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The new CAP — building on the transition in Europe

Interview with Janusz Wojciechowski, Commissioner for Agriculture

Janusz Wojciechowski.

When Janusz Wojciechowski became Commissioner for Agriculture in December 2019, his task, according to his mission letter, was to ensure that ‘the agricultural sector continues to deliver on its enduring commitments while supporting it to adapt to changes in climate, demographics and technologies.’ A key instrument in achieving this would be the new Common Agricultural Policy (CAP), and it was his responsibility to conclude the then ongoing negotiations with an agreement that, according to his mission letter, had to be ‘ambitious in terms of food security and environmental and climate objectives.’ When we spoke with the Commissioner for Agriculture in mid-June 2021, the trialogue negotiations were in their final stage — or so he hoped, and now we know his optimism was justified. Optimism prevailed when we interviewed him, as he looked for solutions, building on data that urged him to press for action, not least by the Member States.

By Derek Meijers and Gaston Moonen

Different hats for the sake of better public policy making

In his professional life, Janusz Wojciechowski has seen many sides of public service, having served in the judicial, legislative and executive branches, and also as an external auditor both at Member State and EU level. ‘I had the opportunity to work on agricultural policy issues as a Member of Parliament, as a Member of the European Parliament, but also as head of the Supreme Audit Office in Poland and in my position as ECA Member.’ He thinks that this experience, in particular as ECA Member auditing the CAP, was an opportunity to gain a wide view on the implementation of the EU’s agriculture policy. ‘What works well, what mistakes, what kind of errors are there in the implementation, and, of course, the recommendations. The ECA’s recommendations are very important for the implementation of agricultural policy in practice.’ He underlines this not only applies to ECA recommendations regarding agriculture. ‘As Commissioner, I am a member of the College and on many issues considered by the College I use recommendations provided by the ECA, a very good information base. Having been a Member of the ECA is a very helpful experience for my current work as Commissioner.’

Janusz Wojciechowski is not the first ECA Member to become a Member of the European Commission. ‘I think Máire Geoghegan-Quinn from Ireland also went from the ECA to the European Commission.’ Then, with a smile: ‘I am the second person to make such a transfer and maybe the first one who has experience in three EU institutions — Parliament, Court of Auditors and Commission.’ He reiterates how useful his ECA experience is. ‘Today, when we discussed some issues for the trialogue negotiations on the new CAP, I also used the ECA recommendations to formulate our position. It is really useful for me that I can recall many of the ECA’ recommendations. And the position and arguments of the ECA are such that its recommendations are treated very seriously.’

Monoculture at the cost of sustainability

In his work as an MEP, Janusz Wojciechowski pleaded for the interests of small and medium size farms, and as ECA Member he reported on the position of young farmers. He connects these issues to the Commission’s ambitions for a greener, more sustainable agricultural sector. ‘We have the problem in European agriculture — the problem of the tendency of concentration of production and upscaling towards bigger and bigger. We can observe this especially in the life-stock sector — the poultry and pig meat sectors, for example. Small and medium size farms are not able to compete with these big, sometimes enormous farms. This development creates many negative consequences for sustainable development. In some regions of Europe production is concentrated, in other regions that same sector is finished, almost gone.’

Speaking about consequences, the Commissioner comes up with some shocking data. ‘This development towards monocultures creates many transportation kilometres. According to Eurostat data we transport more than 3 billion tonnes of agri-food products across Europe. The total distance of this transportation is 540 billion tonne-kilometres. These are data from 2017 and show the statistical distance between locations of production and place of consumption.’ He explains that the European Commission wants to reduce these distances. ‘One of our tools to do so is to pay more attention to small and medium size farms and the local orientation of short supply chains.’

When discussing what is needed to secure enough food production and have it done in a secure and climate and environmentally friendly way, Janusz Wojciechowski is very clear. ‘There appears to be some kind of a myth that for food security, also regarding quantity, we need to intensify production. This is not true if we analyse the statistical data, productivity calculated per hectare.’ He refers to Member States that have large scale farms, with farms having an average size of 80–90 hectares. ‘An example was the UK, which we can take because the data are from before Brexit. These data show that productivity from 1 hectare was less than €2 000. On the other side of the equation is Italy with an average size per farm of 11 hectares. There the productivity was more than €6 000 per hectare. It shows that there is no strict link between how big the farm is and how productive it is. Small farms can also be productive.’

