Minister Kloeckner, Ministers, I am very grateful for this opportunity to discuss the Commission's proposal for a smarter and more modern CAP with you.
Your support is vital to making this proposal a success, and today I want to explain in greater detail why I believe it deserves your support.
Budget Focused on Results
As Commissioner Oettinger mentioned, this story is all about delivering better results. This has been the signature policy priority of this European Commission in designing the MFF proposal for 2021-2027.
We want every Euro spent on behalf of the European taxpayer to deliver a concrete, measurable result to benefit that same taxpayer. And the CAP, as the largest EU funded policy, is no exception. In fact, it should be seen to lead the way.
Of course, this view has also been a strong input from Germany and the German Länder. The Commission shares your assessment that a successful policy is one that delivers results.
The Commission has therefore designed a system that gives MS greater freedom and stronger tools to design agricultural policy solutions that will deliver better results.
Better results for our farmers, who will have clearer instructions adapted to national needs and less red tape in their daily work.
Better results for administrators, who will have greater flexibility to design schemes appropriate to local conditions.
Better results for our citizens, who will still enjoy access to the best, safest food products in the world.
And better results for our climate and environment, which benefits every single one of us.
Making this system a success will require every link in the chain to do its fair share of the work:
the farmer will have to be more aware than ever of the environmental and climate impact of his inputs and outputs, for example through a farm-level Sustainability Tool for Nutrients but also through an obligatory Farm Advisory Service which will have to cover the environment;
national administrations will have to upgrade their systems, develop a strategic plan for the entire policy, collect the relevant data and ensure that the right results are being achieved;
and the Commission will have to maintain a strong watchdog role, working closely with MS to make sure their plans are on track, and taking remedial action where necessary.
New Delivery Model
With this rebalancing of responsibilities between the EU and Member States we will achieve better targeting, enhanced performance-orientation and – if we do it right - greater simplification of the policy.
The CAP will continue to be based on a strong and common framework at EU level with safeguards to preserve its common nature.
This includes common objectives, common broad types of intervention with basic requirements, a key role for the Commission in the approval of the "CAP Strategic Plans" and a common list of indicators to monitor the implementation of the policy.
I know that the governance of the CAP Strategic Plan is a key issue for Germany. Therefore let me underline: Where elements of the CAP Strategic Plan are established at regional level - such as rural development in Germany - the Member State shall ensure the coherence and the consistency with the elements of the CAP Strategic Plan established at national level.
Furthermore, the CAP plan Regulation also requires Member States in their single national CAP Strategic plan provide a description of the interplay between national and regional interventions, including the distribution of financial allocations per intervention and per fund.
Acting within this common framework, Member States will benefit from increased flexibility and be able to design intervention strategies, choose types of intervention from the EU-level menu and adapt them to their particular circumstances.
This model hands them a clear opportunity to implement the CAP in ways which are genuinely simpler for administrations and beneficiaries.
I will make a detailed presentation on simplification at the next AGRIFISH Council on 16th July.
In a nutshell, what I will tell the Council is this:
I have made simplification one of the core priorities of my mandate and thanks to our continuous efforts we have already come a long way in achieving our targets. Let me briefly recall some of the main steps.
We modified the system of penalties for BPS and SAPS whereby a complex model based on three categories of over-declarations, each leading to a different penalty calculation, was substituted with a single model applicable to all over-declarations. This made the system of penalties simpler and more proportional as well, especially for first-time offenders and minor over-declarations where a 50 % reduction of the penalty is now foreseen.
And of course we brought in the "Yellow Card" system for first offenders.
In the Alignment exercise of the CMO sector specific-rules, we will reduce the number of regulations from more than 200 to 40 - most of this has already been achieved.
We made several changes to the basic acts in the "Omnibus" proposal which entered into force on 01/01/2018. Many simplification elements were included for direct payments, rural development and the common market organisation.
Now, having advanced as far as we can with successive waves of simplification in the current policy, the proposal for the future CAP offered us a chance to go further and to tackle the issue in a systemic way. And we used it.
You will have a real chance to come up with lighter and simpler CAP interventions, much closer to the beneficiaries.
