The new system of direct support

Implementation and simplification

Pierre Bascou

DG Agriculture and Rural Development

European Commission

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Policy objectives

Sustainable management of natural resources and climate

action

Balanced territorial development

Viable food production

Reform objectives

Improvedsustainability

Enhancedcompetitiveness

Greatereffectiveness

The new CAP : a new policy framework for a more sustainable European agriculture

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The reform introduced a new system of direct payments …

1. Ensuring the long-term viability of farms

• Providing a basic layer of fixed income support

• Making them less vulnerable to fluctuations in prices and income

2. Enhancing the sustainable management of natural resources

• Reflecting the important role of agriculture in the joint delivery of private and public goods

• Supporting agricultural practices beneficial for the environment and climate

3. Contributing to territorial development

• Allowing for structural and production diversity

• Supporting agriculture in specific areas with significant spillovereffects on food supply chain and rural economies

… while enhancing their efficiency

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More equitabledistribution

Improved targeting

Active farmer Young farmers Green payment Specific support to territories, sectors and

size

Convergence of payments among MS Convergence of payments among farmers Redistributive payment

Greener direct payments

Mandatory practices beneficial for environment and climate

30% of direct payment budget Streamlined cross-compliance

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• Net result = total transfer from pillar I to pillar II of EUR 3 billion over 6 years (possible review in 2017 for the years 2018 and 2019)

Flexibility between pillars

• 9 MS to cap (100% reduction) the amounts of basic payments at max amounts ranging from KEUR 150 to KEUR 600

• 15 MS to only apply the minimum reduction of 5% on amounts above KEUR 150

• 9 MS will subtract the salaries actually paid by farmers before applying the reduction of payments' mechanism

Reduction of payments

• Share of DP envelope for basic payment at EU-28 level estimated at 55%

• The 10 MS currently applying the SAPS will maintain it until 2020

• 6 MS to regionalise the BPS (EL, ES, FI, DE, UK, FR)

Basic Payment

•All MS but DE to implement VCS

•MS' plans for VCS = 10% of total DP envelope for EU 28 in 2015

•9 MS with less than 8% (IE, NL, LU, UK, AT, DK, EE, EL, CY)

•11 MS with the maximum percentage of 13% with 9 of them also using all or part of the additional 2% available in case of support to the protein crops sector

•3 MS (BE, FI, PT) to allocate more than 13 (+2)% to the VCS (subject to approval by Commission)

Voluntary Coupled support

•8 MS to implement the redistributive payment (6 of them will not apply the reduction of payments)

•Only 1 MS (DK) to implement the 1st pillar payment for ANC

•15 MS to implement the SFS but only 2 in the form of a lump-sum equal for all farmers (LV, PT)

Other voluntary schemes

Direct payments: summary of main policy decisions

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Direct payments: summary of main policy decisions

Share of DP envelope left for basic payment at EU-28 level in 2015 = 55%

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Voluntary coupled support (VCS)Sector AT BE BG CY CZ DK EE EL ES FI FR HR HU IE IT LT LU LV MT NL PL PT RO SE SI SK UK

Share of total VCS

Beef √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ 41%

Cereals √ √ √ √ √ √ 2%

Flax √ 0%

F&V √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ 5%

Grain legumes

√ √ √ √ 0%

Hemp √ √ √ 0%

Hops √ √ √ √ √ 0%

Milk √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ 20%

Nuts √ 0%

Oilseeds √ √ 0%

Olive oil √ 2%

Protein crops

√ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ 11%

Rice √ √ √ √ √ √ 1%

Seeds √ √ √ √ 0%

Sheep & goats

√ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ 12%

Silkworms √ √ 0%

Starch potato

√ √ √ √ √ 0%

Sugar beet

√ √ √ √ √ √ √ √ √ √ 4%

GreeningEcological Focus Areas – sent by 1 August 2014 (I)

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Main figures on EFA

• Number of activated EFA types

Between 2 and 4 EFA: 5 MS (FI, LT, NL, SI, ES)

Between 5 and 9 EFA: 9 MS (CY, DK, EE, EL, LV, MT, PT, SV, UK)

Over 10 EFA: 14 MS (AT, BE, BG, HR, CZ, FR, DE, HU, IE, IT, LU, PL, RO, SK)

• Category of EFA type

Nitrogen fixing crops: 27 MS

Land lying fallow: 26 MS

Landscape features (at least one): 24 MS

Short rotation coppice: 20 MS

Catch crops: 19 MS

Buffer strips: 17 MS

Afforested areas: 14 MS

Agroforestry: 11 MS

Strips along forest edges with production: 7MS; without production: 9 MS

Terraces: 8 MS

(UK and BE sent notifications on regional basis; in this presentation UK/BE are counted if at least one region activated a given element)

Implementation issues identified by Member States

• How to apply new features like 'active farmer', Young Farmers payment, Small Farmers payment

• LPIS update/upgrade – need to distinguish between arable land / permanent crops / permanent grassland

• Requirement to establish an EFA layer in LPIS

• Greening: How to identify EFAs, period for crop diversification, rules for permanent grassland

Implementation issues identified by Member States

• On-the-spot controls: new sampling approach, "cascade", timing of controls (crop diversification and some EFAs)

• Setting up the geospatial aid application system (phasing-in)

• Application of reductions and penalties for animal schemes (Voluntary Coupled Support)

Implementation support from the Commission

Approach and instruments

• Issuing of guidelines and Q&A’ documents

• Visits to Member States and bilateral meetings

• Reply to written questions (mainly interpretations)

• Organisation of workshops

• Participation to Committees, events, Civil Dialogue Group meetings

• Cooperation with the Joint Research Center

Simplification framework

3 guiding principles

• Respect 2013 political decisions

• Concentrate on what benefits farmers and other beneficiaries

• Ensure sound financial management of CAP expenditure

Simplification – an ongoing process

1st wave – Spring 2015

• An extension of the 2015 deadline for direct payments applications

• Greater flexibility in the eligibility rules for Voluntary Coupled Support for animals

2nd wave – May/June 2015

• Concrete changes to the Guidelines on Direct Payments:

Simplified recording of certain EFAs (ELPG, hedges, wooded strips)

Allowing for substitution of EFAs during on-the-spot checks

No requirement to map all potential EFAs

Greater flexibility for adjacent EFAs

Simplification – an ongoing process

3rd wave – Autumn 2015 (amendment of secondary legislation)

• Preliminary checks of aid applications

• Possibility to reduce level of on-the-spot checks for 2016

• Increased efficiency of selection of control samples

• Possibility to modify declaration regarding use of parcels

• System of collective claims under 2nd pillar

• Voluntary coupled support: transfer of funds, modulation of unitary level of aid, streamlining of notifications

• Young farmers’ scheme (eligibility of legal bodies jointly controlled)

Simplification – an ongoing process

4th wave – January 2016 (amendment of secondary legislation)

More changes are in preparation on administrative penalties

• Simplified system of administrative penalties

• A “yellow card” system for first offenders

Future steps in 2016

• Greening review after the first year of implementation

• Continuation of assessment

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Concluding comments

• The assessment of the first results of implementation of the new direct payment system and the continuous process of simplification

should help supporting

• The necessary policy shift towards support for more competitive and sustainable agricultural models in the EU

• The enhancement of the performance of the new support system to the benefits of farmers, national administrations and ultimately EU citizens