No agreement found on the Common Agricultural Policy reform

28 May 2021

In the course of the ‘super trilogue’ scheduled for the 26 and 27 May, Council and Parliament negotiators failed to agree on a reform of the Common Agricultural Policy (CAP). Thus, after three years of intensive negotiations, there is still no clear picture of the CAP’s future shape. It should be recalled that the initial proposal of the Commission, tabled in June 2018, had as an objective to make the CAP more sustainable in ecological terms and ensure a fairer distribution of the EU subsidies, while safeguarding a decent income for the farming community. 

After the interinstitutional negotiation and alternated meetings in the Agriculture and Fisheries Council, the disagreement amongst the co-legislators concerned the following issues.

Regarding the green architecture, the ringfenced budget for the climate and environment action is still under discussion. This is, in particular, true for the payments of the rural development budget, where disagreements persist on how to count the climate relevance for payments for areas of natural or other specific constraints. While the amount dedicated from the European agriculture guarantee fund (EAGF) for eco schemes is also still open, it looks as if a compromise around a reserve of 25% is possible if some flexibilities are introduced. 

Finally, a further sticking point on the greening of the CAP is the strengthening of the proposed system of conditionality that links the full payment of direct income support to the respect of environmental standards. With respect to this issue, Member States want to weaken the enhanced conditionality, a proposal both the Commission and the European Parliament oppose. 

Concerning the fairness of the distribution of the income support, it should also be noted that 20% of farmers receive approximately 80% of the direct payments. The Commission proposal regarding on a cap of €100,000,that would have addressed this issue, was rejected by the Member States. However, it seems that co-legislators can accept to reserve 10% of the budget for income support for redistribution to smaller farmers. 

Another topic on which progress, but no final solution, has been achieved concerns the introduction of a “social conditionality” provision, which links the CAP to the respect of certain social rights of farms workers. This proposal received particular backing by the Socialists and Democrats in the European Parliament. Another issue that is still contentious between the Council and European Parliament concerns the introduction of rules prohibiting the import of products that do not meet European production standards on environmental and animal welfare.  

As a consequence of yesterday’s failure to reach an agreement, the co-legislators will schedule another negotiation round for mid-June under the Portuguese Presidency.

Meanwhile, the delay on the adoption of the CAP reform has no immediate impact on farmers as the CAP for the years 2021 and 2022 is covered by a transitional agreement that was found in late 2020.