Shortcomings in the current CAP
The Common Agricultural Policy (CAP), in the EU budget listed under the heading of ‘Preservation and Management of Natural Resources’, represents an enormous public investment in agriculture: €55 billion, or 42% of the total 2008 EU budget, is spent on supporting farming, mostly through direct payments (EC, 2008b).
In the past, the CAP has specifically incentivised production, driving intensification at great cost to the environment. After the 2003 reform of the CAP, the system of direct payments to farmers in the ‘old’ Member States was replaced with the ‘Single Payment Scheme’, while a simpler ‘Single Area Payment Scheme’ has been applied in the ‘new’ Member States. In both payment schemes subsides are no longer linked to production (= decoupling), but to farm area. However farmers entitlements are now mainly calculated based on subsides paid in the past (historical baseline) which again is linked to (past) production.
The conditionality of these payments to farmers’ compliance with basic environmental and animal welfare standards (“cross-compliance”) does not change the fact that a huge share of CAP subsidies (European taxpayers' money) is spent without any clear policy objective.
Public money spent does not deliver public goods
BirdLife International believes that the future of the CAP must be based on the principle of paying farmers and land managers to deliver the public benefits that EU citizens expect and need from farming and which, unlike food, are not rewarded by the market: healthy ecosystems, wildlife, clean water, fertile soils and beautiful landscapes. The current system broadly fails to do so. Most of current spending (Pillar 1 -- 74% of the CAP budget in 2008) is untargeted and severely biased in favour of the most competitive and intensive sectors and farmers, as the payment to each farm is allocated based on the amounts received during a historic reference period 2000-2002, in turn based on previous production subsidies. The majority of farmers receiving high payments are located in old Member States, and have been responsible for the widespread loss of farmland wildlife.
Traditional farming does not receive enough support
Due to the characteristics of traditional farming practices: low stock densities, low use of chemical inputs and the presence of semi-natural vegetation; such agricultural landscapes often contain high levels of biodiversity, and are called High Nature Value (HNV) farmland. Particularly important HNV farmlands for biodiversity are small-scale agricultural farming systems still common in central and eastern Europe, responsible for creating and maintaining species-rich semi-natural grassland (EEA, 2004a).
However, 86% of the €286 billion for Pillar 1 (2007-2013) is being allocated to the old EU-15 Member States (IEEP, 2008), the direct payments are concentrated in the hands of intensive farmers who are responsible for various environmental problems and biodiversity loss. Within this system, millions of subsistence and semi-subsistence farmers, many of them from new member states, who are practising traditional farming practices which maintain Europe’s natural and cultural heritage, do not receive the necessary support and often do not receive any subsidies at all. Indeed, according to WWF Danube-Carpathian Programme, around 70% of subsistence and semi-subsistence farmers in Bulgaria and Romania do not receive any support due to the minimum land size requirement in the Single Area Payment Scheme (Kazakova, 2008).
Limited funding for the environment and rural economy
Currently, only around 24% of the CAP budget is allocated to rural development measures, housed within Pillar 2. Within this Pillar, only a tiny proportion of the entire CAP budget is dedicated to Agri-environment Schemes. Agri-environment scheme is th most promising part of the CAP which benefits wildlife, the environment and the rural economy. The schemes support farmers who adopt higher environmental standards that result in public benefits such as wildlife and clean water. However, insufficient funding in rural development measures, in particular Agri-environment schemes, means that the influence these measures have on farming decisions is dwarfed by the impact of Pillar 1 measures.
Furthermore, even rural development measures are often used to support environmentally destructive practices, for example:
Funding unsustainable drainage and irrigation expansion , and inappropriate afforestation;
Using agri-environment money to pay for practices that have no clear environmental benefit, or for practices that would be followed anyway;
Less Favoured Area payments that go to all farmers in designated areas, regardless as to whether they practise environmentally friendly farming.
Weak control / compliance
As part of the 2003 CAP reform, cross-compliance was made compulsory to all farmers receiving direct payments. Farmers may have their direct payment reduced, or in extreme cases, completely cancelled, if they do not respect a set of Good Agricultural and Environmental Conditions (GAEC) and Statutory Management Requirements which are linked to 18 EU Directives and Regulations relating to the protection of environment, animal welfare, as well as public, animal and plant health (EC, 2008c).
Though this looks good on paper, many of the problems with cross-compliance have arisen with implementation at the Member State level. The current control system is based on a very small number of random visits to farms, which in many areas amount to an individual inspection rate of once in a century. Together with the small and temporary penalty to farmers if non-compliance occurs, this weak and ineffective sanction system cannot guarantee minimum environmental standards, especially in a time of high commodity prices where there can be substantial economic benefits for breaking the rules. According to information collected by the European Commission, inspections took place on just under 5% of farms receiving the Single Payment in 2005, and around 12% of these farms were penalised for not meeting the required standards (IEEP, 2007). However, most of these violations were on animals registration and other sanitary issues, with environmental or biodiversity-related offences rarely being penalised.
European Commission (2008b) General budget of the European Union for the financial year 2008 – The figures. Available at: http://ec.europa.eu/budget/library/publications/budget_in_fig/syntchif_2008_en.pdf
European Commission (2008c) Health Check of the CAP. Guide. Available at: http://ec.europa.eu/agriculture/healthcheck/guide_en.pdf
EEA (2004a) High nature value farmland. Characteristics, trends and policy challenges. EEA report No.1/2004. Available at: http://reports.eea.europa.eu/report_2004_1/en/EEA_UNEP_Agriculture_web.pdf
IEEP (2007) Future policy options for cross compliance. Background paper for the 26 April 2007 Cross compliance policy seminar, Brussels. Deliverable 23. Available at: http://www.ieep.eu/publications/pdfs/crosscompliance/future_policy_options_for_cc.pdf
IEEP (2008) Funding for farmland biodiversity in the EU: Gaining evidence for the EU budget review. Available here
Kazakova (2008) Farmers managing High Nature Value Farmland. Presentation in the workshop ‘ High Nature Value farmlands: Recognizing the European importance of South-East European landscapes. Organised by the European Forum on Nature Conservation and Pastoralism and WWF Danube Carpathian Programme. Brussels, 15th May 2008. http://www.efncp.org/download/YankaKazakova_FarmersIssues_Bxl2008.pdf
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