Outlook: Post-2021 Common Agricultural Policy: Towards further delays in the reform process?

At the end of October, the European Commission published the draft rules to extend the current Common Agricultural Policy (CAP) for the 2014-2020 period to the year 2021.

If the one-year transition gets approved by co-legislators, the EU's next farming policy will only be implemented in January 2022 instead of 2021, as was foreseen under the Commission's original reform proposals. This means we now have to speak about the post-2021 CAP reform instead of post-2020. By proposing the transition period, the EU executive formally recognised that the legal acts underpinning the new farming policies were not going to be adopted by January 2020. However, it had already become clear long before that temporary arrangements would be needed to avoid disruptions in the policy support to farmers in 2021, given the continued delays in the negotiations in both the Council and the European Parliament.

MEPs avoided complete re-start

The discussions in the European Parliament were not being helped by a change of office. After intense and prolonged negotiations, the members of the Parliament's Agriculture Committee (AGRI) voted their first positions on the Commission's CAP reform proposals at the beginning of April. They managed to agree on a large number of amendments to the three key Regulations for the Strategic Plans, the Single Common Market Organisation and the policy's Horizontal aspects. But as the MEPs needed a long time to finalise these changes and postponed key deadlines, the files could not be put before the plenary before the European elections on May 23-26 and become the Parliament's first common position on the policy reform.

This was problematic because in principle, all legislative work that only reaches the Committee stage expires at the start of a new legislature, which took place on July 2. In September, the newly elected AGRI members eventually asked the Parliament's leadership to maintain the positions prepared by their predecessors and forward them directly to the full plenary. One month later, the Conference of Presidents - consisting of the President of the European Parliament and the leaders of the political groups - approved this request and thereby avoided a complete re-start of the internal negotiation process.

The parliamentarians nevertheless agreed to re-open a limited number of key articles, mostly under the Strategic Plans legislation, in order to accommodate the views of new members in the Agriculture and Environment Committees, which have shared competence over the file. Former Agriculture Commissioner Phil Hogan had strongly encouraged the MEPs to build on these previous positions, as the severe delays in the discussions had been frustrating him and his cabinet. The full Parliament is now expected to consider the three files in early 2020, most likely in January or February, with hopes of a plenary vote by June 2020 before entering into trilogues next summer.

Council talks blocked by budget and Brexit

At the Council, the rotating Presidency of Romania (January - June 2019) had made it its key priority to reach a joint position on the future CAP by the end of its term, but failed in this endeavour due to continuing disagreements between the member states on key elements of the reform package. The following Finnish Presidency (JulyDecember 2019) was much more careful in its ambitions, aiming to make "as much progress as possible" in the negotiations and reach a 'general approach' by the end of the year "if the situation allows it". However, this outcome was never likely to happen, as a majority of national agriculture ministers explicitly tied their decision on the next CAP to the funding for the policy.

For tactical and strategic reasons, the member states refuse to adopt a common position on the CAP until there is clarity on the next EU budget for 2021-27. But national leaders in the European Council did not manage to agree on the Multi-Annual Financial Framework (MFF) for 2021-27 yet, despite the Commission's insistence to strike a deal on the bloc's finances by the end of the year. The budget talks have been strongly disrupted by the uncertainties around Brexit, which therefore also put a brake on the CAP reform negotiations. The EU executive tried to break this deadlock by repeatedly putting pressure on the decision-makers to make urgent progress on the MFF negotiations, but without much success.

Transition approved on time?

The co-legislators were well-aware of these blocking factors and had been waiting a long time for the Commission to present its CAP transition proposals to deal with the expected delay. As early as in February, some MEPs had warned that the CAP reform may not be completed by 2020 and a transitional programme would need to be implemented for the year 2021. Afterwards, several other parliamentarians and agriculture ministers explicitly asked EU Agriculture Commissioner Phil Hogan for temporary schemes to avoid interruptions in CAP measures and funding.

For months, Hogan openly maintained that there was "still some time to get the business done" on the reform package, but his cabinet and administration were already preparing the transitional settlement behind closed doors. The one-year transition package that was eventually presented by the Commission consists of two draft Regulations. The first one - the so-called "flexibility proposal" - is the more technical component that includes provisions to ensure the functioning of mechanisms such as financial discipline and possible transfers between the two CAP Pillars. The EU executive aimed to get this part adopted by the Council and Parliament by the end of 2019. The co-legislators also voiced their willingness to accept these technical elements quickly through a "fast-track" procedure. As it stands now, they will only miss this deadline by a short delay.

The Council's Special Committee on Agriculture (SCA) already approved the agreement without changes and sent it to the Parliament. If confirmed by MEPs, the "flexibility proposal" would come back to the Council for final adoption in January 2020. Meanwhile, the EU executive foresaw more time for the second proposal, the "transitional proposal", hoping that it will be approved by the summer of 2020. This more political component is aimed at ensuring the continuity of CAP support under both pillars in 2021 and easing the transition towards the future Strategic Plans. However, some Agriculture MEPs already indicated that they will need more time for this dossier, which is likely to be amended. If both parts of the transition package do not get approved before the end of 2020, there is a risk that farmers will have a gap in their CAP support in 2021.

Towards a delay of two or three years?

But even if the co-legislators manage to work out an agreement on the transition on time, they might need to approve another transition shortly afterwards. Most MEPs and some member states already expressed concerns that the proposed one-year extension to the current CAP will be insufficient to cope with the delays in the reform negotiations. Again, the ongoing talks on the EU budget and the Brexit process could cause further slips in the timetable for the new CAP. The MFF discussions are now expected to continue well into 2020, and it could even prove difficult to let all players agree on the precise figures by the middle of next year. As long as these talks have not been settled, the Council will not even adopt its first position on the future CAP design.

Moreover, it remains to be seen whether the deadline for Brexit, which paralyses EU decision-making on the budget, will not be extended again to a date beyond January 31. Another transitional year would mean the next CAP could only enter into force in 2023 - a scenario already anticipated by IEG Policy in August. French Agriculture Minister Didier Guillaume even told IEG Policy in September that the transition period could last up to three years - a vision recently shared by the agricultural think tank Farm Europe.

As the end of the next EU budget period is still fixed at 2027, this begs the question if it would be useful to have a new CAP in place for just three years or four years. This possible outcome would be strongly at odds with the more long-term approach for the EU's farming policy envisaged by the new Agriculture Commissioner Janusz Wojciechowski.

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In 2019, slow progress in the CAP reform negotiations forced the European Commission to propose a one-year transition period for the EU's farming policies. Continued uncertainty around Brexit and stalled EU budget negotiations could lead to further slips in the timetable in 2020.

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