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Future of CAP in a Nutshell
1. MODERNISING & SIMPLIFYING THE COMMON AGRICULTURAL POLICY
TARGETED, FLEXIBLE, EFFECTIVE
EU Budget:
A STRONG BUDGET
FOR A STRONG CAP
JUNE 2018
the CAP after 2020
#FutureofCAP
3. Agriculture and
Rural Development
• THE FUTURE CAP PRIORITIES AT A GLANCE
Simplification and modernisation of the CAP
Support to the development of a knowledge-based agriculture
Higher ambitions on environment and climate
A fairer and more effective distribution of support across MS and farmers
3
4. Agriculture and
Rural Development
• WHY: LESSONS LEARNT FROM ASSESSING THE CAP
Analysis and wide public consultation confirm major achievements of the CAP…
• Increase in EU competitiveness turned the EU into a net agro-food value-added exporter
• Positive impact on jobs, growth and poverty reduction spread in all EU rural areas
• Relative income stability within a very volatile farm-income and commodity-price environment
…but analysis and public opinion also reveal shortcomings to be addressed…
• Despite progress, the environmental performance of EU agriculture requires improvement
• Productivity growth is mainly driven by labour outflow and less by R&I or investment
• Equity, safety net and simplicity questions persist despite CAP efforts to address them
…in a changing broader environment within which the CAP operates
• Expectations about the level of agricultural and commodity prices changed from CAP post-2013
• The world trade environment has shifted from multilateral to bilateral/regional agreements
• New climate change, environmental and sustainability commitments stem from COP21 and SDGs
4
10. Agriculture and
Rural Development
• THE CAP IN THE MFF CONTEXT
Continuity within new EU priorities in a post-BREXIT MFF
• A 5% cut in expenditure, but a more targeted approach to improve efficiency and performance
• The "C" in the CAP remains strong, implies a better sharing of responsibilities between EU and MS
• Better link to other policies (esp. environment, climate, research, health) improves mutual efficiency
Main changes in the CAP
• Stronger environmental/climate ambition with conditionality, echo-schemes and strategic plans
• Specifying the objectives that add EU value render the CAP more sustainable, simpler and modern
• Better targeting of support improves synergies between the economy and the environment
Main expected impact from changes
• Stronger reliance on research, knowledge transfer and digital economy to modernise CAP and sector
• A needs-based approach increases subsidiarity and flexibility to promote common EU objectives
• The CAP shift from compliance to performance parallels MFF shift towards more focus on incentives
10
11. Agriculture and
Rural Development11
HOW MUCH: CAP BUDGET IN PERSPECTIVE (current prices)
0.0%
0.1%
0.2%
0.3%
0.4%
0.5%
0.6%
0.7%
0.8%
0
10
20
30
40
50
60
70
80
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
as share of GDPin billion EUR
Export subsidies Other market measures Coupled support
Decoupled support of which direct payments of which green payments
Rural development - environment/climate Rural development - other measures Pillar I 2021-2017 proposal (excl. mkt)
Pillar II 2021-2027 proposal Current CAP excl UK CAP as share of EU GDP
EU-10 EU-12 EU-15 EU-25 EU-27 EU-28 EU-27
Source: EC-DG AGRI.
Note: Budget figures are actual until budget year 2016, programmed from 2017-2020, and based on the MFF proposal for 2021-2027.
12. Agriculture and
Rural Development12
FOR WHOM: CONVERGENCE OF DIRECT PAYMENTS (2027)
Source: EC-DG AGRI.
Note: Direct payment amounts exclude payments for cotton.
0
100
200
300
400
500
600
MT EL NL BE IT HR CY DK DE SI FR EU
27
LU AT IE HU CZ ES SE FI PL BG SK RO PT LT LV EE
EUR/ha
Average DP/ha baseline Average DP/ha after cut before convergence
Average DP/ha after cut after convergence (2027) New EU average
Baseline EU average 90% of EU average after cut before convergence
14. Agriculture and
Rural Development
Ensure fair income
Increase Competitiveness
Rebalance power in food chains
FOSTER A BOLSTER STRENGTHEN
RESILIENT FARM SECTOR ENVIRONMENT AND CLIMATE FABRIC IN RURAL AREAS
14
WHAT FOR: THE NEW ARCHITECTURE OF CAP OBJECTIVES
SPECIFIC CAP OBJECTIVES
BROADER CAP OBJECTIVES
Generational renewal
Vibrant rural areas
Food and health quality
Climate change action
Environmental care
Landscapes and biodiversity
Economic
Environment
& Climate
Environment & Climate Social
CROSS-CUTTING CAP OBJECTIVES
ModernisationSustainability Simplification
15. Agriculture and
Rural Development
• WHAT FOR: PRIORITIES OF THE FUTURE CAP
Strengthening environment and climate action
• EU sets wide objectives and list of available types of intervention on air, water, soil, biodiversity
• MS Strategic plans define the pertinent actions to meet EU objectives based on MS specific needs
• Farmers apply for schemes and comply with stringent environmental criteria defined by EU/MS
Better targeting of support
• DPs provide an important safety net for farm income lagging behind the rest of the economy
• Better targeting of income support improved with internal convergence and redistributive payments
