CAP Reform Main Points

27th June, 2013

1. DIRECT PAYMENT

Overall national budget for theSingle Farm Payment reduced to €1.217m in 2014 from €1.230m (net of modulation)in 2013.

Up to 2% of national ceiling tobe used for young farmers’ scheme.

Up to 3% of basic payment ceilingto be used for the national reserve.

Financial discipline: Linear cutson payments above €2,000 to avoid breaches of the financial sub-ceiling and/orto finance the new crisis reserve.

Redistribution of DirectPayments

Two options – flat rate orpartial convergence (Irish model) by 2019. Partial convergence:

  • Farmer with payments below 90% of the national average payment per hectare have
    their payments raised by one-third of the difference between their currentpayment and 90% of the national average,

 

  • This is financed by reductions to payments above the national average payment per hectare,
  • Minimum payment of 60% of national/regional average payment per hectare,
  • Optional maximum 30% loss on convergence,
  • MS flexibility on how payment reductions are applied to those above the average,
  • 30% variable greening (30% of a farmer’s individual payment, rather than a flat rate).

As an add-on to either the flat-rate or partial convergence models, an optional redistributive payment, on up to 30 hectares or the national average farm size, if higher.

Only farmers paid in 2013 can be automatically allocated new entitlements.

The number of entitlements to be allocated to be equal to the number of eligible hectares declared in either 2013 or 2015 (to be decided by Member States).

Active Farmer

Member States to set minimum activity level for areas “naturally kept in a state suitable for grazing or cultivation”. Member States may also exclude from payment those for whom farming is an insignificant part of their economic activity. No payments to be made in respect of airports, railway services, waterworks, real estate services and permanent sport and recreational grounds. Member States may add to this list.

National Reserve

Funded by up to 3% of basic payment ceiling. To be used to allocate payment entitlements as a priority to young farmers and to farmers commencing their agricultural activity.

Coupled Payments

Voluntary provision for Member States to couple using 8% of their annual national ceiling, plus a further 2% for protein crops.

Member States who implemented more than 5% coupled aid in one year in the period 2010-2014 permitted a level of 13%, plus 2% for protein crops.

Member States who implemented more than 10% in one year in the 2010-2014 period may decide to use more than
13% upon approval by the Commission (Article 39).

Young Farmer

Mandatory scheme under Pillar 1, using up to 2% of national ceiling.

Small Farmer

Optional scheme, with a maximum payment of €1,250, using up to 10% of the national ceiling. Five payment methods
to accommodate circumstances in Member States. Cross-compliance and greening controls are not applied.

Greening

30% of direct payment contingent on compliance with greening criteria with option to apply the 30% to the farmer’s individual payment

Three Criteria:

Crop Diversification – Exemption for farmers with less than 10
hectares of arable land, 2-crop requirement between 10 and 30 hectares, and
3-crop requirement over 30 hectares. Exemption for farmers with over 75% of
holding under grassland (permanent and temporary), and with over 75% of arable
land under temporary grassland, provided the remainder of their land is less
than 30 hectares. Main crop maximum of 75%.

Permanent Grassland – Maintenance at national, regional or farm
level. New permanent grassland ratio to be created using 2012 declarations,
which will be updated using additional lands declared in 2015. Threshold for
conversion of permanent grassland compared to the reference ratio is 5%. Ban on
ploughing of certain designated lands in permanent grassland within Natura 2000
areas where the areas are environmentally sensitive and where the objectives of
the Directive require them to be strictly protected.

Ecological Focus
Areas
– Applies to arable land
only. Permanent crops are excluded. Exemption where arable land of a holding is
less than 15 hectares. If over 15 hectares, 5% of the arable land must be
ecological focus area, increasing to 7% in 2017 after a Commission report and
legislative act. List of qualifying areas includes fallow land, terraces,
landscape features and buffer strips. Weighting matrix in respect of
areas/features included. Similar to crop diversification, exemption for holdings
where more than 75% of the holding is in grassland (permanent or temporary), or
covered by crops under water, or a combination of both, subject to a maximum
for the remaining land of 30 hectares. Exemptions also for holdings where more
than 75% of the arable land is temporary grassland, fallow, leguminous crops,
or a combination of these, subject to a maximum for the remaining land of 30
hectares.

 

Equivalence

List of equivalent practices allowing farmers to satisfy the three greening criteria, which will not be the subject of double funding.

Greening Penalty

No additional penalty for non-compliance in the first two years, then maximum of 20% of greening payment in year 3 and 25% in year 4.

 

2. SINGLE CMO

Market Supports – Reference prices to be kept under review. Opening of public intervention to be discretionary. Durum wheat added to the list of products intervened. Intervention price for beef and veal increased to 85% of the reference price. Greater flexibility for Commission to intervene in exceptional circumstances. Export refunds to be confined to exceptional circumstances.

Specific Milk Measures
– The intervention period for butter and skimmed milk powder to be extended by
one month, to end-September. The limit for fixed-price buying-in of butter/SMP
into intervention to increase to 50,000 tonnes (from 30,000 tonnes), and PDO/PGI
cheeses to be included in the list of products eligible for APS (but only after
maturation period).

 

Producer Organisations – voluntary recognition of
producer organisations and extension of activities, linked to the continued
application of competition rules to their activities. Contractual negotiations
by producer organisations on behalf of their members extended to beef and veal,
olive oil and certain arable crops.

 

Sugar – Quotas to be abolished in 2017.

Wine – New planting authorisations system to commence in 2016, with 2030 expiry date and 1% annual increase in authorisations.

 

3. RURAL DEVELOPMENT

Annual average EU funding of €313 million until 2020. *

 

Measures – include support
for agri-environment and climate measures, organic farming, Natura 2000 and
Water Framework Directive, farm and business development, quality schemes,
afforestation (including the promotion of the sustainable management of
forests) and irrigation measures.

 

Areas of Natural Constraint – will replace current Less Favoured Areas. New biophysical criteria
to be applied in the identification of ANCs. Commencement in 2018.

 

* to be confirmed following agreement on EU budget.

27 June 2013