up to 5% of the DP envelope Small Farmer Scheme Simplification of claims and controls Lump sum payment to be determined by MS under conditions Entrance in 2014 Up to 10% of the DP envelope Young Farmer Scheme Up to 2% of DP envelope < 40 years For 5 years Commencing activity Streamlined – Climate change Cross compliance ‘Green’ Payment Crop diversification Permanent grassland Ecological focus area 30% of the DP envelope Basic Payment Scheme Important aspects for water protection are: Green payments will condition 30% of the direct payments. The green measures are potentially relevant for water protection. A simplified scheme is considered for small farmers (the ambition on water protection could be an issue) Cross compliance is « streamlined ». This concerns water protection (next slides) National or regional flat rate per eligible hectare Regions and criteria to be chosen by MS New entitlements in 2014 Definition of agricultural activity Definition of active farmer OR

The issues of water and pesticides are specifically addressed Cross compliance The issues of water and pesticides are specifically addressed Water Proposal: The Water Framework Directive will be considered being part of CC when implemented by all MSs and obligations directly applicable to farmers are identified. Delegated power to the Commission to change the Annex. The introduction of the WFD into the scope of CC is confirmed Conditions to add the the WFD to cross compliance However the timing will depend of its proper implementation on the ground

The issues of water and pesticides are specifically addressed Cross compliance The issues of water and pesticides are specifically addressed Water Proposal: In the meantime, status quo for CC: The repealed Groundwater Directive is replaced by a GAEC standard to keep the status quo from 2013. The Nitrates Directive is kept The 2 current GAEC standards on use of water and buffer strips are kept The SMR provisions on groundwater are maintained through a new GAEC. The 2 existing GAEC on water protection are maintained. The water issue continue being addressed unchanged until the introduction of the WFD

The issues of water and pesticides are specifically addressed Cross compliance The issues of water and pesticides are specifically addressed Water Proposal: However the Water Framework Directive is included in the scope of the Farm Advisory System to help the start up phase of its implementation by farmers Until full implementation, the onus is put on advice rather than on sanctions WFD is added to the scope of FAS.

«Green» Payment (payment for agricultural practises beneficial for the climate and the environment) On top of Basic Payment Scheme (BPS) Compulsory for MS and for farmers if they opt for BPS Additional per hectare payment to fulfil 3 measures depending on the land use on the farm Crop diversification on arable land: minimum 3 crops (max 70% and min 5%) Parcels of permanent grassland shall be maintained at farm level 7% of arable land and permanent crops should be devoted to ecological focus area (fallow land, terraces, landscape features, buffer strips, etc.) Just mention the 3 measures in discussion. They can all potentially be relevant for water protection but the ambition of the requirements is an issue. Implementing rules will bring more precisions. 11 11

Rural development in a new framework Europe 2020 strategy Common Strategic Framework (CSF) – covering the EAFRD, ERDF, ESF, Cohesion Fund and EMFF, and reflecting EU2020 through common thematic objectives to be addressed by key actions for each of the funds Partnership Contract – national document outlining the intended use of the funds in the pursuit of EU2020 objectives Rural development policy: EAFRD Other CSF funds (ERDF, ESF, Cohesion Fund the EMFF) Innovation, Environment and Climate Change as cross-cutting themes Promoting social inclusion, poverty reduction and economic development in rural areas Enhancing competitiveness of all types of agriculture and farm viability Promoting food chain organisation and risk management in agriculture Restoring, preserving and enhancing ecosystems dependent on agriculture and forestry Promoting resource efficiency and supporting the shift towards a low carbon and climate resilient economy in agriculture, food and forestry sectors Fostering knowledge transfer and Innovation in agriculture, forestry and rural areas The different axis are suppressed and we will have a priority based approach. Mainly 2 priorities will be relevant to water protection: Restoring, preserving and enhancing ecosystems « dependent » on agriculture and forestry Promoting resource efficiency The same rules as today might apply: voluntary approach with mandatory cofinancing. Priorities Rural Development Programme(s) 12 12

Some relevant measures Agri-environment-climate Organic farming Natura 2000, Water Framework Directive Payments Forest-environmental and climate services and forest conservation Mainly unchanged. Organic farming will be considered separatly.

WFD (and Natura) payments Compensation per hectare for specific requirements: introduced by WFD; in accordance with river basin management plans; going beyond level of legal protection existing when WFD was adopted; going beyond measures required to implement other EU water protection legislation; going beyond cross-compliance; going beyond “green operations” of direct payments; imposing major changes in land use and / or major restrictions in farming practice, leading to significant loss of income Provisions of article 38 would be maintained in a new article 31.

An overarching objective: Simplification Examples Policy instruments A simple and specific scheme for small farmers (around 30% of beneficiaries) Greening as simple as possible, includes only measures that have an environmental impact AND are manageable / controllable without major extra cost; Payments Only one Paying Agency for all CAP measures in a MS/Region A range of approaches to reimbursing payments by beneficiaries on the basis of simplified costs (II Pillar); Controls MS with properly functioning control systems and low error rates may be authorised to reduce the number of controls Cross-compliance: reduction and better streamlining of the obligations (13 SMRs instead of 18 and 8 GAEC instead of 15), follow-up checks to minor infringements repealed; farmers using certification systems less likely to be controlled. Simplification is an important objective in the CAP reform. The challenge is that the ambition on environmental protection is not lowered. 15