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Towards a greener and fairer CAP

Can agriculture get in line with actions to combat climate change? Source: European Commission. Source: EC AV PORTAL (europa.eu)

The European Green Deal is the biggest EU project to tackle the twin crises of climate change and biodiversity loss. All economic sectors play a role in the transition. Being one of the major drivers of biodiversity loss and contributing 10 % of greenhouse gas emissions, agriculture is a crucial component in the achievement of the targets set out in this Green Deal. In May 2020 the Commission launched its Farm to Fork strategy (F2F) and Biodiversity strategy, including a concrete action plan. Lukas Visek is a member of the cabinet of the Commission’s Executive Vice-President responsible for these plans, Frans Timmermans, and he is working in particular on the Farm to Fork strategy and the Greening of the Common Agriculture Policy (CAP). Below he sets out his perspective on the why and the how of realising a transition to sustainable agriculture.

By Lukas Visek, cabinet of Executive Vice-President Frans Timmermans at the European Commission

Climate change is pushing us beyond our limits already

300 years ago, several citizens in Salem, Massachusetts, started showing erratic behaviour. Convulsions, delusions, and other unusual physical and mental symptoms. It is believed that these symptoms — witnessed especially in women and young girls — led to the execution of 19 inhabitants during the Salem witch trials, a majority of them female. Several more perished in prison.

Since 1976, historians have been debating the cause of this behaviour, after Linnda Caporael published a paper arguing that it was in fact prompted by ergotism. This is a disease caused by a fungus, Claviceps purpurea, which occurs in rye. The fungus contains similar chemicals to LSD, and is known to cause the exact symptoms witnessed.

While we may never know for sure what caused the Salem witch trials, we do know that we have managed to keep the spread of Claviceps purpurea under control. Science and technology have helped protect us, and — with exceptions — avoid outbreaks of ergotism among humans in modern times. And yet, this very fungus is now more prevalent than in recent history, and at higher levels too. This is a direct result of changes in agricultural practices. It is also a result of climate change which has been altering the geographic range as well as the vectors of the spread. Humanity has been slowly but surely pushing the Earth past its limits, and we may have already passed several tipping points.

We are now running out of technological, scientific, and management options and knowledge to keep the spread of this dangerous fungus completely under control. In the face of that reality, the only remaining immediate solution has been put in place: regulate maximum levels for the presence of this fungus in cereals. Which is what the European Commission has done to protect public health as well as the health of animals who are fed with crops in which this fungus lives.

For the time being, these measures will manage to prevent the spread of ergotism. For farmers, however, they add a new constraint. This constraint is not driven by policies, but it is a direct result of climate change and the need to protect human health against the effects of it. The re-emergence of this fungus is one clear example of why we need to support European farmers in adopting more sustainable farming practices and adapting to climate change. And it is also a clear example of how costly climate change can become for farmers, if farming practices do not become more sustainable.

CAP has delivered on quantities but not on quality of production methods

For decades, the Common Agricultural Policy (CAP) has been the key instrument in shaping the EU’s agricultural sector, farmers’ livelihoods, European landscapes, as well as our diets. When created more than 60 years ago, it aimed to tackle three key things:

  • preventing another period of hunger in Europe. While poverty still causes far too many people to go hungry in the European Union, food itself is abundant. The EU has become the biggest exporter (and importer) of food. European food is the hallmark of safety and quality. In fact, food has become so abundant that we, Europeans, throw around 20 % of it away, which is another problem we need to tackle if we are to live within the boundaries set by our planet;
  • making food available at affordable prices. Many Europeans have a — justified — impression that food is becoming more and more expensive, but the share of a household’s expenditure on food has actually not changed much over the past ten years. In fact, it has gone down, albeit very marginally. About 13 % of European households’ expenditure goes on food, with food occupying the third place after housing and transport. What’s more, one in five deaths is attributed to unhealthy diets. The European Commission’s Farm to Fork Strategy and the ‘EU Beats Cancer Plan’ try to make the healthy and sustainable choice the easy choice. To date, the easy choice is typically highly processed food, which has both a negative health and environmental impact;
  • thirdly, one aim of the CAP was to secure decent incomes and livelihoods for farmers, also with a view to maintaining a decent quality of life in rural areas. This is the area where the CAP has perhaps failed most so far. A failure that is even more remarkable considering the overall global leadership and extremely high competitiveness of the EU food sector.

