COULD EUROPEAN AGRICULTURAL POLICY DO MORE TO PROMOTE BIODIVERSITY?

Alan MatthewsTrinity College Dublinalan.matthews@tcd.ie

Presentation to the Teagasc Biodiversity Conference “Farmland Conservation with 2020 Vision”

Portlaoise, Co. Laois21st & 22nd October 2015

EU Biodiversity Strategy 2020 & the CAP

• Target 3A of the Biodiversity Strategy• By 2020, maximise areas under agriculture across

grasslands, arable land and permanent crops that are covered by biodiversity-related measures under the CAP so as to ensure the conservation of biodiversity and to bring about a measurable improvement in the conservation status of species and habitats that depend on or are affected by agriculture and in the provision of ecosystem services as compared to the EU 2010 Baseline, thus contributing to enhance sustainable management.

Lack of progress towards biodiversity goals highlighted in 2020 Strategy Mid-Term Review

Changes in conservation status of habitats associated with agricultural ecosystems - 2007-13 vs 2001-2006

Agriculture and biodiversity• Policy is complicated by the different and non-linear

relationships

• Positive: Much farmland biodiversity due to agricultural practices and depends on continued active management

• Negative: Much farmland biodiversity loss due to agricultural practices arising from intensification

• Negative: Land used for nature is not available for food or energy production

• Positive: Agricultural productivity and resilience depend on biodiversity, at least over the longer-term

• An area typified by market failures

The promise of the 2013 reform : a CAP focused on delivering public goods

• Three objectives of the reform

• Objective 1: Viable food production• Objective 2: Sustainable management of natural

resources and climate action• Objective 3: Balanced territorial development

2013 CAP reform and biodiversity• Pillar 1: • Mandatory 30% DP national ceiling for green payment in return for

three practices beneficial for the environment and climate• Ecological Focus Areas• Retention of permanent grassland• Crop diversification

• Up to 5% national ceiling could be devoted to ANC payments• Only Denmark made use of this option

• Pillar 2• Initial MFF funding -18% reduction 2020 vs 2013 real terms

• Flexibility of funding between P1 and P2 resulted in net transfer of €3 billion to P2 (+ proceeds of capping)

• Greater flexibility for MS to choose appropriate measures• but 30% required spend on agri-environment-climate

• State aids

Source: Euractiv

Green spending in 6

large EU member states

– big increase in spending

labelled ‘green’, but will there be a commensurate improvement in

biodiversity status?

Ecological focus areas – the obligation• Where the arable land of a holding covers more than 15

hectares, the farmer shall ensure that an area corresponding to at least 5% of the arable land of the holding is ecological focus area.

• Exemptions:• Holdings with less than 15 ha of arable land; • If more than 75% of the eligible agricultural area is permanent

grassland, used for herbaceous forage or for the production of crops under water, unless the arable area is over 30 hectares;

• If more than 75% of the arable area is used for production of grasses or herbaceous forage, for leguminous crops or is land laying fallow, unless the arable area is over 30 hectares:

• If the holding is an organic farm;• Permanent crop area (as this is not considered arable land):• ‘Forest exemption’

EFAs – MS could choose up to 10 elements (further choices under landscape elements)

Source: DG AGRI

Counting individual landscape elements, 5 member states allow between 2-4 elements, 10 member states between 5 and 9, and 14 member states 10 or more.

Source: Commission Delegated Regulation (EU) No 639/2014

Various elements are converted to area equivalents and weighted for environmental (mainly biodiversity?) impact

EFAs– benefits for biodiversity• Depends on

• (a) the additional efforts farmers are required to undertake in order to receive the green payment, and

• (b) the extent to which these additional efforts will contribute to conserving biodiversity.

• There is thus both a quantitative and a qualitative element in the evaluation.

Limited additionality of current EFAs• Some arable area is exempt

• holdings less than 15 ha of arable land account for between 54-59% of holdings with arable area accounting for between 13-21% of the total arable area

• Limited extent of non-compliant arable area• With the broad range of EFA elements permitted, the majority of

arable holdings will be able to meet their 5% obligation with their current practices.

• One calculation puts the area of non-compliant land likely to be affected at around 20% of the total arable area

• Suggesting EFAs might lead to lead to <1% of land use change on the total arable area

Non-compliant EFA area is quite small….

Source: Gocht 2015

Non-compliance after protein crops (0.7), fallowed land (1), cover crops (0.3) are accounted:

Percent of EFA obligation (percentage of the 5% obligation)Source: Gocht, CAPRI

…but differs between member states

EFAs – other considerations• Qualitative evaluation - Limited biodiversity benefits derive

from some EFA elements• What choices have farmers made in selecting EFA

elements?

Distinguishing between the gross and net impact of EFAs• EFAs not only change farm practices on the EFA areas,

but also have indirect effects for farm practices on non-EFA areas• To the extent that EFAs take land out of production, farmers will

respond by intensifying inputs on the remaining land• Where crop prices increase because of reduced supply if EFAs are

truly additional, this could lead to an expansion of the arable area at the expense of permanent grasslands which are also deemed important for biodiversity

• If intensification did not happen, more of the production foregone by EFAs would simply be displaced to another part of the world

• ILUC effect could result in greater loss of global biodiversity if, for example, area expansion was at expense of tropical rainforest

• .

Permanent grassland - obligations• Member States shall designate permanent grasslands which are

environmentally sensitive in Natura 2000 areas• Member States may, in order to ensure the protection of

environmentally valuable permanent grasslands, decide to designate further sensitive areas situated outside these areas, including permanent grasslands on carbon-rich soils. • Farmers shall not convert or plough permanent grassland situated in areas

designated by Member States under the first subparagraph and, where applicable, the second subparagraph.

