Explanatory Memorandum to COM(2024)139 - Amendment of Regulations (EU) 2021/2115 and (EU) 2021/2116 as regards good agricultural and environmental condition standards, schemes for climate, environment and animal welfare, amendments to CAP Strategic Plans, review of CAP Strategic Plans and exemptions from controls and penalties - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2024)139 - Amendment of Regulations (EU) 2021/2115 and (EU) 2021/2116 as regards good agricultural and environmental condition ... |
|---|---|
| source | COM(2024)139 |
| date | 15-03-2024 |
1. CONTEXT OF THE PROPOSAL
• Reasons for and objectives of the proposal
Through Strategic Plans under the Common Agricultural Policy (CAP), the European Union aims to foster a smart, competitive, resilient and diversified agricultural sector ensuring long-term food security. It also aims at the same time, to support and strengthen environmental protection, including biodiversity, and climate action, and to contribute to achieving the environmental and climate-related objectives of the Union, including commitments under the Paris Agreement, as well as to strengthen the socio-economic fabric of rural areas.
28 CAP Strategic Plans (CSP) were developed by the Member States and approved by the Commission and first applied in 2023, delivering direct income support to farmers, support for environmental schemes, as well as support for e.g. investments, certain agricultural sectors, rural development, and knowledge and innovation. The Strategic Plans provide both a considerable increase in subsidiarity in management of the CAP and a performance orientation. Expenditure must contribute to delivering on 10 specific economic, environmental and social objectives of the CAP, measured by a series of common indicators.
These Strategic Plans contribute to the Commission’s ambitious Green Deal agenda, in combination with regulatory initiatives, research investments and other actions to meet the Union’s environmental and 2050 climate objectives. In this light, the CAP Strategic Plan Regulation (Regulation (EU) 2021/2115) introduced higher baseline conditions for farm support, and collectively the 28 Strategic Plans allocate substantially higher amounts of support to farmers for environmental and climate objectives compared to the previous CAP.
Overall, the new approach works well. However, the first year of implementation of the CAP Strategic Plan has made clear that adjustments are necessary to ensure effective implementation of the plans and cut red-tape. Moreover, the implementation of the plans should not be seen in isolation from discussions on other Green Deal legislative proposals, which will or may affect both, farmers directly and the requirements in the Strategic Plans. In addition, the CAP Strategic Plan Regulation was agreed before the start of the large-scale war of aggression of Russia in Ukraine, which continues to strongly influence markets (and farmers’ margins), as well as Europe’s agricultural policy context.
While the reasons for the widespread protests of farmers across the Member States of the Union are complex and diverse, the above-mentioned reasons are an important part of the context.
The European Council of 1 February 2024 discussed the challenges in the agricultural sector including the concerns raised by the farmers during the protests. Stressing the essential role of the CAP, it called on the Council and the Commission to take work forward as necessary. This requires a spirit of cooperation among the European Commission, the other EU institutions, Member States and the farmers. Commission President Von der Leyen committed to launch a thorough analysis of the administrative burden weighting on farmers’ shoulders to identify areas for improvement. Among others, based also on the input received from the Member States collected by the Council Presidency, and from EU farmers’ organisations and the European Parliament, the Commission came forward with a non-paper on possible actions for simplification on 22 February 2024 as an input to Council discussions.
The Agriculture and Fisheries Council of 26 February 2024 confirmed its political will to respond effectively to the concerns of farmers and, as a first step, supported a range of measures included in the aforementioned Commission non-paper as priority for the short-term response to the current crisis. It also insisted that a review of the basic acts of the Common Agricultural Policy is necessary and should be initiated as soon as possible. The Commission also carefully listened to the views expressed in the meeting on 26 February of the Committee on Agriculture and Rural Development of the European Parliament during the exchange of views on the proposed simplification package for farmers and national administrations.