This is why the Commissioner sees opportunities, particularly through the European Green Deal and the new CAP, for small and medium size family farms. ‘What we offer for them is organic farming. When it comes to scale, many small farms are not able to compete with large-scale farming in the conventional sense, often meaning massive production. But if we offer them support for organic farming, for less extensive farming, they have a chance to exist, to be competitive and to be more environmental and climate friendly. And also more animal friendly.’ He underlines that the latter is very important to him personally. ‘As ECA Member I was responsible for an audit about animal welfare. I think that the improvements in support for animal welfare and better animal welfare standards are especially a chance for small and medium size farms.’ He observes that his personal ambition and the Commission’s priorities are well aligned in the new CAP proposal. ‘To make our Common Agricultural Policy more friendly to small and medium size farms.’

The Commission has launched several measures in the past to stimulate improved environmental conditions, all captured under the term ‘greening the CAP.’ But Janusz Wojciechowski points out that a lot more is needed. ‘The greening was a good instrument as such but not efficient or effective enough. For the future, eco-schemes will be the main instrument to achieve the Green Deal goals in agriculture, under the first pillar. In our discussions in the trialogue it has not yet been decided what percentage of direct payments will be spent on the eco-schemes. There the question is whether it will be 20 %, 25 % or 30 % — something to be decided in these final negotiations.’

An honest broker in the public interest, going beyond agriculture

When discussing the role of the Commission in these trialogues, where the main differences are surfacing between the Parliament and the Council, the Commissioner is clear about his role in this. ‘The Commission’s role is that of an honest broker.’ He explains that the Commission is very active in the negotiation process. ‘Many times we proposed… we have been looking for compromise proposals, between the Parliament and the Council. Overall, the Parliament has a more interventionist approach towards the green transition, the Member States a bit less so. But generally I think that the final compromise will allow us to make our CAP more accommodating on the issues I referred to — environment, climate and animal welfare, as well as small and medium sized farmers.’

He underlines that this is also what the public expects: a more sustainable CAP. ‘And really, there is no choice! To go further down the path we have taken in the past — more and more intensive, more and more massive production…this is not a good way either for the resilience of the agriculture system.’ He explains that on the one hand big farms, organised as an industry, may say that they are economically effective. ‘But on the other side, they are not resilient enough. For example, the diseases; when they are affected by diseases, such as Asian influenza or swine fever, on big farms the scale of the losses is enormous.’

The Commissioner explains that there is another reason why the Commission wants to stimulate diversification, away from monocultures. ‘We also need to ensure food security, in crisis situations. Big farms tend to depend more on computer systems. Of course, such innovation, this technology, is all very important. But there is also an increased risk of cyberattacks. We also need to ensure our food security by means of a system of small farms, which are less dependent on technologies as a whole and are also less vulnerable to large -scale cyberattacks.’

Another policy instruments that could help these small and medium farms is capping the EU support farms can get. The Commissioner points out that capping was included in the initial Commission proposal and is a politically sensitive issue because of different situations across the EU. ‘Member States with many large scale farms are under pressure not to have any mandatory capping. The European Council decided that capping would be voluntary for the Member States. But the next instrument related to that is redistributive payments which can play an effective role in transferring more support towards small farmers and reducing a bit the payments for big farmers, thereby reducing the gap. In the end this is a political choice. So it was in the Commission’s original proposal.’

For Janusz Wojciechowski capping may come back in the National Strategic Plans to be submitted by the Member States. ‘I hope that a majority of them will use capping as a method to achieve a fairer common agriculture policy, creating better possibilities for small farms to exist. Capping and redistributive payments are important instruments for that. Speaking of small farms, I refer to the report I presented when I was ECA Member.

This report [special report 10/2017] related to young farmers, I think a first one on this topic.’ He vividly recalls the numbers presented in the report. ‘They were impressive: during one decade after EU enlargement, we lost 4 million small farms. This meant one thousand per day. I remember that when I presented these figures in the ECA’s audit chamber responsible for this audit, the European Parliament’s committee on agriculture, or in Member States, it was a kind of shock.’ The Commissioner considers that this report was very helpful to re-orientate more of the CAP instruments towards small and medium farmers.

National Strategic Plans to be underpinned by solid data

When discussing whether the new CAP can ensure a level playing field within the EU regarding agricultural subsidies, the Commissioner indicates that the National Strategic Plans are crucial in doing so, building on reliable data. ‘The differences between the Member States will be a challenge for the reform of the CAP, especially when we approve the National Strategic Plans. It is very important to take into account different starting points. We also mention this in the recommendations we sent to the Member States a few months ago.’