The CAP Strategic Plan will help to avoid overlaps between pillars, which for instance will help the issue of the "definition of young farmers in pillars I and II". Another example is the fact that eligibility conditions will not be defined at EU level.
We will provide the tools to achieve simplification, but whether these opportunities are seized depends on the MS; for instance we will have fewer eligibility rules for many measures, such as investments (7 out of 13 are kept) and young farmers (Pillar 2 installation aid: 5 out of 15 are kept), but whether or not these opportunities for simplification will be used in practice will depend on the MS.
In the past Germany has shown a tendency to attach rather more than less strings to the support granted to farmers.
I am also aware that among you there are differing views in relation to the proposal's level of ambition related to the environment and climate. I have read all your letters sent to President Junker, myself and other Commissioners on this matter with great interest!
Let me repeat that I am determined that the future CAP will deliver a better outcome for the protection of our natural resources. I am very well aware that in the public debate the problems associated with the decline in biodiversity or the pollution of drinking water with nitrates features prominently.
But in my view, the legal proposal gives you all the tools to address these challenges. I am convinced that the proposal provides the right mix in order to pay our farmers for the extra work they need and want to do for the environment:
the new and enhanced conditionality includes more than 20 requirements each farmer has to respect, for example drawing up an on-farm nutrient management plan;
You will have the option to set aside a certain share of Direct Payments for an eco-scheme. You could for instance, support organic farmers through such a top-up under the first pillar;
And there continue to be the many tailor-made solutions for nature protection and agri-environment-climate commitments under the second pillar.
When drawing up their CAP Strategic Plans for environment, climate and biodiversity, each Member State will have to ensure:
Greater coordination between the CAP and existing EU climate- and environment-related legislation;
No harm to the environment or biodiversity as a result of investment support from the CAP budget;
No “backsliding” with regard to the environment and climate – in other words, current environmental standards are the benchmark for future policy.
MS will have to explain in their CAP Strategic Plans how the increased level of ambition in tackling climate change and protecting the environment will be achieved.
I hope you will agree that if these tools are used to their full potential they can truly support farmers in changing practice towards more sustainability.
Let me conclude by touching on the budget issue. Over the past three years, I have been reminded many times of the essential role which direct payments play, as a contract between citizens and farmers.
Direct payments protect farm incomes and provide vital support to our family farmers, and in return they guarantee our food security, maintain sustainable rural communities, and respond to our citizens' expectations of greater climate and environment action.
The choice, therefore, that the Commission made is to prioritise the protection of direct payments. Without a viable income to make a living, farmers will not stay in business, let alone provide more public goods and environmental benefits.
When it comes to rural development, MS allocations are based on a 15.3% decrease in EU funding, but I want to emphasise that we are not proposing to cut overall public expenditure!
The proposal is rather to rebalance EU and national support. We are following the same approach as the European Structural & Investment funds. For EAFRD, an increase in compulsory national co-financing is generally foreseen, with the aim to ensure that public support to rural areas will be largely maintained at current levels.
So you have the option to maintain RD funding at its current levels, albeit with a higher rate of national co-financing required.
Returning to the issue of fairness, this has been an overarching theme in discussions with farmers and with wider civil society.
In an effort to ensure a fairer distribution of payments and, particularly, to help our small and medium-sized farmers, who are the backbone of the European family farm model, the Commission has made a number of proposals with this objective in mind.
compulsory capping on direct payments, taking into account labour to avoid negative effects on jobs. MS will have the option to set a lower cap between €60,000 and €100,000. Between these two figures a system of degressivity will apply. The proceeds of capping will be redistributed within each Member State;
Member States will also be able to offer small farmers a round sum payment; and
in terms of internal convergence, MS will have to ensure that, by the end of the new MFF period, no payment per hectare will be less than 75 per cent of the average payment for basic income support for that MS.
I appreciate your support for keeping the CAP strong and well-funded and I hope you appreciate that in the current budgetary circumstances, including the imminent impact of Brexit, the fact that no MS will have a decrease of more than 3.9% in their direct payments is a fair outcome.
It is up to you and your colleagues around Europe to re-examine the budgetary issue if the political will is present. Thank you.