• Fairer distribution is improved with digressive cuts above 60 000 € and capping at 100 000 €
Relying more on knowledge, innovation and technology
• A better link of what we know to what we grow is promoted by the use of smart agriculture
• Anticipating future knowledge needs promoted with more funding for research to address them
• Exchange and knowledge transfer relies more on improved functioning of the FAS/EIP Systems
15
17. Agriculture and
Rural Development
EU Specific objectives
Set of common IndicatorsEU
Broad types of interventions
Identification of needs in MS's CAP Plan
Tailor CAP interventions to their needs
Implementation / Progress towards targets
MEMBER
STATES
HOW: THE NEW DELIVERY MODEL OF THE CAP
17
18. Agriculture and
Rural Development
Common Output Indicators
Annual Performance Clearance
Linking expenditure to outputAssurance
Monitoring Common Result Indicators
Annual Performance Review
Checking progress towards targets
Policy
performance
Common Impact Indicators
Interim Evaluation
Assessing performance towards objectives
Multi-annual programming approach for the whole CAP
COMMON OBJECTIVES INDICATORS TYPES OF INTERVENTIONS
HOW: FOCUS ON PERFORMANCE
18
19. Agriculture and
Rural Development
HOW: THE NEW GREEN ARCHITECTURE OF THE CAP
19
Voluntaryfor
farmers
Eco-schemes
in Pillar I
Climate &
Environmental
measures in Pillar II
(AECM, Forestry measures,
investment measures… )
Cross-compliance
(on Climate/Env, 7 GAEC standards - water, soil, carbon stock, landscape -
and requirements from Nitrates Directive and Natura 2000 Directives)
Greening
(3 detailed obligations on crop diversification, permanent
grassland and EFA)
Level of
requirement
Climate & Environmental
measures in Pillar II
(AECM, Forestry measures, investment
measures… )
New, enhanced conditionality
(on Climate/Env, 14 practices built upon EU minima (climate change,
water, soil, biodiversity and landscape) and requirements from Nitrates
Directive, Water Framework Directive and Natura 2000 Directives)
Current architecture New architecture
Mandatoryfor
farmers
Mandatory
forfarmers
Voluntaryfor
farmers
Mandatoryfor
farmers
Farm advisory
services
Knowledge
transfer
Innovation Cooperation
40% of
budget
climate
relevant
21. Agriculture and
Rural Development
• WHAT FOR: SUSTAINABLE, SIMPLER, MODERN
Sustainability
Environmental ambition increased and streamlined, with safeguards introduced in legislation
Climate action enhanced with 40% of budget climate-relevant
Various interventions focus on preserving landscape features and promoting biodiversity
Simplification
Less legal and regulatory prescription of EU requirements
Strategic plans are tailored to local needs and driven by evidence
Detailed rules are defined by MS, and are thus closer to their realities
Modernisation
Farm advice requirements enhanced and better integrated to CAP interventions
Adaptation of the CAP and EU agriculture to encourage digital transformation
Support for research and innovation strengthened in Horizon Europe
21
22. Agriculture and
Rural Development
• FOR WHOM: A FAIRER AND MORE TARGETED DISTRIBUTION
Redistribution
Reduction of all direct payments above EUR 60 000 and capping at 100 000
Salaries and labour costs are taken into account in capping
Complementary redistributive income support to tailor redistribution to MS farm structures
Targeting
Additional amount per hectare to allow shift from bigger to smaller and medium-sized farms
Complementary income support for young farmers
Greater flexibility in choice of DP distribution and regionalisation at MS level
Convergence
Within MS, all payment entitlements with a value at least 75% of the average (by 2026 at latest)
Optional maximum hectare value per entitlement
MS with DP 90% below EU average close the gap to 90% of this average by half over 6 years
22
23. Agriculture and
Rural Development
FOR WHOM: RESPONDING TO SOCIETY'S EXPECTATIONS
Generational renewal
More measures to develop succession plans and encourage entry into farming by new generation
Encouragement of MS to do more in national legislation on taxation and inheritance
Improvement of access to land by young farmers can be best addressed by national rules
Vibrant rural areas
Improved MS flexibility to design RD measures promoting jobs and growth
Support for smart villages and other measures promoting diversification in rural economy
Increased investment and encouragement of bio-economy
Food, health and animal welfare
Strengthening measures to better link the CAP to broader societal demands on food quality
Encouraging the reduction of antibiotics and pesticides to better address health challenges
Further encouragement of measures responding to consumer demands for animal welfare
23
24. Agriculture and
Rural Development
REPORTS AND MORE INFORMATION
On MFF Material
https://ec.europa.eu/commission/publications/factsheets-long-term-budget-proposals_en
http://ec.europa.eu/budget/mff/index_en.cfm
On CAP legislative proposals, Impact Assessment and Background
https://ec.europa.eu/info/food-farming-fisheries/key-policies/common-agricultural-policy/future-
common-agricultural-policy_en
Thank you for your attention!
