CAP – Past – Present – Future
Did you know that?
- The EU’s Common Agricultural Policy (CAP) has been in existence for over 50 years. It is one of the oldest EU policies that supports farmers and guarantees Europe’s food security.
- By the end of 2017, people directly employed in agriculture in the European Union are about 9.1 million people. Agriculture, food industry and related retail and services together provide about 44 million jobs in the EU.
- Agriculture, food industry and related retail and services together provide about 44 million jobs in the EU.
- Almost every fifth working Bulgarian (or about 20 percent of the active Bulgarian population aged 15-64) was engaged in some kind of activity in agriculture.
- Through the CAP quality policy, the EU provides a number of measures to help producers further develop the reputation for high quality European products.
- 78% of Bulgarians agree that the CAP is beneficial not only for farmers but also for all EU citizens.
For more than 50 years the Common Agricultural Policy (CAP) is the most important common policy of the European Union (EU). The basic objectives of the CAP set out in the Treaty of Rome have kept their relevance and importance over the years. The CAP itself, however, has evolved and the reform course introduced in the early 1990s led to a new policy structure that reflects changing socio – economic, environmental and political conditions impacting on EU agriculture, as well as changes in the agricultural sector, the food sector, forestry, and also in rural areas.
|1957||The Treaty from Rome established the European economic community ( predecessor on today’s EU), between six West European countries . The CAP is foreseen as common policy which objectives are to ensure food at accessible prices for citizens of the EU and good standard of life for agricultural manufacturers .|
|1962||The common agricultural policy (CAP) is created! The goal of the policy is to provide good prices for agricultural manufacturers . With each year agricultural manufacturers produce ever more food. Shops are filled with food on acceptable prices. The goal to provide food security is achieved.|
|70s and 80s of the 20th century||Management on supplies . Agriculture is so productive that farmers produce more food from necessary. Surplus is stored , which leads to the accumulation of ” mountains from food “. Measures are taken to adapt production to the needs of the market.|
|1992||The CAP shifts from assistance to the market to assistance to the manufacturers . The price support has been reduced and replaced with direct payments of benefits to agricultural manufacturers . They are encouraged to do be more environmentally friendly . The reform coincides with the Earth Summit at Rio de Jeanneiro in 1992 , where the principle for sustainable development is pushed.|
|Mid 90s of the 20th century||CAP places larger accent on food quality. The policy introduces new measures for assistance on investments in agriculture, economy, training, improved processing and marketing. Steps are taken for the preservation of traditional and regional foods. The first European legislation for organic rural economy is put in place.|
|2000||The CAP focuses more on economic , social and cultural development of rural regions in Europe . At the same time the reforms from the 90s for the creation of more market oriented agricultural manufacturers continue.|
|2003 г.||Reform in the area of the CAP interrupts the link between subsidies and production. Agricultural manufacturers are more market oriented and receive assistance on income, determined by specific obstacles to agriculture economy in Europe . In return they must respect standards related to food safety , the environment and humane attitude towards animals.|
|Beginning of the first decade of the 21st century||The CAP is open to the world. The EU becomes the largest importer of agricultural products in the world, importing more than the United States, Japan, Australia and Canada put together . According to the Everything but Arms initiative the EU offers free access to its market to all the weakest developed countries . No other developed country has provided such openness, commitment and real market access to farmers in developing countries.|
|2007||The number of those involved with rural Agriculture in the EU doubles due to the accession of 12 new countries in 2004 and 2007. Eighteen years after the fall of the Berlin wall the European union is in a format of 27 Member States and has over 500 million citizens. EU agriculture and rural areas are changing.|
|2011||New reform of the CAP aiming to strengthen economic and environmental competitiveness of the agricultural sector. Promotion of innovation, fight against climate change, improving labor employment and growth in rural regions.|
During the formation of the common agricultural policy for the current programming period (CAP 2014-2020), another important reform was implemented in 2013. While the main objective of this reform is to respond to the dynamic challenges facing the agricultural sector, the CAP has also been amended to contribute more to the achievement of the Europe 2020 objectives by promoting smart, sustainable and inclusive growth.
The CAP is a major part of the total EU budget spending, which is spent in three different ways:
1) Farmer income support and compliance with sustainable farming practices: Farmers receive direct payments provided they meet strict food safety, environmental and animal health and welfare standards. These payments account for about 60% of the CAP budget. According to the 2013 reform, 30% of direct payments will be linked to compliance by European farmers with sustainable farming practices that are improving soil quality, biodiversity and the environment as a whole (such as crop diversification , maintenance of permanent grassland and maintenance of ecologically directed areas on farms).
2) Market support measures: These measures provide a safety net and are mainly applied when there is a tendency for markets to destabilize due to unfavorable conditions. Payments for such measures represent approximately 15% of the CAP budget. Income support and market support measures are the so-called “First pillar” of the CAP.
3) Rural Development Programs (RDPs): these programs are based on an in-depth analysis of the program area and the set of measures to help farmers modernize their holdings and become more competitive, protect the environment and contribute to the diversification of agricultural and non-agricultural activities and the viability of rural communities. These programs are the “second pillar” of the CAP. They are multiannual, partly funded by the Member States and amount to almost 25% of the CAP budget.
