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News CAP policy

Payment CAP funds faster, but lower

30 October 2018 - Niels van der Boom

The Netherlands Enterprise Agency (RVO.nl) will start paying out direct payments from the Common Agricultural Policy (CAP) on 1 December. For example, Minister Carola Schouten (Agriculture, Nature and Food Quality) reports via a Letter to Parliament.

By the end of this year, 95% of applicants should have received the basic payment. Last year the percentage of payments was still 90%. The other 5% concern problem files, where, for example, the account number is incorrect or for which the checks have not (yet) been completed.

In addition to the basic payment, greening is also paid (if possible). However, all checks must first be completed for this. Some of these checks cannot be completed until 2019. In addition, the support for young farmers is also paid directly.

Discount on payment entitlements
Both this year and next year, €30 million of the budget from the first pillar will be transferred to the second pillar (agricultural nature and landscape management and the broad weather insurance premium). This leads to an additional discount on the value of the payment entitlements. In 2018 and 2019, that value will decrease by 4,48%. In addition, an extra budget is being created for the National Reserve.

267,34

euro

per hectare is the average value

Average base payment
The average value this year is €267,34 per hectare. For the average greening contribution, that is €115,46 per hectare. The discounts for young farmers and grazing livestock premium will only be determined later. In addition to the discount, there is a general budget discount, which Europe prescribes for the reservation of crisis expenditure. This discount amounts to 1,41% and is applied to payments from €2.000. If this reserve is not used, the discount will be paid out in the following year.

The Agriculture and Fisheries Council exchanged views on CAP policy during its consultations on 15 October. This showed that all Member States support a model with more flexibility. Member States find the proposals unnecessarily complicated or detailed. A number of issues are mentioned: the more stringent requirements, the mandatory reporting of results, capping of support, level of detail and definition of a 'real farmer'. Some Member States also find it unacceptable that environmental ambitions increase, but the budget decreases.

Mandatory Regulation
Schouten states in the letter that he has emphasized that the Netherlands supports flexibility. This means that the first pillar will receive an eco-scheme and the second agri-environmental climate measures. "I have asked for eco-schemes to be included in the regulation to be made mandatory for certain groups of farmers," she writes. "In this way they can be rewarded for specific requirements, especially in the field of the environment and climate. Concrete proposals will follow."

The minister also argues for more powers (subsidiarity) when it comes to the system of checks and sanctions. The current proposal is too detailed and complex. Minister Schouten also wants an increase in the minimum percentage of the second pillar measures for environmental and climate objectives from 30% to 40%. The Netherlands is already well above this. According to her, a comparable percentage should apply to direct payments.

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Niels van der Boom

Niels van der Boom is a senior market specialist for arable crops at DCA Market Intelligence. He mainly makes analyses and market updates about the potato market. In columns he shares his sharp view on the arable sector and technology.

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