24
26. Agriculture and
Rural Development
• IMPACT ASSESSMENT: ITS LOGIC AT A GLANCE
Problem definition, intervention logic, EU value added
• Problem to address: targeting, environment/climate ambition, simplification, modernisation
• Main change in policy orientation: shift from compliance to performance
• Rebalancing EU and MS responsibilities: focus on objectives and interventions adding EU value
Objectives, indicators and monitoring data
• The entry point for assessing long-term policy performance is the set of CAP specific objectives
• Indicators link, directly or indirectly, supported interventions to the achievement of objectives
• Streamlined Monitoring and Evaluation Framework reflects CAP policy shift towards performance
Constraints, main policy questions and the selection of options
• The unknown budget envelope led to one budgetary assumption – CAP post-BREXIT
• Options mainly differentiate income distribution and environmental/climate ambition aspects
• Multi-criteria analysis complements model results - both assess risks and mitigating safeguards
26
27. Agriculture and
Rural Development
• IMPACT ASSESSMENT: ANALYSED OPTIONS
27
0
10
20
30
40
50
60
70
80
90
100
ENV
Optionscore(/100)
3a (high ambition/voluntary)
3b (low ambition/voluntary)
4a (high ambition/voluntary)
4b (low ambition/mandatory)
Budget allocation of analysed options -
fixed overall budget assumption
Environmental score of options -
impact of ambition and voluntary nature
Source: Future CAP Impact Assessment.
29. Agriculture and
Rural Development
• ASSESSING THE EFFECTIVENESS OF POLICY OPTIONS
29
Effectiveness of options towards objectives
(all options)
0
20
40
60
80
100
Viable farm
income
Competitiven
ess
Farmers'
position in
value chain
Climate
change
mitigation &
adaptation
Sustainable
resource use
Nature &
landscapes
Generational
renewal
Growth in
rural areas
Address
territorial
imbalances
and poverty
Base Pre-Brexit Base Post-Brexit 3 4 5
0
20
40
60
80
100
Viable farm
income
Competitiven
ess
Farmers'
position in
value chain
Climate
change
mitigation…
Sustainable
resource use
Nature &
landscapes
Generational
renewal
Growth in
rural areas
Address
territorial
imbalances…
3a 3b 4a 4b
Effectiveness of options towards objectives
(sub-options based on ambition)
Source: Future CAP Impact Assessment.
Note: Sub-options differ with respect to their degree of environmental
ambition (a indicating higher ambition than b) and their voluntary (3) or
mandatory (4) nature.
30. Agriculture and
Rural Development
• IMPACT ASSESSMENT: ITS CONCLUSIONS AT A GLANCE
Redistribution and better targeting of support: income effects
• Income effects are asymmetric with respect to farm size and sector affected
• Both cuts and the distribution of support matter, negatively impacting short-run competitiveness
• Flexibility in redistribution of support crucial in mitigating potentially negative income impacts
The dilemma of raising environmental ambition: mandatory or voluntary?
• Voluntary measures increase flexibility and improve targeting, but introduce uncertainty in ambition
• Mandatory measures increase area coverage and improve ambition, but are by design less targeted
• The right balance, based on needs and evidence, requires appropriate administrative capacity
Risks and mitigating factors: impact on modernisation and simplification
• Challenges at the EU level: Simplification of legislation and approval procedures of Strategic Plans
• Challenges at the MS level: Evidence supporting a needs-based approach for Strategic Plans
• Challenges at the farm level: Better link to advice and faster integration into Farming 4.0 realities
30
31. Agriculture and
Rural Development
THE CAP CYCLE: POTENTIAL RISKS
31
PLANNINGPOLICY
IMPLEMENTATION
EVALUATION
PERFORMANCE
AND ASSURANCE
• Uneven national requirements
• Insufficient use of innovative solutions
for checks and monitoring
• Insufficient performance
Implementation issues
• Un-level playing field between farmers
• Insufficient uptake of intervention
Market risks
Inadequate strategy
• Imbalance between economic,
environmental and social dimensions
• Complex or incoherent strategy
• Inadequate targeting of beneficiaries
Lack of vision
• Lack of support towards modernisation
• Lack of ambition with regard to targets
Administrative risks
• Adequate administrative capacity
Timing issues
• Inadequate planning of data monitoring
• Timely evaluation results
Implementation issues
• Insufficient quality of monitoring data
• Inappropriate capacity for planning
• Unfair treatment of CAP plans
• Delays in approval of CAP plans
Administrative and timing issues
32. Agriculture and
Rural Development
THE CAP CYCLE: SAFEGUARDS
32
PLANNINGPOLICY
IMPLEMENTATION
EVALUATION
PERFORMANCE
AND ASSURANCE
No back-sliding rule
Conditionality
CAP plan content
requirements
EU basic requirements
Budget earmarking
Annual review meetings
Reduction in payments
Monitoring committee
meetings
Performance reporting,
review and clearance
Action plan for
remedial actions
Financial correction
Suspension of paymentsPerformance bonus
EU audits
Interim evaluations (CAP Plan)
Ex-post evaluation
Interim evaluation and report
(EC)
SWOT analysis
Ex-ante evaluationStakeholder consultation
CAP Plan approval
EC support