Contents
With these proposals, the Commission aims for well-targeted adjustments of the CAP Strategic Plans Regulations to address certain difficulties in their implementation. With this targeted approach, the Commission provides a very significant response to the problems identified and the concerns raised, while it aims to maintain and defend the overall orientation of the current CAP and its role in supporting the transition of European agriculture to sustainable farming. The Commission believes that these targeted amendments will facilitate a quick adoption by the European Parliament and the Council.
The adjustments focus on changes that are beneficial for farmers in reducing their administrative burden, flexibilities that allow national administrations to adapt implementation to address farmers’ situations, changes to the balance between conditionality requirements and voluntary schemes which incentivise green practices, as well as reassuring beneficiaries as regards the stability of the policy during the lifetime of the Strategic Plans. For instance, the adjustments with regard to conditionality will give Member States more flexibility in establishing GAEC standards at national level, hence simplifying the burden on farmers, e.g. providing for more options for how to fulfil the requirements or allowing specific well targeted exemptions or derogations, in particular in case of adverse weather conditions. The administrative burden of smaller farmers (up to 10 hectares of agricultural areas, i.e. 65% of farmers) will be eased by exempting them from control visits to check the respect of the conditionality requirements. At the same time, the fact that smaller farmers will be exempted from penalties will also simplify Member States’ administrative work, as national authorities will not have to calculate penalties which may fall under the applicable de minimis threshold.
As regards the proposal to increase the number of CSP amendments this should allow Member States to adapt their CAP strategic plans when it is necessary to take into account changing conditions for farmers. In this way requirements that are no longer justified would not remain in place, purely for administrative reasons, making the system simpler.
Member States are responsible for making full use of the simplification provisions to reduce farmers’ administrative burden.
• Consistency with existing policy provisions in the policy area
The proposed amendments are consistent with the general philosophy of the CAP basic acts currently in force (Strategic Plan Regulation and the Regulation on the Financing, management and monitoring of the CAP). Therefore, the proposal is consistent with existing policy provisions.
• Consistency with other Union policies
The legal proposal adjusts a limited number of provisions of the CAP regulations currently in force, which were deemed consistent with other Union policies. The proposal is therefore consistent with other Union policies.
2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
• Legal basis
Article 43(2) TFEU since the Regulation amends Regulations (EU) 2021/2115 and 2021/2116 which are mainly based on this legal basis.
• Subsidiarity (for non-exclusive competence)
The Treaty on the Functioning of the European Union provides that the competence for agriculture is shared between the Union and the Member States. The Union exercises its competence through the adoption of various legislative acts, thereby defining and implementing an EU CAP as provided for in Article 38 to 44 TFEU. Regulations (EU) 2021/2115 and 2021/2116 are part of the legislative framework of the EU CAP. In order to alleviate certain difficulties, provide simplification and to take off burdens from farmers, these Regulations need to be amended, which can only be done at EU level.
• Proportionality
The proposal modifies the existing Regulations only to the extent strictly necessary to achieve the objectives outlined above.
• Choice of the instrument
Since the original legislative acts are regulations of the European Parliament and the Council, the amendments must also be introduced as a European Parliament and Council regulation by means of the ordinary legislative procedure.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS
• Ex-post evaluations/fitness checks of existing legislation
Not applicable.
• Stakeholder consultations
In view of the widespread farm protests and to analyse the administrative burden weighing on farmers’ shoulders as well as identify areas for improvement, the Commission has written to four main EU-level farming organisations asking them for proposals of measures at EU level (CAP and other EU legislation) which can reduce administrative burden for farmers. A similar letter has been sent by the Belgian Presidency of the Council to the Ministers of Agriculture, asking them to identify issues at EU level which can reduce administrative burden for farmers. Also, the European Parliament’s committee for agriculture and rural development sent a letter identifying six areas where they consider that concrete and immediate action is necessary. The urgent nature of this proposal did not allow for a normal consultation process.