• Member States shall ensure that the ratio of areas of permanent grassland to the total agricultural area does not decrease by more than 5% compared to 2015 reference ratio. Obligation can apply at national, regional, sub-regional or even holding level where necessary to achieve objective.

• Where ratio falls below 5%, farmers who converted permanent grassland to other uses can be required to reconvert.

Permanent grassland decisions

• Almost all Member States decided to manage the ratio of permanent grassland at national level. Only four MS opted for the calculation of the ratio at the regional level (BE, FR, DE, UK).

• Four Member States decided to designate environmentally-sensitive permanent grassland (ESPG) outside Natura 2000 areas (CZ, LV, LU, UK-WA). • New ESPG can be added on annual cycle, with farmers being

given notice in due time

Source: DG AGRI

Not all grassland is equal in biodiversity terms

• No distinction made between intensively-managed grassland and high nature value grasslands• Latter are often semi-natural grasslands, scrub or woodland• Only obligation for ESPG is not to plough

• Key issue for HNV grasslands is how to maintain farming activity while discouraging intensification

• In some regions, these areas are not deemed eligible land for direct payments, e.g. wooded pastures

• Limited scope to link Pillar 1 payments to specific HNV farming systems

Crop diversification• Farms with arable area > 10 ha minimum of 2 crops, > 30

ha minimum of 3 crops• JRC 2015 study

• 70% total holdings exempted either inc non-arable farms, farms with small arable areas or arable farms with large areas planted to fodder crops

• 30% of holdings covered, of which 15% non-compliant• Taking benefit/cost of compliance into account, proportion of non-

compliant farms falls to 10% (+ reduction of non-compliant area)• Total area of land brought into compliance < 1% of arable area

• Environmental benefits of crop diversification• Not all net, as greening replaces GAEC standard requiring crop

rotation (weakly enforced)

RDPs – 6 priority areas, several focus areas per priority

DG AGR May 2015

DG AGR May 2015

DG AGR May 2015

Note: 27% of UAA covered by AEMs in

2007-2013 + further area under Natura 2000

CAP built-in agenda 2015-2020• 2016 review of experience with EFA’s in first year to assess

if there is a noticeable reduction in production• 2017 evaluation of EFAs before end-March accompanied,

where appropriate, by a proposal for a legislative act to increase the arable area covered by EFAs from 5% to 7%. • Hogan commitment to widen this review to cover other aspects of

simplification of direct payments• End 2016 mid-term review of the MFF – ‘revision clause’

• Will determine, inter alia, duration of next MFF• End 2018 first report on performance of CAP under the

common monitoring and evaluation framework• End 2017 Commission must present proposal for new MFF

– will propose CAP budget for period after 2020

Political economy drivers of next reform

• Economic situation of farming to 2020• Outcome of negotiations on the next EU budget (MFF)• Need for time to assess environmental impacts of the

2013 CAP reform• ‘Reform fatigue’ among member states• Commission focus on jobs and growth rather than

provision of public goods• The unpromising legislative timetable for next CAP reform• Yet, institutions seem to be gearing up for a substantive

CAP review

Future biodiversity directions – (1)• Recall the dual demands on agricultural policy in promoting

biodiversity – support low-intensity farming and manage high-intensity farming to protect biodiversity

• One direction - build on the Pillar 1 greening/cross-compliance approach• Has the advantage that (some) intensive farms are obliged to comply with

limited biodiversity practices• Extend area of EFAs – 7%, 10% ?• Remove exemptions

• But, Pillar 1 approach• Pillar 1 measures constrained by requirement that they must be ‘simple, annual

and generalizable’• Pillar 1 measures do not require active management (non-contractual) and they

are not targeted.• Huge opposition to moving payments from ‘productive’ farmers to farmers in

marginal areas simply on basis of land ownership

Future biodiversity directions – (2)• Other direction is to emphasise a results-based

approach• Payments should be provided not per hectare but per unit of public

good provided• Transfer the greening budget from P1 to P2 and use to

strengthen agri-environment-climate schemes in RDPs• Advantages of the targeted, contractual approach

• Active management• Risky – funds might be lost to agriculture altogether• Member state hostility to P2 (co-financing, absorption

problems, programming overhead, higher transactions costs)

Future biodiversity directions – (3)

• Three longer-term perspectives• Serious move in COMAGRI in the European Parliament to move

green payment to Pillar 2, maybe even as early as 2018 (no co-financing)

• Talk about merging the EU’s Structural and Investment Funds (Cohesion, Regional, Social, Fisheries, Rural Development) into a single Fund – what implications for the land management elements of Pillar 2?

• Move responsibility for agri-environment to DG ENVI rather than DG AGRI (delivery could be contracted to agric advisory services)

The role for biodiversity advocates• Communicate clear messages on what works for biodiversity

• Telling lack of ecological input to Commission’s impact assessment of the green payment

• What lessons can be learned from the land-sharing versus land-sparing debate for the appropriate spatial scale at which to integrate food production and biodiversity?

• How can monitoring be undertaken accurately and cheaply to allow the development of more results-based agri-environment schemes?

• Can we improve our methods of putting an economic valuation on natural capital and biodiversity to assist in making the complex trade-offs not only between food production and biodiversity, but between different environmental objectives as well?

• Can we improve the design of agri-environmental schemes so as to generate larger biodiversity benefits for a given expenditure?

I look forward to the debate

Thank you