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momagri, movement for a world agricultural organization, is a think tank chaired by Christian Pèes.
It brings together, managers from the agricultural world and important people from external perspectives,
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of agricultural markets by creating new evaluation tools, such as economic models and indicators,
and by drawing up proposals for an agricultural and international food policy.
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2014 CAP: The new aid architecture is becoming clearer



by Frédéric Hénin,


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If the budget is extended for the 2014/2020 years, the CAP reform will revamp granting and calculation methods for direct aid. These will result from several mechanisms to be applied according to production systems and location.

The 2014 CAP is mostly discussed with a budget and financial envelope approach. But in practice, what will be the amounts of direct aid paid to farmers in the years 2014 to 2020? While it is not possible to provide calculation rules, we are starting to learn about their new architecture. It will be guided both by the convergence of European and national aid schemes, and by new allocation rules set by the CAP reform (including greening, young farmers and disadvantaged areas). But this new architecture is based on a budget renewed in constant euros for the years from 2014 to 2020; otherwise the European Commission will have to come up with another text. But the Commission did not wait for the European Parliament’s release of the October 2011 amended legislative proposal to improve its contents by including the remarks that were made.


Convergence of national and European aid

According to the legislative proposal, the convergence of incentives will be conducted both at the European level and in each member state. As far as France is concerned, this would not be the biggest challenge, since the per-hectare aid is close to the European average. By contrast, convergence at the national level will be harder to achieve, as gaps between farms and regions are extremely significant.
Professional representatives feel that the 2019 deadline is too short and that the steps to be taken are too broad. Indeed, the cutbacks should apply to 40 percent of incentives, as early as the first year of the implementation of the CAP reform.
The European Parliament is proposing a staggered national convergence up to 2029. But regardless of the deadlines used, this convergence means that farmers would receive direct aid reviewed annually.

However, the idea of single direct rights would be abandoned and preference would be given to a fair and homogenous convergence. Homogeneous because it would be linked to identical criteria at the national level, and fair because the amounts of rights would be linked to the agricultural specifics of a given geological and agronomical region in a national territory.

“All eligible hectares will benefit from direct basic payments, but I do not see the logic of giving them to anyone,” explained European Commissioner Dacian Ciolos to the French Association of Agricultural Journalists on October 19, 2012. The beneficiaries of upcoming direct payments will be active farmers. But the higher their SPS, the greater the loss of earnings will be when they receive direct aid.


Several additional types of aid

Yet, each farmer should individually receive additional aid due to:
    1. Greening: A compulsory aid that will be based on 30 percent of the CAP first-pillar envelope, and not on 30 percent of the SPSs currently paid. This greening is to be based on three key measures designed at the European level. Thanks to a system of equivalence, adhering to second-pillar programs will automatically grant such greening benefits.

    2. Disadvantaged areas: Additional direct aid will be provided to farmers in disadvantaged areas, in addition to being linked to the second pillar. In its legislative proposal, the Commission allocated such aid in an amount up to five percent of first pillar support.

    3. Recoupling: This is where livestock farming could also get support. In addition to direct payments linked to farmand, breeders could receive coupled payments, such as the PMTVA (premium for maintaining meat cattle farming) for suckler-cows farmers. The CAP reform is not excluding the recoupling application to other animal farming activities. In its legislative proposal, the Commission plans for recoupling aid at 10 percent of the budgetary envelope, but states could justify overruns to include their specificities.

    4. Installation: Newly established farmers could benefit from higher direct rights (a 25 percent increase was mentioned in October 2011).

Incentives according to each farmer’s situation

In all, close to half of the envelope earmarked to first-pillar incentives will finance these four specific measures, envelope that is currently used for SPSs and coupled aid. But each farmer will get incentives according to his/her situation. For example, a grain farmer without livestock located in a plain area will get higher payments due to greening, if he diversifies his crops and if the ecological interest of his land reaches seven percent.
In the case of mountain areas, a young farmer will be able to combine direct payments, the greening supplement, increases related to his young farmer status and geographical location (disadvantaged areas). According to the European Commission, such combined incentives would mitigate income discrepancies with grain farmers’ incomes. And second-pillar payments will be added to this new aid architecture.


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Paris, 19 December 2018