Regarding data, the Commissioner underlines that the CAP reform is strictly based on the analysis of data. ‘For example, in our recommendations to the Member States we analyse in detail the situation in individual Member States. These data are most interesting information. For example, how do you reduce greenhouse gas emissions from agriculture? Agriculture is responsible for 11 % of greenhouse gas emissions. But there are big differences between Member States. The EU average is 2.5 tonnes per hectare, but in some Member States it is 1.5, and there are Member States with more than 10 tonnes.’ When asked for an example of the latter, Janusz Wojciechowski mentions the Netherlands. ‘This is the Member State with the highest level of emissions, probably because there is a very productive agricultural sector in the Netherlands. You have to realise that it has 1 % of agriculture land and 6 % of EU agriculture production!’

The Commissioner underlines that the Commission will use these data. ‘Every discussion about the reform is based on data evidence. For example, if we discuss the redistribution payments. We presented this during the negotiation process: 10 % redistributive payment means in practice 7 % more payment for those farmers with less than 10 hectares and 5 % less payment for farms bigger than 1 000 hectares. We always used the data and, in line with President von der Leyen’s promise, we will continue our work based on data evidence. This is an absolutely fundamental practice in the CAP, working on the basis of concrete data is essential.’

He underlines that it not only important to have the data but also to analyse them, also in relation to having a level playing field in the Union. ‘For example, take fertilisers. The common opinion is that if we reduce the use of fertilisers in agriculture, the automatic consequence is reduced production. Recently we analysed the data from two Member States — Germany reduced use of fertilisers during the 7-year period 2010–2017 from 150 kg/hectare to 125 kg/hectare and at the same time crop production increased by 4 %. Less fertilisers — more production. Maybe a better example — Finland: reduction of fertilisers from 122 kg/hectare to 88 kg/hectare, at the same time the productivity, the gross production, increased by 8 %. These data feed into the argument that there is not a simple linear relation between use of fertilisers and productivity; there are many other factors.’

Another challenge he finds is to communicate about these findings, reaching the farmers who have to implement the new CAP. ‘It is important, but also difficult, to communicate with farmers. Because of the COVID-19 restrictions there was no, and there still is no, possibility of full and direct contact with farmers.’ He adds that the Commission also uses social media means to communicate with farmers. ‘It is very helpful to present some data and explanations of why we are reforming our agriculture policy, the consequence of these reforms, etc. It is important to convince people, also farmers, of the new ways forward.’

Transparency as a weapon to combat misuse of CAP funds and fraud

Data also means financial data, and besides an efficient agricultural sector, in various dimensions, there are also expectations about compliance when it comes to the rules. Janusz Wojciechowski, also in his capacity as a former ECA Member actively involved in agricultural expenditure, is well aware of this concern. ‘The CAP has sometimes been criticised for risks of misuse, fraud, corruption, conflicts of interest. There were and sometimes still are some problems in some Member States, but in general, also according to the ECA’s reports, the situation has improved substantially.’ He refers to improved management of the CAP and the error rate, which he considers a very important indicator, being reduced from 2.4 % to less than 2 % in 2019. ‘So below the material threshold, this is a good tendency.’

Regarding these risks the Commissioner believes that transparency, both at EU level and Member State level, is the best instrument to reduce the risk of misuse and fraud. ‘The process of approval of the strategic plans will be fully transparent from the Commission’s side and we will also be transparent in our controlling activities; my personal approach will also be that all programmes should be based on transparent criteria.’ He underlines that for this the information in these programmes will be essential. ‘Criteria on who can be a beneficiary! Generally my idea is also that we need to expand the number of beneficiaries, especially in the second pillar.’ Here he also sees a link with small and medium size farms. ‘In the past we observed that there were several programmes for which the criteria eliminated small and medium size famers and only a small group of the potential beneficiaries remained who were able to fulfil these criteria.’

He expects that this approach will be easier to apply under the second pillar of the CAP. ‘Under the second pillar there will be more applicants, we hope, than can be approved and greater discretion about who to provide the funds to.’ This will be applied with utmost transparency: ‘We have the instruments in the Financial Regulation — Articles 60 and 61 — and they provide legal instruments to prevent the risk of conflicts of interest. We need to pay more attention to this and it will be done.’ He considers this to be a question for the agenda during discussions about the National Strategic Plans. ‘For me personally this is very important, and also in line with ECA recommendations.’

A delivery model aiming for more synergies

As to the next steps, after the negotiations have been finalised, the Commission will focus on the details of the new delivery model. ‘The practical implementation of reform will first be visible in the National Strategic Plans. The legislation is the base, then, of course the strategic plans and also their transparency. For me, as a former auditor, the new delivery model makes a lot of sense. We proposed a model with synergies between the different control systems: the Member States pay agencies, they have certifying bodies, they check the farmers. The European Commission pays the Member States, controls and audits performance by Member States. And the ECA assesses the performance of the European Commission.’ He sees this last aspect as crucial, not only from an accountability point of view. ‘From the ECA perspective it is sometimes easier to see the problems which are not visible from inside the Commission. But the model of the control system is clear, avoiding the overlap we have seen in the current CAP.’

