The "Health Check" of the European Common Agricultural Policy

• On November 20, 2007, the European Commission launched the Communication for the 'Health Check' of the CAP.
• The purpose of this Health Check is to streamline, fine-tune and modernize the CAP, building on the 2003 reforms, and improving the way it works, making it fit for new challenges, and a EU with 27 member states.

The Communication focuses on three main questions:

• How to make the Single Payment Scheme more effective and simpler;
• How to make market support instruments relevant in a European Union of 27 member states; and
• How to confront new challenges like climate change, biofuels, water management and the protection of biodiversity.

The Commissioner Fisher Boel has invited stake-holders to a six-month long discussion on the proposals they have made. (More info on the stake holder consultation >>)

This spring the Commission will return with legislative proposals, and if they are adopted by the EU agriculture ministers by the end of 2008 they could come into effect immediately.

Making the Single Payment Scheme simpler and more efficient

• moving away from payments based on historical receipts towards a "flatter rate" system.
• increasing the rate of decoupling, but maybe keep the coupled support in areas with small-scale production with particular economic or environmental importance.
• gradually reducing the support level to big farmers, starting from a level of, for example, €100,000 per year. This would have to differentiate between multiple-owner farms with many workers and single-owner farms with just a few.
• increasing the amount of land required (currently 0.3 hectares) for a farmer to qualify for support.
• reviewing the Cross Compliance standards which farmers are obliged to respect to receive their support from Brussels. Revising the existing ones and add new ones if necessary (e.g. water management and climate change).

Adjusting market support instruments to make them relevant for an EU of 27 in 2007

• Let intervention revert to its original purpose as a safety net – now that the outlook for the market is optimistic?
• Should intervention for most cereals be set at zero while maintaining intervention for a single cereal (bread-making wheat)?
• Should set-aside be abolished, while finding new ways of preserving the environmental benefits it has brought?
• The milk quotas will be phased out in 2015. Should there be a gradual increase in quotas between now and then to allow a 'soft landing'? There would be a need to look at support for the less favoured regions of the EU.

Responding to new challenges

• These challenges consist of risk management, fighting climate change, water managment the bio-fuel issue and preserving biodiversity.
• The Commission proposes that the climate change and water management issues could be dealt with through the Cross Compliance. The proposal is to finance necessary measures through the Rural Development policy.
• The Commission proposes and increase of the 'modulation', rate, i.e. the reduction of direct payments to all farms receiving more than € 5,000 per year and the transfer of the money into the Rural Development budget, gradually increasing it from 5 percent now to 13 percent in 2013.
• Is the energy crop premium necessary, taking into account the new incentives for biofuel production such as the compulsory bioenergy targets and the high prices.