11th National Selection Conference of the European Youth Parliament Ukraine
Committee on Agriculture and Rural Development
Chairperson: Andreas JANSSEN (NL)
Farming for the future: As four out of five Europeans are expected to live in urban areas by 2020, how should Europe's food supply be secured, given rising standards for sustainable food production and smart climate agriculture?
The CAP and climate smart agriculture

What is the CAP and how does it work?

The Common Agricultural Policy (CAP) is a 'common policy', meaning all EU Member States have to adhere to it. Member States, specifically those with large agricultural sectors, finance the two funds from which subsidies are paid out to farmers. These funds are in shared management between the EU and its Member States; the Member States themselves, rather than the Commission, make the payments to farmers.The CAP consists of two main pillars, one for directly financing farmers and the other for increasing rural development. Under pillar I, all farmers are eligible for a basic payment or Single Farm Payment (SFP), based on the size of their fields.

What does the CAP do for the environment?

Employing around 22 million farmers and workers directly, as well as being the base for 44 million additional jobs in food processing and services, agriculture is one of the biggest economic sectors of the European Union. However, inappropriate farming techniques can have severe adverse effects on the environment, due to pollution and loss of diversity in wildlife. If Europe's food production is to remain sustainable, new ways of climate smart agriculture should be found.

The CAP has identified three main priorities for protecting the EU's rural areas. Roughly speaking, these are:

- preserving biodiversity and traditional agricultural landscapes;
- regulating (excess) water use;
- dealing with pollution and climate change.

To achieve such goals, there are two systems integrated in the CAP: the provider-gets-principle and the polluter-pays-principle. Under the former, it gives targeted aid to farmers who use environmentally sustainable farming techniques. This incentive is also known as a green payment. Since the 2013 reform, Member States are obliged to use 30% of the funds provided for direct payments for green payments.

Under the polluter-pays-principle, the CAP sanctions farmers who do not comply with environmental law by reducing their subsidies.

Is this enough?

There are several objections to be made on the CAP's environmental benefits. One objection is that present funding for green payments remains largely insufficient. Big polluting farmers still receive many of the funds allocated for other direct payments. Further 'greening' of pillar I through incentives and mechanisms should be created, in order to cut back emissions and preserve innovation.

Another objection is that green payments should be result-based rather than action-based; instead of receiving payments for implementing environmentally beneficial practices, farmers should receive rewards based on the positive effects brought on by their practices.

The CAP and sustainable food production

Since 2003, direct payments under the CAP have been 'decoupled' from production, instead taking the form of the present one-time payment. This was an important development, as farmers became incentivised to produce for the market, not for the subsidies. However, important steps are still to be made.

Firstly, the CAP is still incentivising overproduction. Meat production especially has come to an all-time high. A natural consequence is that produce is wasted, or is sold cheaply on foreign markets, where it ruins domestic farmers.

Secondly, the CAP is said to hurt smaller farmers. As payments are based on the size of farms, bigger farmers benefit far more from subsidies. This also makes it harder for smaller farmers to innovate and use the latest farming technology.

Finally, there are several critical voices on how much the CAP promotes rural development in general. There are currently 118 rural development programmes active (both national and supra-national). A study by the European Parliament found that these programmes are relatively successful in creating agricultural jobs, but fall short on creating jobs in other sectors within rural areas. As urbanisation, automatisation and liberalisation of the agricultural sector are expected to lead to unemployment among farmers, rural programmes have to be reconsidered and maybe adapted to the challenges of this structural change.

Key questions

- How can a new CAP reform make agriculture both economically sustainable and environmentally friendly?
- Should further greening of the CAP rather involve incentives (provider-gets) or sanctions (polluter-pays)?
- What further incentives should be created to make pillar I of the CAP more environmentally friendly?
- Should CAP green payments remain action-based, or become result-based?
- What changes to the CAP could prevent (the harmful effects) of overproduction?
- How could smaller farmers benefit better from the CAP's farming subsidies? Should a SFP based on field size be reconsidered?
- How can new rural development programmes cope with the problem of long-term urbanisation and automatisation?

Links for further research

A BBC article discussing automatisation and robotisation of the agricultural sector:http://www.bbc.com/news/business-38089984

A podcast by the European Parliamentary Research Service on the challenges faced by the CAP:https://www.youtube.com/watch?v=A8o8UET6RQI

Article by the Institute for European Environmental Policy (a non-profit think tank) advocating result-based green payments:https://ieep.eu/news/improving-environmental-financing-via-result-based-agri-environment-measures

European Commission on integrating environmental challenges in the CAP: https://ec.europa.eu/agriculture/envir/cap#provider

European Commission explaining funding opportunities under the CAP: https://ec.europa.eu/agriculture/cap-funding/funding-opportunities_en

An article by advocates of CAP reform on reforms needed regarding rural development programmes:

Watch the video from your Chairperson:
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