For the Commissioner the new delivery model should not only improve synergy between the different actors in the CAP but also with other policy areas. ‘I personally pay a lot of attention to this issue in each official statement by the Commission. We need to have a common agriculture policy which is not only one policy for agriculture, for the rural areas. We also need to use other funds, all possible funds, especially for the rural areas.’ In this context he refers to Article 174 of the Treaty, saying that rural areas should be a priority in cohesion policy, because it is about cohesion policy. ‘In practice, there are some problems with the full implementation of this article. We need coherence and synergy between policies, even more important with the Next Generation EU initiative.’

Again the Commissioner comes up with a concrete example: ‘We have a very ambitious target to increase organic farming, this is one of the main tasks handed to me in the mission letter from President von der Leyen. The Organic Action Plan is there. Now we are cooperating with the Member States to prepare the organic action plan at the level of the individual Member States. But this requires synergy between policies. Generally, from the CAP funds, we will support development of organic farming from the Next Generation EU funds. This is a good opportunity to expand the processing industry for organic farm products, which is very important for the whole system.’ He mentions synergy with the cohesion funds. ‘From those funds we can support and organise the market for consumption, so support priorities, for example through public procurement — embedding preference for organic products in the public procurement system.’

Janus Wojciechowski finds these synergies between different funds crucial to achieving the general target, which is the 25 % for organic farming. ‘The Next Generation EU will be especially important for linking agriculture to the processing industry. We need to increase processing industries, public demand, consumption of organic food, etc. One of the problems we have in the EU — and now I come back to the topic of small and medium size farms — is the barrier not only to the development but sometimes the mere existence of these farms in relation to the processing industry. The current concentration in the processing industry creates this phenomenon — that the big processing companies are not interested in buying products from small farmers. They need big suppliers. Now the challenge is to support, maybe to re-build local, small processing companies which buy locally from smaller farms.’

Counting on the ECA’s advice

To make the new CAP a success, the Commissioner is also counting on the help and advice of the ECA. ‘The ECA has increasingly been focusing on performance. With the new CAP moving more from compliance to performance, there will be plenty of opportunities for the ECA to audit the implementation of the new delivery model. And for the Commission to learn from this.’ He underlines that the ECA has a role to play in making the new CAP a success: ‘In its role as an independent auditor producing recommendations that are timely and constructive!’

He hopes and expects that in the context of the new CAP the ECA will pay greater attention to the Member States’ choices when implementing the CAP. ‘I see the ECA and also the Commission as allies in preserving the level playing field for agriculture in the EU, and guaranteeing strong common action at EU level to achieve the ambition of the EU Green Deal. ‘He points out that one needs to be aware that the new CAP will require some time for learning and adaptation for many actors involved — Commission, Member States, paying agencies, farmers, NGOs, consumers, etc. ‘It is important that the ECA takes into account this challenge and helps us in this transition. I think it is the first time that we have such a big reform aimed at making our agricultural system more friendly for the environment , for the climate, for animal welfare, while at the same time also more friendly for farmers. The latter is important because without the farmers we can do nothing.’

Many targets, many challenges, time to move on

Looking forward the Commissioner has high hopes that the negotiations will be finished in time but also shares some concerns. ‘We achieved a compromise on the new delivery model and I was happy that the new control system was generally approved by the European Parliament and the Member States. However, an important risk factor I see is the level of ambition in the green architecture.’ His concerns relate for instance to the targets of this green architecture. ‘Concerns are that the targets in this architecture are too ambitious and that they need to be more realistic. The question is: what is this realistic level — what needs to be done and what can be done? This is the main risk factor.’

The Commissioner for Agriculture is optimistic that the negotiations will soon be closed. ‘We are very close to the final agreement. Also because people realise we have no time to discuss about the legal basis for too long. Now we need to start debate about the National Strategic Plans. The entire agricultural policy will be described through each of these single strategic plans for each Member State, which may relate then to what is feasible at regional level. He makes clear that these National Strategic Plans will be the next starting points for discussions, probably also difficult discussions.‘ I am fully aware of the potential risks in these discussions with the Member States. All the more reason to start this process as quickly as possible, soon after the agreement on the new CAP, starting the next phase towards the EU’s transition, also in agriculture.’

This article was first published on the 2/2021 issue of the ECA Journal. The contents of the interviews and the articles are the sole responsibility of the interviewees and authors and do not necessarily reflect the opinion of the European Court of Auditors.



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