Green crops growing in a sunny field with clouds in the background.

What will really change in the CAP in 2023?

As the European Commission reviews the remaining few national CAP Strategic Plans, putting the final touches to this CAP makeover, let’s take stock of three key changes to the EU’s oldest policy. 

The flashy green novelty: “eco-schemes” 

Recognising the need to “green” the Common Agricultural Policy (CAP), the Commission proposed a new measure: eco-schemes. “Eco-schemes” are a yearly subsidy rewarding any kind of environmentally- or animal welfare-friendly practice (beyond what’s already mandatory). For instance, this could be a large strip of wildflowers on the edge of fields or using zero pesticides. 

In the past years, these mysterious eco-schemes have underpinned grand claims of a “greenest ever” CAP; although we are only now getting to see what these subsidies will actually be paying farmers for. And unfortunately, what’s in the tin isn’t that green. A joint report we published last year with BirdLife and WWF assessing 160 draft eco-schemes found that very few (19%) were likely to deliver on their stated aim, with the remainder lacking ambition, funding, and/or adequate safeguards to make any real environmental difference.  

In recent months, we have been assessing the final plans submitted to (and in some cases approved by) the Commission. We found some improvements in the environmental and climate ambition of CAP Plans, but systematic issues remain which undermine the overall green impact of the CAP. More on this at our report launch event on 7 December 2022.  

The shifting plates novelty: “renationalisation” 

CAP rules and budget allocations used to be fully decided at EU level, with Member States (MS) merely shaping the detailed implementation. The new CAP radically breaks with this, as it is based on a “new delivery model” whereby MS are tasked with “strategically planning” their CAP measures based on an assessment and the prioritisation of their needs against key social, environmental, and economic objectives. What was decided at EU level in June 2021 was a mere overarching framework; the important decisions have been taken at national level since.  

This gave  EU countries the power to use this new flexibility for good, or not. Regrettably, by and large, we have seen that they have chosen to keep things as close to the status quo as possible. So in practice, very little changes.

Yet, this new power structure was hugely relevant, as it meant that the Commission essentially tied its own hands when it came to implementing its flagship agriculture-related Green Deal commitments through the CAP. Countries were lukewarm, to say the least, towards the Farm to Fork strategy (F2F) from the start, and staunchly opposed its integration into the CAP regulation, giving the Commission no legal basis to force them to up their game on cutting emissions or pesticides use – for example.  

The mislabelled novelty: “performance” 

Another proclaimed change to this new CAP was a supposed move from “compliance” to “performance”. However, this claim must be taken with caution. Overwhelmingly, farmers will continue to get subsidies for complying with certain rules, not for delivering specific results. Agricultural Ministries will continue to get EU funding for their share of the CAP every year without real requirements to implement concrete improvements. They will, however, need to report on the uptake of measures against a range of indicators linked to the CAP’s ten economic, environmental, and social objectives. It is primarily on this basis that the Commission is laying its claims for a new “performance orientation”. Yet, uptake of measures can hardly be equated with “performance”.   

This change will nevertheless impact the agencies in charge of the administration of CAP payments, the “Paying Agencies”. Underpinning the new delivery model is a fundamental change in how the CAP is administered: moving from the manual control of farm subsidy applications and randomised “on-the-spot” checks on 5% of farms, to the digital and (semi-)automatised management of applications and continuous controls of 100% of farms through a new “Area Monitoring System” (AMS). Paying Agencies will no longer report only on how much is spent, but also on which indicators the money is contributing to.  

This administrative transformation should not be underestimated. While we cannot, in our view, talk of performance yet, this may provide the foundations for a real move to performance in future.  

For now, the link between the indicators used (measuring uptake, e.g. the number of farms taking part in an eco-scheme on climate) and actual “impacts” (e.g. GHG emissions reductions) is extremely weak. But promising developments in agri-environmental ICT research point to what the future might hold. 

Modernising the CAP’s administration system for better performance 

Over the past 3.5 years, the EEB has been a partner in the Horizon 2020 NIVA project, bringing together Paying Agencies, research institutes, ICT companies, farmers and civil society around the aim of modernising the CAP’s administrative system for controls and monitoring. Through nine Use-Cases, partners sought to harness new satellite data from the EU’s Copernicus programme and other technologies and build powerful algorithms to simplify and improve the CAP’s administrative systems.   

For example, through the analysis of satellite imagery, partners developed an automatic traffic light system which indicates whether farmers are implementing what they committed to. Where the system cannot draw conclusions, parcels show as orange and the Paying Agency contacts the farmer for further information – which could for example be provided through a geo-tagged photo of the area in question. Such solutions hold great potential for reducing the administrative burden on both sides in the long-term, ensuring better compliance, and also avoiding unfair penalties. In the current system, most farmers were never – or very rarely – controlled, which evaluation studies have found contributed to poor compliance, and consequently, poor environmental results.   

The Use Case which held the biggest environmental promise, however, was one led by French Research Institute INRAE and the French Paying Agency on the development of methodologies to calculate real environmental impacts on three agro-environmental indicators: nitrates leaching, biodiversity conservation, and carbon budgets. For accurate values on these indicators, satellite data is combined with information on both the context (soil type, climate conditions, etc.) and the land management practices (e.g. amount and type of fertiliser or pesticides used) in a given parcel.   

For now, pretty much all eco-schemes are “practice-based”: farmers commit to applying certain practices, specified by public authorities. This gives them some certainty: if they follow the rules, they will get money, but it also limits their agency and may not provide the best environmental results. Pilots of result-based biodiversity schemes in England and Romania gave promising results a few years ago. But such schemes are still the exception rather than the rule due to the complexity and cost of monitoring. Projects such as NIVA provide hope for the upscaling of (at least partially) result-based schemes in the future.   

Will data enable greener policies? 

Solutions like those outlined above won’t solve the huge and complex environmental and other challenges facing European agriculture. But they can provide a piece of the puzzle.  

Technical solutions will remove feasibility barriers, but this won’t change anything unless there is also the political will to fundamentally change what the CAP is about and how this vast budget of public money is spent.   

Many practical and ethical questions also remain around the use of data in agriculture. Who owns the data? What can it be used for? A major barrier that constantly comes up in discussions on this topic is the lack of data on farm practices. For instance, most farmers are not currently required to report on their fertiliser or pesticide use. But shouldn’t such basic data sharing be mandatory, at the very least for farmers receiving public subsidies?   

Finally, an old mantra of CAP reforms is “simplification”, often used by agricultural policy-makers to imply deregulation, but also referring to reducing the administrative burden of the CAP. There is an inherent trade-off between simplicity and performance. Allocating public spending where it is needed most and solving specific problems requires a certain level of complexity. But in the “grand new age of data” hailed by many, and as shown by NIVA, a lot of this complexity can be dealt with by computers.  

So, perhaps, as we start looking to what the future of the CAP may hold, we should leave simplification behind and embrace the possibilities of new technologies to develop really complex but well targeted policies, which make wise use of taxpayers’ money. 

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