This ad-hoc consultation process that lasted one week has resulted in a wide range of suggestions and proposals. The responses from all Member State administrations are wide in scope, and while some are addressing practical implementation challenges and are feasible in the short run, many are far reaching and go beyond the reduction of administrative burden, simplification of implementation or creation of policy stability for farmers. The consultation of the farming organisations resulted in calls for urgent action to simplify the administrative burden for farmers, but also stressed the need for a stable and consistent policy framework, proposing further reforms for the longer-term. Similarly, the European Parliament’s committee for agricultural and rural development identified a number of key priority areas of work.
1. A first series of proposals covers management of CAP Strategic Plans and relates to procedures around amending strategic plans (including the number of allowed amendments), performance monitoring and review (including the Annual Performance Report), and certain elements of the Integrated Administration and Control System (simplification of the Area Monitoring System (AMS) quality assessment methodology, and the use of geo-tagged photos, and Geospatial Applications) as well as the control and penalty system (including rationalisation of all controls on a farm).
The Commission responded to this set of proposals with a number of non-legislative actions and has included a few targeted and limited initiatives in this proposal, notably to facilitate more frequent amendments of CAP Strategic Plans and to eliminate conditionality controls for small farms.
2. A second set of proposals concerns CAP Strategic Plan actions to the benefit of the environment and of the climate. Many proposals concern (drastic) changes to conditionality requirements and controls, but also other proposals were included, e.g. on treatment of small farms or financial management of environmental interventions.
The Commission has already adopted a temporary and partial derogation to GAEC standard 8, first requirement, for 2024 and an amendment of Delegated Regulation (EU) 2022/126 with adjustments for GAEC standard 1. In addition, this proposal contains a few targeted adjustments to conditionality that aim to address implementation concerns. The Commission aims for this surgical approach with a view to maintain the overall policy objectives of the CAP Strategic Plan Regulation as reflected in the decisions of the co-legislators in 2021.
3. A third group of proposals relates to other CAP provisions beyond environment and climate, such as expanding coupled support, postponing or removing social conditionality, or changes to sectoral support schemes, promotion measures and organic farming. Other suggestions call for a more fundamental rethink of EU agricultural policy.
Many of these suggestions go beyond the remit of simplification and improved implementation of the CAP Strategic Plans. Moreover, the Commission stands by key orientations of the CAP Strategic Plan Regulation, such as social conditionality. In addition, several suggestions are already feasible within the increased margin of manoeuvre left to the Member States by the new delivery model of the CAP.
4. A fourth group of suggestions relates to farm income concerns and notably to risk and crisis management, with suggestions to allocate more CAP funds to crisis management, to revise CAP provisions on support to risk management instruments and take action to improve the position of farmers in the food chain.
While changes to financial aspects of the CAP should be discussed in the context of the preparation of the next Multiannual Financial Framework, the Commission shares the concerns related to farm income and envisages actions to improve the position of farmers in the food chain in a separate work stream.
5. A fifth and final set of suggestions concern regulations outside the CAP, such as on deforestation, forest monitoring, sanitary rules, or renewable energy.
The Commission is considering a number of punctual changes in acts outside of the CAP and is working on non-legislative measures with the aim of simplifying or clarifying certain rules, while other policy changes must be negotiated during ongoing legislative procedures.
• Collection and use of expertise
Not applicable (external expertise was not used).
• Impact assessment
With a view to the political urgency of tabling this proposal, which aims to respond to a crisis situation in EU agriculture, no impact assessment has been carried out, as foreseen in Tool #1 of the Commission’s ‘better regulation’ guidelines that stipulates the importance of their flexible and proportionate application. This proposal concerns a number of targeted amendments to Regulations (EU) 2021/2115 and 2021/2116. Many of the more sweeping proposals to address concerns in relation to administrative burden and stable and effective implementation of the CAP, as tabled during the ad-hoc consultation process, are not considered. The Commission is of the view that policy stability is important and maintains that the reformed CAP “plays an important role in supporting EU agriculture in the transition to a sustainable farming model, while also supporting farmers’ incomes as well as food security.” This is based on the extensive external assessment of the 28 approved CAP Strategic Plans that the Commission commissioned and that formed the basis for its report to the European Parliament and the Council of 23 November 2023: “Summary of CAP Strategic Plans for 2023-2027: joint effort and collective ambition"1, in which the aforementioned quote can be found. In this report the Commission also concluded that “[t]he new CAP strategic plans are an appropriate tool to pursue CAP policy objectives in an integrated way as Member States use them to prepare and deliver responses to the challenges across their territories, while prioritising objectives and using available resources in an effective and efficient way.”.
