Blog Posts Ellen Huan-Niemi Agriculture, Economy, Forestry

The European Commission is pressured to do something substantial on how money is distributed in the agrifood and rural sectors by reforming the Common Agricultural Policy (CAP). Will Finland be an “innovator” or “laggard” in promoting sustainable and climate friendly agriculture in the new CAP?

With a smaller budget and ageing farmers, it is positive to limit the highest CAP payments, while re-orientating towards younger and smaller farmers. However, enabling significant change in agronomic practices is nowhere to be seen in leak CAP proposals. As a result, EU member states can influence the structure of the new CAP.

When Finland submitted its application for membership in the EU in 1992, it was evident that a major agricultural reform was in store for Finland. Since joining the EU, the main agricultural policy in Finland has been to compensate for the permanent drawbacks in the country’s competitive abilities due to challenging climate conditions and the small size of farm enterprises. Finland has strived to fit into the CAP and secure the future of Finnish food production.

CAP’s new delivery model will compel EU member states to think about why agricultural support matters.

New financial realities, an ageing farming sector and Brexit are forcing the EU to rethink the way money is spent on the CAP after 2020. The new CAP will include nine specific objectives, which the EU member states should follow when setting their national strategic plans, as part of the new and reformed CAP. Under the CAP’s new delivery model, Brussels will dictate the broad objectives and leave the EU member states free to draft their own strategic plans, based on local conditions.

This new model will comprise important changes at EU and the national levels in terms of sharing responsibilities, thus providing greater accountability to the EU member states. This will compel EU member states to think about why agricultural support matters to them and which policy instruments are most appropriate for delivering the desired outcomes.

The new CAP with greater national accountability is an excellent opportunity for Finland to showcase its ability to reform the current policies and design support plans that are result oriented with a clear focus, based on these objectives:

  1. Support viable farm income and resilience across the EU territory (to support food security);
  2. Increase competitiveness and enhance market orientation;
  3. Improve farmers’ position in the value chain;
  4. Contribute to climate change mitigation and adaptation;
  5. Foster sustainable development and efficient management of natural resources;
  6. Preserve nature and landscapes;
  7. Attract new farmers and facilitate their business development;
  8. Promote employment, growth, social inclusion and local development in rural areas (including bio-economy); and
  9. Address societal expectations on food and health.

These nine specific objectives are a striking innovation in the leaked CAP proposals because in the past one would have tended to view the CAP’s objectives as being self-evident, thus avoiding the need to debate whether all parties actually shared the same objectives. It is unlikely that the EU member states would have any issue with the specific objectives, but by enumerating them, the European Commission will at least be able to require that the national support plans contribute towards achieving these common objectives.

CAP administrators in Brussels clearly want to draw a line under the confusion and incoherence of the CAP reforms of 2013, which produced the so-called “greening provisions” that are widely viewed as being unfit for its purpose. The European Court of Auditors found that only 5% of land use changed is due to “greening provisions”, despite the severe environmental need for changes in managing agricultural lands. Furthermore, another report discovered that EU support to young farmers is ill-defined and is not tied to specific results or expected impact.

Greening is the big absent of the 95-page leaked draft on the future CAP. Limiting the CAP payments at 60,000 euros, a specific compulsory payment to small farmers, adjustment of basic income to basic income support “for sustainability”, changes in young farmer supports, and a move from rural development over to risk management via insurance are some of the leaked CAP proposals.

The details of the proposals may change before the European Commission unveils them, and they will definitely be revised significantly before getting the approval from the EU Council and Parliament.

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