New Agricultural Rules: Fairer and Greener, But With Lower Funding for Farmers

After three years of intensive negotiations between the European Parliament and EU Member States, the reform of the Common Agricultural Policy (CAP) was finally approved by the end of 2013. Due to the fact that the implementation of the new legislation into national standards will take at least half a year, the new CAP rules will come into force in 2015.

As in previous years, the CAP is to become the biggest slice of the European budget pie (39%). Under the new rules, quota systems, namely for milk, sugar and wine, should progressively disappear. The modernized CAP Directive should have an impact on Czech farmers especially as regards the reduction of direct payments. Other impacts of the reform on Czech farmers and the CAP benefits in general were discussed during the debate co-organized by CEBRE on the 19th February 2014 in the European House in Prague.

According to Tassos Haniotis, Director of the Directorate of Economic Analysis, Perspectives and Evaluation and Acting Director of Directorate for Direct Support, Market Measures and Promoting, the new CAP rules will more focus on supporting farmers rather than on promoting individual products. Greater emphasis will be also put on the quality and sustainability, which are, together with increased competitiveness of European agriculture, the main objectives of the CAP reform. There will be certain change in the share of direct payments, where the amount of money awarded to the Czech Republic will be slightly diminished. Nevertheless, according to Mr. Haniotis, the direct payment scheme will be fairer and the whole The new Czech government, established in January, seems to be more EU orientated than the previous one. According to new Prime Minister Bohuslav Sobotka and new Minister of Foreign Affairs Lubomír Zaorálek, the Government is ready to adopt the EU fiscal pact very shortly. This is a significant change of orientation as the previous Government was strictly against and was, together with the UK, the only EU Member State that hadn ́t adopted it. It is not clear yet when the fiscal compact will be signed, but it is sure there is a sufficient political support to it. The topic was also raised by Czech President Miloš Zeman during his speech at the plenary session of the European Parliament in Strasbourg system of support will be more transparent and effective. In the context of cuts in direct payments, Haniotis stated that the financial resources taken from direct payments would stay in the same Member State and will be used on rural development. Jaroslava Beneš Špalková from Czech Ministry of Agriculture perceives the new CAP rules as fairer and with a potential to the red tape reduction. Regarding the decrease of direct payments awarded to large farms, Špalková stressed that the Czech Republic managed to minimize the reduction in direct payments in negotiations with other Member States in the way that capping of direct payments is voluntary.

The CAP reform also introduces new environmental measures, such as crop diversification and maintenance of permanent grasslands. Even though the Czech Republic highly supports these measures, they should not significantly interfere with the production capabilities and competitiveness of Czech companies and be rather voluntary.