Nevertheless, the first year of implementation of the CAP Strategic Plan has shown some practical implementation problems. For this reason, in addition to non-legislative actions, certain limited adjustments of the Union legal framework for the CAP are necessary to ensure effective implementation of the CAP Strategic Plans and in particular to further reduce administrative burden linked with their implementation.
A thorough impact assessment for the reform of the CAP that was agreed in 2021 was carried out. This assessment accompanied the proposals tabled by the Commission in 20182. This impact assessment also provides important background to the adjustments contained in this proposal. More specifically, key differences between the options assessed in 2018 related to the balance of voluntary (“eco-scheme”) or obligatory (“conditionality”) environmental requirements. While the Regulation finally adopted is a mix of both approaches, the impact assessment (p. 35) demonstrates the advantages and drawbacks of both. On the basis of the changed situation and the experiences in the first year of application, the Commission proposes to rebalance in the direction of a more voluntary approach.
• Regulatory fitness and simplification
The proposals will specifically reduce burden for small farms, which are micro-enterprises. The proposal to exempt farms under 10 hectares from conditionality controls affects 65% of CAP beneficiaries.
• Fundamental rights
The proposal respects the fundamental rights and observes the principles recognised, in particular by the Charter of Fundamental Rights of the European Union.
4. BUDGETARY IMPLICATIONS
This proposal does not have budgetary impact.
5. OTHER ELEMENTS
• Implementation plans and monitoring, evaluation and reporting arrangements
As laid down in Article 128 of the CAP Strategic Plan Regulation, a performance framework has been established under the shared responsibility of Member States and the Commission. The performance framework allows reporting, monitoring and evaluation of the performance of the CAP Strategic Plan during its implementation. The changes in this proposal would be covered by this framework.
• Explanatory documents (for directives)
Not applicable (the legal text is a regulation).
• Detailed explanation of the specific provisions of the proposal
The Commission proposes a number of changes to conditionality.
A general provision is included allowing Member States to allow temporary and targeted derogations from certain conditionality requirements in view of increasingly unpredictable weather conditions that can prevent farmers from complying with requirements, such as deadlines in a given year. For the sake of completeness of the performance, monitoring and evaluation framework, the Commission will consider that Member States once per year inform the Commission about the implementation of such temporary derogations in accordance with Article 143 of Regulation (EU) 2021/2115, in particular paragraph 4 of that Article.
Member States will also be allowed to provide specific exemptions from Good Agricultural and Environmental Condition (GAEC) standards 5, 6, 7 and 9 covering situations where there is a risk that the requirements would run counter to their objectives, for instance due to particular agronomic situations for certain crops on specific soil types and pedoclimatic conditions or due to damage to permanent grasslands, among others due to predators or invasive species. As regards individual GAECs, the Commission proposes to remove from GAEC standard 8 the obligation to devote a minimum share of arable land to non-productive areas (fallow land) or features (hedges, trees…), while keeping the protection of existing landscape features. Instead, Member States are required to establish an eco-scheme offering support to farmers for keeping a share of arable land in non-productive state or to create new landscape features. This would ensure that farmers are specifically rewarded for these non-productive areas and features that are beneficial for biodiversity on farmland and more generally for rural areas.
