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European Commission


Brussels, 21 June 2013

Agriculture Council (Luxembourg), 24-25 June 2013

The Agriculture Council meeting of June will take place in Luxembourg starting on June 24, under the presidency of Mr Simon Coveney, Irish Minister of Agriculture, Food and the Marine. The Commission will be represented by Commissioner for Agriculture and Rural Development Dacian Cioloş. A delegation of MEPs, headed by EP Agriculture Committee Chairman Paolo De Castro, will also be present in Luxembourg. Political trilogues (between the Council, the European Parliament and the Commission) will take place – all with a view to moving closer to a political agreement on CAP Reform. (The aim is to start the final political trilogue in Brussels as soon as possible after the Council, followed by a meeting of the EP Agriculture Committee.)

There are no other substantive points on the agenda. The public debates of the Council's formal sessions and the closing press conference can be followed by video streaming:

The presidency will brief Member States on the state of play of negotiations on the reform of the Common Agricultural Policy, based on the ongoing trilogue meetings that have taken place since the last Council. Together with the Commission, the presidency will also organise a series of trilateral meetings with Ministers in order to clarify positions, starting already on Sunday. The aim will be to provide flexibility to the presidency in the Council negotiating mandate – so that it can then go on to negotiate a draft agreement with the EP in trilogues.

What remains to be clarified?

In broad terms, the CAP reform package covers four different European Parliament and Council regulations – i) on Direct Payments, ii) the Single Common Market Organisation (CMO), iii) Rural Development and, iv) a Horizontal Regulation for financing, managing and monitoring the CAP – proposed by the Commission in October 2011 [see IP/11/1181 and MEMO/11/685]. The talks so far have shown that there is wide support in the Council and the EP for the Commission's main concepts, such as the 30% "greening" of direct payments; a fairer distribution of the CAP support both between and within Member States. Nevertheless, there remain a number of difficult issues to be resolved.

Internal convergence is the rebalancing of direct payments among farmers within a Member State as allocations move away from a system based on historical production references (which still applies in most of the EU-15) towards a more even rate per Member State or region. The European Commission strongly supports the idea of setting a minimum threshold for internal convergence – as a % of the regional average payment per hectare – in order to have a more equitable distribution of support, and to be consistent with the likely accord on external convergence (the rebalancing of funds between Member States). Various elements of flexibility are left for Member States, such as allowing for differences based on regional and/or agronomic criteria, and/or the option of retaining a certain amount of "coupled" payments (% still to be defined). An important concept to emerge in the course of the talks is the idea of a redistributive payment - reserving part of the national envelope to the first x hectares on each holding – thereby providing a significant redistribution of funds. The institutions are agreed that the SAPS system –applicable in most of the EU-12 – should end at a later date than currently foreseen.

Linked to the principle of a fairer distribution and better targeting of funds is the proposal for “capping & degressivity”, to reduce the Basic Payment Scheme for the largest, most competitive farms. The Commission wants a compulsory reduction to apply to the Basic Payment on individual farms above €150 000, with a sliding scale leading ultimately to a cap at €300 000 (taking labour costs into account) (NB This does not apply to the greening payment.) Funds generated would be shifted to Rural Development projects in the same region/Member States.

Additional elements to better target support - including young farmers measures, support to active farmers, and the small farmers scheme – have been widely backed by the three sides during the negotiations. The Commission is particularly keen to make a 25% top-up of Direct Payments for young farmers mandatory in order to send an important signal about generational renewal.

While the significant and symbolic new principle of Greening - paying farmers for the provision of environmental public goods - is accepted, many of the details for efficient greening instruments still need to be agreed. A lot of work has gone into preparing the concept of "Greening Equivalency" so that the good work already being done by many farmers can be taken into account, above all in a way that does not dilute the real impact of Greening. There is also a link here with agri-environment schemes to ensure that there is no "double funding". The European Commission will be vigilant to ensure that the greening sanctions regime is a real deterrent in case of non-compliance.

Most of the changes to Rural Development rules have been more or less concluded – such as new options to encourage innovation and to bring farmers & researchers closer together (through European Innovation Partnerships); and to encourage producers' organisations, interbranch associations and short supply chains to improve the competitiveness of these sectors and provide added value for farmers. The main issue remaining here is the new rules for areas with natural constraints – a modernisation and better targeting of the current system of less-favoured areas.

For market measures, moves to increase market orientation include an end to the sugar quota regime (the remaining questions are about when and under what conditions) and a likely modernisation of rules for new vine planting. At the same time, a new market crisis reserve is set to be introduced to respond to unforeseen market disturbances, such as the 2011 e-coli-related problems for fresh vegetables.

Among the issues in the horizontal regulation are new moves to increase the transparency of payments made to CAP beneficiaries, which has broad support across the institutions, and to update and improve various administration and control rules

It will also be important to clarify certain issues of delegated and implementing acts in future as part of the Lisbon-alignment of CAP rules to the comitology rules set out in the Lisbon Treaty.

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