News Agricultural policy
The different views on the CAP
Various parties gave their views on the Common Agricultural Policy (CAP) on 11 October. What are the views and what could be the income effects for the farmer?
Wageningen Economic Research (WUR) has examined the income effects of the introduce looked. The scenarios that are outlined vary from a budget that is strongly focused on biodiversity and social objectives (pillar 2) to a scenario that is more primarily focused on income support (pillar 1).
The scenario in which the CAP focuses on greening assumes a lot of support for, for example, extensively grazed pastures and wetland plots. A maximum of €1.650 per hectare in aid can be received through this system. It does mean that many demands are made on the farmer.
less budget
Calculations have also been made with a circular agriculture scenario and continuation of the current system. If the current system is continued, farmers will receive about 2020% less support from 1, because the budget will be reduced, researchers at the WUR have calculated. The influence for farmers can be large, because the single farm payment amounts to 6% to 7% of the turnover for dairy farmers and arable farmers.
For the farmers who focus on providing social services, the impact of the proposal (which will take effect from 2021) will be the most positive; provided that it focuses on Pillar 2. However, in the current situation the majority of farmers will benefit more from a CAP that remains focused on direct income support through Pillar 1.
Direct support stripped
LTO Nederland and the Dutch Dairy Farmers' Union fear that the first pillar of the CAP will be stripped down in favor of the second pillar (in which greening is rewarded). Yet these organizations are not against greening measures either, they state their vision on the cap.
Jaap van Wenum, chairman of LTO Akkerbouw, wants to participate in the measures through a system of options. In that system, farmers must opt for goals that support biodiversity and this must be possible in a way that suits the entrepreneur. The rewards for biodiversity must then be able to be chosen from a wide range of options and must in this way be anchored in the new CAP.
Green or continue
Incidentally, all parties state that they aim for a good farmer's income. A separation between the parties can therefore be better made on the basis of how this income is to be achieved. A good income through greening or a good income through efficiency and large-scale production?
In short, the parties in favor of more greening (WUR, the water boards and the province) aim for a CAP that focuses on Pillar 2. These parties do not directly want farmers to receive less support, but want farmers to be supported only if they make the desired move towards more biodiversity.
Pillar 1 focus more on sustainable performance
Pillar 1 should also have a direct relationship between receiving income support and sustainable performance, according to both the Union of Water Boards and David Kleijn of WUR. The proposals for the new CAP already state that environmental and climate targets must also be met for the basic payment (Pillar 1).
This worries the Dutch Arable Farming Union (NAV), because everyone still receives a basic allowance per hectare. The loss of support could mean the end of several companies. However, the NAV is one of the parties that argues that change towards a more sustainable agriculture will not succeed through the CAP. According to them, this must be paid for and supported from the market.
Market protection
The NAV therefore argued that market protection should be done. After all, it cannot be the case that all kinds of requirements are imposed on European farmers, while the European Union (EU) simultaneously concludes free trade agreements with countries outside the EU (which impose lower requirements on the production method).
Rabobank considers a system with biodiversity indicators, such as the biodiversity monitor that the bank developed together with FrieslandCampina and the World Wildlife Fund, a good solution. In this way, the cost price can be continued throughout the entire chain. Like the NAV, this basically means that social costs must be paid from the market.
Reinforce competitive position
Rabobank wants, on the one hand, to make production more sustainable and, on the other, to increase productivity and quality in order to strengthen its position in the global market. Increase in scale will also remain necessary, in order to ensure that entrepreneurs with a socially accepted production method can realize a full income from their business.
In her vision, Boer Bewust mainly describes a CAP that should support farmers to grow efficiently. This is to have equal opportunities in a global playing field. The organization also puts a finger on the financing of the agricultural sector, just like the NAJK does.
Succession
Parties are concerned that 75% of farmers are 55 years or older. They wonder how the transfer of farms will take place over the next 15 years (with today's financing options). According to the parties, this must be carefully considered in the new CAP.
Anne-Jan Doorn
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