With regard to GAEC standard 7 requiring crop rotation, the Commission proposes to keep crop rotation but allow Member States to add the possibility to fulfil this requirement with crop diversification. Crop diversification also contributes to preserving soil potential, by ensuring diversity of crops within a year and hence indirectly promoting rotation of crops from one year to another. The Commission believes that this flexibility will enable farmers affected by regular drought or excessive rainfall to comply with this condition in a way that is more compatible with farming realities. At the same time, the Commission acknowledges and stresses the agronomic benefits of crop rotation. This is why through eco-schemes more ambitious forms of crop rotation and diversification are and should continue to be rewarded, including notably to include protein crops in the rotation, so as to enhance soil quality and the resilience of crop farming.
The application of the standard to cover soil in sensitive periods (GAEC standard 6) has caused considerable administrative rigidities and uncertainty for farmers, who often refer to ‘calendar farming’ that does not recognize the (increasing) variability of the weather. To honor the spirit of flexibility of the CAP Strategic Plans, the Commission proposes to clarify that implementing this conditionality standard will be mostly in the hands of Member States.
It is also proposed to increase the number of requests for amendment of CAP Strategic Plan, which a Member State may submit to two per year (up from the current one per year). This is needed to address more quickly farmers’ changing situations, including those caused by adverse weather events.
For the sake of reducing burden and increasing predictability of CAP support for farmers, the obligation for Member States to assess whether their CAP Strategic Plans need to be amended in case of modifications of certain Union legislation concerning the environment and climate and notify the Commission of this assessment within a certain deadline is proposed to be limited to amendments of legislative acts listed in Annex XIII, that enter into force by 31 December 2025 at the latest. The obligation for Member States to describe how the greater overall contribution to environmental and climate objective set out in Article 105 of Regulation (EU) 2021/2115 is met, and how the green architecture of the CAP contributes to the achievement of and is consistent with long-term national targets set out or deriving from the legislative acts listed in Annex XIII of that Regulation remains in place. In addition, the Commission will estimate the climate change mitigation potential of the CAP Strategic Plans over the period 2023-2027.
It is proposed to amend Regulation (EU) 2021/2116 to exempt small farmers having no more than 10 hectares of agricultural areas from conditionality controls and penalties. The purpose is to alleviate the administrative burden, both for national administrations and for farmers linked to controls and collection of penalties which is higher for small farms in comparison to bigger ones. The exemption of small farmers from conditionality controls and penalties will not affect the controls done under other legislation which are part of the Statutory Management Requirements (SMRs). In addition, beneficiaries who receive area-based payments under both a CAP Strategic Plan pursuant to Regulation (EU) 2021/2115 and a rural development programme implemented under Regulation (EU) No 1305/2013 until 31 December 2025 and are therefore submitted to checks of conditionality pursuant to Regulation (EU) 2021/2116, should be exempted from checks of cross-compliance and the application of penalties pursuant to Regulation (EU) No 1306/2013.
In order to address concerns of Member States and farmers already with regard to claim year 2024, it is proposed that amendments to GAEC standards 6, 7 and 8 as well as an exemption from penalties for small farmers having no more than 10 hectares of agricultural areas apply retroactively. In view of this, transitional provisions are proposed for claim year 2024 to ensure that Member States may apply amendments to their CAP Strategic Plans related to GAEC standards 6, 7 and 8 before the Commission approves those changes in line with Article 119 of Regulation (EU) 2021/2115. As regards GAEC standard 8 such a possibility should be linked to the existence of eco-schemes that would cover practices for the maintenance of non-productive areas, such as land lying fallow or eco-schemes for the establishment of new landscape features on arable land. However, the possibility, including from a legal point of view, to provide for retroactive application as regards the amendments to GAEC standards 6, 7 and 8 will depend on the exact content and the date of entry into force of the amendments included in this Regulation. At this moment of time, it is not possible to decide if such a retroactive application can be provided for. The related provisions of Article 3 and 4, second subparagraph are therefore included in brackets in the proposal. Their feasibility should be discussed with the co-legislators in view of the final content and the date of entry into force of this Regulation.