"Health Check" of the Common Agricultural Policy
In November 2007 the European Commission unveiled its blueprint
for streamlining and further modernising the European Union's Common
Agricultural Policy. The so-called 'Health Check' of the CAP will
build on the approach which began with the 2003 reforms, improve the
way the policy operates based on the experience gathered since 2003
and make it fit for the new challenges and opportunities in an EU of
27 Member States in 2007. The reforms have modernised the CAP, but
the Health Check represents a perfect opportunity to take the policy
It will ask three main questions:
- how to make the
direct aid system more effective and simpler;
- how to make market
support instruments, originally conceived for a Community of Six,
relevant in the world we live in now; and
- how to confront new
challenges, from climate change, to biofuels, water management and
the protection of biodiversity.
Today's Communication is designed to
kick off a wide-ranging six-month consultation. Next spring, the
Commission will return with legislative proposals, which it hopes
will be adopted by agriculture ministers by the end of 2008 and
could come into effect immediately. During 2007 and 2008 the
Commission will develop its approach to the budgetary review
2008/2009. The Health Check constitutes a preparatory action within
this framework, without prejudging the outcome of this review. It
fine-tunes the 2003 reforms and contributes to the discussion on
future priorities in the field of agriculture.
Making the Single Payment Scheme simpler and more efficient
The Communication raises ideas including:
- moving away from payments based on historical receipts towards
a "flatter rate" system.
- increasing the rate of decoupling in those countries which
opted in a number of farm sectors to maintain the link between
subsidy and production, although coupled support may still play
a role in regions where production is small-scale but of
particular economic or environmental importance.
- gradually reducing the support level as overall payments to
big farmers increase, starting from a level of, for example,
€100,000 per year. This would have to differentiate between
multiple-owner farms with many workers and single-owner farms
with just a few.
- increasing the amount of land a farmer has to own before he
qualifies for EU support from the current level of 0.3 hectares.
- reviewing the Cross Compliance standards which farmers
are obliged to respect to receive their support from
Brussels. This could mean stripping out unnecessary
obligations, but also adding new ones to deal with new
challenges like improving water management and mitigating
Adjusting market support instruments to make them relevant
for an EU of 27 in 2007
The Communication asks:
- should intervention revert to its original purpose as a
real safety net – particularly as market prices today are in
such good shape?
- could intervention for most cereals be set at zero while
maintaining intervention for a single cereal (bread-making
- should set-aside not be abolished, while finding new
ways of preserving the environmental benefits it has
- milk quotas are already programmed to disappear in 2015,
but should there not be a gradual increase in quotas between
now and then to allow a 'soft landing' for the sector? This
must look at possible measures to help dairy farmers in
those regions of the EU – like mountain areas – which depend
heavily on dairy production.
Responding to new challenges
The Communication looks at how agricultural policy can
respond to the new challenges and opportunities facing EU
These include: managing risk, fighting climate change,
managing water more effectively, making the most of the
opportunities offered by bioenergy and preserving biodiversity.
Climate change and water management objectives could be met
through Cross Compliance.
There should be incentives to improve action in these areas
but this will cost money.
The best way to finance the necessary new measures is through
Rural Development policy.
The Communication proposes increasing the rate of
'modulation', i.e. the reduction of direct payments to all farms
receiving more than € 5,000 per year and the transfer of the
money into the Rural Development budget.
This would be increased gradually from 5 percent now to
13 percent in 2013.
It must also be examined whether the energy crop premium is
still necessary given new incentives for biofuel production such
as the compulsory bioenergy targets and high prices.
Reforming the budget