Simplification as a top priority in 2015
Allan Matthews, CAP Reform (Blog)
The Irishman Phil Hogan took up his new functions as Commissioner for Agriculture in October. Among the issues he has to tackle is the simplification of the CAP, a trend described by Allan Matthews in one of his recent articles (extract here1), as 2015’s “buzz word”.
Yet simplifying the CAP does not necessarily imply giving it meaning, on the contrary. This ambiguous term could be a pretext for the decoupling of aid and the pursuit of the dismantling process of the policy for protection and support. Because as Matthews explains, there are two kinds of simplification: technical and political. If legal and administrative clarification is a significant step, measures for policy simplification can instead further expose farmers to climatic and market hazards by removing crucial regulatory instruments.
The EU's potential for agricultural power is being worn away and it is increasingly more urgent to provide it with a policy for revitalization. Mid-term CAP reform should above all recognize the need for a strategic ambition adapted to the realities of agriculture and geo-economics. This is the essence of the proposition put forward by momagri to the European authorities and the French government 2.
Momagri Editorial Board
The heading of this post is taken from the title of the speech delivered by the Commissioner for Agriculture and Rural Development Phil Hogan when addressing the EP COMAGRI on 3 December last. It follows his commitment in his confirmation hearings to a simplification and subsidiarity strategy for the CAP. It seems simplification will be a big buzz word in CAP discussions in 2015. But what can we expect from this initiative, and how important is it likely to be in practice?
What does simplification involve?
The LEI study provides a useful definition of simplification. It defines it as:
“a reduction of administrative burden (e.g. complexity, time needed for administration) for farmers and other beneficiaries; a reduction of implementation costs for national authorities/paying agencies, which covers costs for implementation, control, monitoring and evaluation; and a simplification of the work of the European Commission (Rosa and Selnes, 2012).”
The 2005 Commission Communication on Simplification and Better Regulation for the Common Agricultural Policy introduced a distinction between technical and policy simplification.
Technical simplification (i.e. within a constant policy framework) implies revision of the legal framework, administrative procedures and management mechanisms to achieve streamlining and greater cost-effectiveness and attain existing policy objectives more effectively, without changing the underlying policies. Examples include revising a legal document to make it clearer, streamlining administrative procedures, or simplifying forms by reducing requests for detailed information in applications. Other examples might be reduced reporting or monitoring requirements.
Political simplification is about changing underlying policies in ways which make them simpler. This can occur through the abolition of rules and schemes (e.g. abolition of the Energy Crops Scheme in Health Check saved national administrations €61 million according to the 2009 Stoiber Group report; another example would be the elimination of production quotas in dairy and sugar which does away with the need for complex legislation to control supply). It might also occur by exempting certain beneficiaries from obligations under particular schemes (as in the exemptions of small farmers from greening requirements and reduction in cross-compliance obligations, or reducing the list of products for which an import and (or) an export licence is required.
Why simplification is not simple
It is a truism, repeated by the Commissioner, that simplification is anything but simple. This is the case for a number of reasons. One is that there are various stakeholders involved, and what may be a simplification for one can imply additional burdens for others. For example, it may make life simpler for the Commission if there is a single, uniform scheme across the 28 EU member states, without exceptions and without flexibilities. But this does not necessarily mean a lower administrative burden for national administrations or farmers – the initial proposal to abolish the SAPS scheme in 2014 is a case in point.
The Commissioner’s plan is, intriguingly, called a simplification and subsidiarity strategy (my italics), suggesting that he sees giving member states greater flexibility in implementing the CAP as a route to lower administrative burdens. Indeed, allowing member states and farmers flexibility to find the most appropriate way to achieve given targets and objectives can lead to simpler and less burdensome regulations, because they are not imposed from outside without regard to local needs and circumstances. But they may also make it more difficult for the Commission to monitor their effectiveness (as the hostile reaction from the environmental NGOs to the proposal that member states could substitute equivalent schemes for the three greening obligations seemed to suggest).
Good policies should be targeted policies. However, more targeted policies despite their better outcomes often have higher administrative costs as a result of implementing more complex policy designs. Armsworth and colleagues, in a 2012 paper entitled The cost of policy simplification in conservation incentive programs noted that the overall biodiversity benefits (in this paper, measured as the density and species richness of the bird population) of more complex policies were potentially so great that they could justify additional administrative costs of up to 70% of the payments that would otherwise be given to farmers. Does simplification make sense in that context?
The Commissioner’s agenda would seem to extend to policy simplification as well as technical simplification, particularly in the case of the new system of direct payments. Although he was careful to state that any changes should “not re-open the basic policy decisions of the 2013 reform in this area”, it seems inevitable that policy simplification will be associated with at least a perceived shift in policy focus. This is more likely given that sufficient time will not have elapsed to assemble enough evidence on what is working and what is not.
Depending on the ambition of the proposals when they see the light of day, we may well see a re-run of some of the battles started in the debate on the 2013 reform, particularly between those seeking to maximise the opportunities for production and those concerned with reinforcing the idea that direct payments should be directed to the production of public goods.
Overall, a careful reading of the commitments suggests that what we can expect by the end of this year is a new version of the DG AGRI rolling simplification action plan, with perhaps a few specific legislative initiatives where work is well advanced.
1 The full article is available from http://capreform.eu/simplification-as-a-top-priority-in-2015/
2 Indeed, the think tank momagri has forwarded to European policy and agricultural decision makers a proposal that seeks to give a new strategic course to the CAP by 2020