Why do we need a common rural development policy? Rural development policy is vital given that over 56% of the population of the 27 countries of the European Union (EU) lives in them. They account for 91% of its territory. Thanks to the EU’s rural development policy, these parts of the EU’s territory are able to meet the many economic, social and environmental challenges of the 21st century. Often called the “second pillar” of the CAP, this policy complements the system of direct payments to farmers and measures to regulate agricultural markets (the so-called “first pillar”). Rural development policy shares a number of objectives with the other European structural and investment funds (ESIS). Member States and regions prepare their rural development programs based on their needs involving at least four of the following six EU common priorities:
- promoting knowledge transfer and innovation in agriculture, forestry and rural areas;
- enhancing the viability and competitiveness of all types of farming and promoting innovative agricultural technologies and sustainable forest management;
- promoting the organization of the food chain, animal welfare and risk management in agriculture;
- restoring, preserving and strengthening ecosystems related to agriculture and forestry;
- promoting resource efficiency and facilitating the transition to a low carbon and climate change compliant economy in agriculture, forestry and the food sector;
- promoting social inclusion, poverty reduction and economic development in rural areas.
- For the period 2014-2020, three major CAP objectives are set out and the existing CAP instruments have to be amended to meet these long-term policy objectives:
- efficient food production: contribute to food security by increasing the competitiveness of agriculture in the EU while providing the means to address the challenges of caused by the disruption in the market and the functioning of the food chain that the sector faces;
- sustainable management of natural resources and climate action: to ensure the long-term sustainability and potential of agriculture in the EU, safeguarding the natural resources on which agricultural production is dependent;
- balanced territorial development: contribute to the socio-economic development of rural areas, while promoting the right conditions for the preservation of structural diversity within the EU.
The budget for the 2014-2020 CAP represents about 38% of the total EU budget. The total CAP expenditure for the seven years of the current programming period amounts to € 408.31 billion. Based on the commitments of the CAP budget in 2020 there should be a reduction of around 15% compared to 2013.
The future Common Agricultural Policy for the period 2021-2027 puts forward nine priority objectives:
- support for sustainable income;
- improving competitiveness;
- restoring the balance of power in the food chain;
- combating climate change;
- promoting the sustainable use of natural resources;
- conservation of biodiversity;
- support for intergenerational continuity;
- promoting jobs and growth;
- ensuring high quality food.
On June 1, 2018, the European Commission presented three legislative proposals on the future of the CAP, which aim to prepare the CAP for the future:
- Proposal for a Regulation on strategic plans for the CAP;
- Proposal for a Regulation on the Single Common Market Organization (CMO);
- Proposal for a horizontal Regulation on the financing, management and monitoring of the CAP.
The Commission’s proposals include initiatives at EU level:
- a single set of EU-wide targets for the whole CAP, indicating what the farmers, citizens and climate policy is about to achieve;
- a wide range of different types of interventions agreed at EU level setting out what Member States can do with the funds allocated to them;
- a common set of performance indicators will be agreed at EU level to ensure a level playing field in assessing the effectiveness of the measures used.
Each country should prepare a strategic plan for the CAP with the specific needs, indicating in each plan how the Member State will use CAP funding to meet these needs, including the tools to be used and specific objectives. Each country will be free to choose the concrete measures it considers most effective in view of its specificities, based on a clear assessment of its needs.
The Commission also proposes:
- restrictions on direct payments to farmers in excess of EUR 60 000 and compulsory setting of a ceiling on farm payments (taking into account labor costs in full) over EUR 100 000 for a more equal distribution;
- further approximation of levels of aid for direct payments between Member States;
- a new “green architecture” of environmental and climate interventions and an obligation for Member States to allocate at least 30% of their rural development budget to environmental and climate measures. 40% of the total budget of the CAP will be linked to climate action;
- a budget cut of up to 10% (+ 2% for protein crops) from direct payments, the inclusion of non-food crops with potential for the replacement of fossil materials in the bio-economy;
- simplify rural development programs by defining common objectives at EU level and giving Member States more flexibility to adapt actions to their specific needs in order to preserve the EU-wide support for rural development;
- 8 broad areas of intervention are proposed in rural development programs to be adapted to the needs of the Member States, thus replacing the currently existing 70 measures and sub-measures;
- increasing the share of RDP co-financing for Member States to allow them to maintain their ambitious investment objectives in rural areas;
- obligatory programming of risk management tools in the RDP without minimum budget requirements;
- various tools to promote intergenerational continuity;
- the possibility of transferring funds up to 15% between pillars plus an additional 15% + 2% of Pillar I to Pillar II, respectively for the environment / climate and for young farmers, etc.
The CAP budget 2021-2027
The Commission proposal for a multiannual financial framework (MFF) for the period 2021-2027 for the CAP is set at EUR 365 billion (at current prices), representing 28.5% of the total EU budget. From them:
- EUR 265.2 billion is for direct payments;
- EUR 20 billion is for market support (EAGF)
- EUR 78.8 billion for rural development (EAFRD).
In addition, EUR 10 billion will be allocated for research and development in the food, agriculture, rural development and bio-economy from the EU Horizon Europe Research Program.
The European Parliament and the Council, which are co-legislators in the process, are preparing their views on the Commission’s three proposals for the CAP regulations for the period 2021-2027. Achieving an agreement for the next long-term budget in 2019 is expected to ensure a smooth transition between the current (2014-2020) and the new long-term budget, as well as predictability and continuity of funding.
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