The choice of how to distribute Common Agricultural Policy (CAP) aid is the main lever for action under this policy, and this lever underpins much of the investment capacity and future prospects of EU farms. It reflects the EU’s priorities for the future of agriculture and farms on the continent.
Since the beginning of its term, the current College of Commissioners has focused the debate on concentrating CAP subsidies on “those who need them most”, a particularly difficult challenge given the climate, agronomic, geographical and sectoral sensitivities, and also difficult given the need for a European approach to avoid distortions of competition while offering sufficient flexibility to respect the diversity of farm structures.
On 16 July, the European Commission therefore decided to put forward a double proposal for a significant budget reduction for the CAP, accompanied by a radical redistribution of aid, combining a degressive support scheme above €20,000 and a cap of €100,000.
Farm Europe has analysed the scope of the formula envisaged by the European Commission on the basis of public data on the distribution of aid in 2022. These data provide a tool for analysing the structure of farms across the Union. Although the figures are not accurate to the nearest euro, they provide a solid initial projection that can be refined by national paying agencies.
This analysis reveals that the degressivity and capping rates for basic income support will hit hardest those farmers who are currently the backbone of European production. More than half of the EU’s utilised agricultural area would be affected by the reduction in aid, rising to two-thirds when the smallest farms (receiving less than EUR 5,000 in aid), which are mainly concerned by flat-rate aid or at the threshold for such aid, are excluded. One third of farmers with more than 12 hectares would see their subsidies reduced by the degressivity at EU level.
This European analysis is not enough to realise the full extent of the consequences of the formula chosen by the European Commission. In countries such as France and the Czech Republic, which have very different structures, it is the very agricultural model of the country that would be called into question. In France, more than 50% of farmers receiving more than €5,000 per year would be affected by a reduction in aid, representing 73% of the total agricultural area in France. In the Czech Republic, this figure would rise to 85% of the productive sector concerned. In Italy, known for its relatively small average size farms, no least that 57% of the hectares would be affected by degressivity when it comes to structures not eligible to the small farmers scheme.
On various scales, all Member States would be severely affected by this proposal, which seems to be dictated more by a desire to save money than by a genuine desire for fairness or a vision for the future of the sector. While the European executive has expressed the welcome ambition of refocusing policy on those who produce, its proposal to target ‘those who need it most’ would therefore do the opposite.
Such a formula would further increase the economic pressure on farms, which currently account for the bulk of EU production. There is no doubt that this approach would accelerate the process of agricultural restructuring across Europe, encouraging expansion and making it particularly difficult for young farmers to set up traditional family farms. It could also encourage EU farmers to focus their efforts on reducing costs rather than optimising production, which would seriously undermine the objective of agricultural sovereignty.
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O artigo foi publicado originalmente em Farm Europe.