CAP reform within the new MFF context

Economic Forum Krynica5-7 September 2018

Josefine Loriz-HoffmannDirectorate General for Agricultureand Rural Development

European Commission

#FutureofCAP

“The new budget is an opportunity to shape our future as a new, ambitious Union of 27 bound together by solidarity. With today's proposal we have put forward a pragmatic plan for how to do more with less.”

Jean-Claude Juncker, President of the European Commission, 2 May 2018

MFF - ALIGNED TO POLITICAL PRIORITIESSimplification, transparency and flexibility

Source: European Commission

Evolution of main policy areas in the EU budget

MFF - MATCHING PRIORITIES WITH RESOURCESRebalancing and fairness

Source: European Commission

*Adjusted for 1995 enlargement

billion € in current prices 2021-2027

CAP (Total) 365.0 -4.6%

Pillar 1 (EAGF) 286.2-1.1%

(-3.9% for Direct Paymentsand most market measures)

Pillar 2 (EAFRD) 78.8 -15.3%

Total public expenditure for Rural Development almost stable due to requirementfor increased Member States contributions

Re-balancing between EAGF and EAFRD possible through budget transfers: • 15% between both funds; • additional 15% from EAGF to EAFRD for environment/climate interventions; • additional 2% from EAGF to EAFRD for young farmers support

CAP 2021-2027 - BUDGET

1. Simplifying and modernising the policy

2. Rebalancing responsibility between EU and Member States (subsidiarity)

3. Shifting focus from compliance to performance

4. Ensuring fairer distribution of direct payments

5. Encouraging innovation

6. Enhancing ambitions in relation to the environment and climate

7. Taking up citizens’ concerns about quality and production methods

8. Mobilising rural capacities for jobs and growth

KEY ISSUES FOR DESIGNINGTHE FUTURE CAP

9 specificCAP

OBJECTIVES

COMMON CAP OBJECTIVES

7

Cross-cutting:• Knowledge & Innovation• Sustainable

Development• Simplification

3 General Objectives:• Foster a Resilient Farm

Sector• Bolster Environment and

Climate• Strengthen Fabric in Rural

Areas PreserveLandscapes & Biodiversity

SustainableResourceManagement

Climate ChangeActions

RebalancePower in Food Chain

Increase Competitiveness

Ensure Viable

Income

VibrantRural Areas

ImproveFood and Health,Animal welfare

SupportGenerational Renewal

Member States

EU Detailed rulesand

specifications

Beneficiaries

A NEW CAP DELIVERY MODEL

OVERVIEW - DIRECT PAYMENTS

Basic Income Support for Sustainability (BISS)

Complementary Redistributive Income Support

Eco Schemes

Complementary income support for young farmers(2% EAGFL)

Coupled Income Support

Reduction of Direct Payments in 4 progressive Steps(25% from EUR 60 000 to EUR 100 000)

Rou

nd

–su

m p

aymen

t for small

farmers

Enh

ance

d C

on

dit

ion

alit

y (E

nvi

ron

ent

and

clim

ate)

Largelyunchanged

… but a few important points for

higher effectiveness

and simplification

CMO instruments remain largely unchanged (safety netcomposed of public intervention and private storage aidand exceptional measures, but also marketingstandards, rules on farmers' cooperation, etc.)

Integration of sectoral interventions in the CAP planRegulation (for fruit and vegetables, wine, olive oil, hopsand apiculture)

Extension of the possibility to initiate sectorialinterventions to other agricultural sectors

Amendments to rules on geographical indications tomake them more attractive and easier to manage

Adjustment of allocations following the MFF proposal Delete a number of obsolete provisions

COMMON MARKET ORGANISATIONS

Member Statesdesign interventions

on the basis of8 broad EU

Interventions(replacing around 70

measures and sub-measures)

Area-specific disadvantages resulting from

certain mandatory

requirementsPayments for

natural or other area-

specific constraints

Environmental climate and

other management commitments

Investments

Cooperation

Risk management

Installation of young farmers

and rural business start-

up

Knowledge exchange and

information

RURAL DEVELOPMENT

Mandatory risk management tools

and Risk Management Strategy

Ring-fencing of total EAFRD contribution:

• 30% for interventions addressing the 3 environmental/climate objectives

• 5% for LEADER

Higher support rates for investment

Possibilities for combining Financial

Instruments and grants

Increase of the maximum amount of

aid for the installation of young

farmers(up to EUR 100.000)

Key Features

Digital strategie to be included in CAP Strategic Plans

Simplified implementation of

LEADERSimpler way of

ensuring coherence with other EU funds:CAP Plan instead of

Partnership Agreement

Man

dato

ry fo

r be

nefic

iarie

sVo

lunt

ary

for

farm

ers

Mandatory for M

S

Enhanced conditionality: 14 practices built on EU standards related to climate, water, soil, biodiversity ,and landscapes and requirements from Nitrates Directive, Water Framework Directive, and Natura 2000

Eco-schemes funded by EAGF

Environment and climate management commitmentsfunded by EAFRD

Higher ambition

Greaterflexibility

Targeting interventions towards EU objectives and

needs on te ground

Compensationfor area-specific disadvantages

Investments

Innovation

Knowledge transfer

Farm advisory services

Cooperation

THE NEW GREEN ARCHITECTURE

Thank you