In the CAP, the present system of direct payments consumes three quarters of the CAP budget. So the main source of blanket income support for farmers accounts for about one quarter of the total EU budget. Most of these payments are now decoupled from production. Unfortunately, they are also to a large extent decoupled from production methods.

In other words, farmers are not motivated or encouraged by these payments to opt for more sustainable methods, they just need to make sure that they do not break the rules. Conversely, farmers’ extra efforts to use more environment and climate friendly farming practices receive no recognition in the income support they receive. Many farmers will still do more than is asked but they do so at their own expense.

Eco-schemes — why more land should matter less

Back in 2018, the Commission proposed allocating a part of the direct payments to a new tool called eco-schemes. This is a financial reward for farmers for employing practices which are beneficial for the climate and for the environment. The concept is familiar to farmers and administrations from the CAP’s second pillar, in the form of climate and environment commitments where farmers commit to predefined farming protocols and are compensated for any additional cost and income loss stemming from these practices. The huge advantage of eco-schemes is that they will be made available on a large scale to more than 7 million farmers across the EU. The other huge advantage is the budget the eco-schemes will come with. At the time of writing this article, the final outcome of the negotiations on the new common agricultural policy was still to be formally confirmed but, provisionally, Council and the European Parliament have agreed to dedicate about a quarter of the direct payment budget to eco-schemes.

This new tool offers a lot of possibilities to fix things. First of all, it enables a roll out of sustainable practices on a large scale. For example, farmers will have an incentive to dedicate 7 % of the arable land on their farm to biodiversity, with no production and — obviously — with no chemicals (without the eco-scheme incentive, at least 3 % must be non-productive areas). This should (re-)create the natural infrastructure for biodiversity to thrive. As many studies show, having more biodiversity is ultimately beneficial for farmers and their productivity as well, and farmers need to receive the right expert guidance to make the best out of it. Another example is precision farming, whether it takes the form of integrated pest management or specific practices which use pesticides and fertilisers only where and when needed. Again, this saves farmers money on inputs and it is good for biodiversity.

Secondly, eco-schemes partly fix the problem of fairness of direct payments. On average, 80% of direct payments from the CAP go to only 20 % of beneficiaries. It is no secret that these beneficiaries are not always farmers: the system of direct payments is actually linked to land, not to farming. So the more land you own, the more direct payment you receive. Next to being unfair, this system creates all kinds of other problems. Young farmers and any new farmer just starting out, for that matter, struggle to get access to land. While eco-schemes will not fix this entirely, they will help, as it will be possible (and even desirable) to stack up eco-schemes. In other words, farmers will be able to get a multiple reward for the same area for doing different things. This will make the quantity of owned and farmed land matter less, and the quality of farming matter more.

In a similar vein, eco-schemes can also partly fix the old injustice where two neighbouring farmers could receive a completely different direct payment because of some historical records. Eco-schemes will be up for grabs for those who want to do more for the environment and for the climate.

Towards a CAP that rewards taking care of resources instead of merely using them

This new approach, where performance (and ultimately results) will be valued and rewarded, takes the CAP out of its traditional pattern. The European Court of Auditors itself was very clear on this in its recent special report: spending CAP money on climate according to the rules did not mean that these funds actually delivered any added value for climate — or biodiversity, as the ECA reported last year.

The coming shift towards performance is therefore crucial as it is clear that we will also need to produce more food to feed 10 billion people. This cannot be done at the expense of the planet and at the expense of the natural resources farmers need to produce that food. It is fairly obvious that the trends in land degradation, water scarcity and pollinators will hit rock bottom eventually, unless we change our approach dramatically and urgently.

In the end, Europe’s farmers have always been so much more than mere beneficiaries of the CAP’s income support. This is why they need a CAP that will genuinely reward them for taking care of the environment, mitigating greenhouse gas emissions, and storing carbon. Not only will this improve their incomes, it will also make them more resilient in the face of the climate and biodiversity crises. Humanity and in particular farmers have been defeating diseases and pests since agriculture started. Now we have to make sure we defeat the crises that threaten our very existence. Our food security and our futures depend on it.

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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The ECA Journal features articles on a variety of current audit topics, the ECA’s role and work. It is available in electronic form below, and paper copies can be ordered online at the EU Bookshop.

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